PDF document

- 1 -

                              Userid: CPM                       Schema:        Leadpct: 100%  Pt. size: 9.5      Draft         Ok to Print
                                                                instrx
AH XSL/XML                    Fileid: … orm-1042-s/2025/a/xml/cycle06/source                                    (Init. & Date) _______

Page 1 of 42                                                                                                    11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

2025

Instructions for Form 1042-S

Foreign Person's U.S. Source Income Subject to Withholding

Section references are to the Internal Revenue Code unless 
                                                                               Future Developments
otherwise noted.
                                                                               For the latest information about developments related to 
Contents                                                                  Page Form 1042-S and its instructions, such as legislation enacted 
General Instructions      . . . . . . . . . . . . . . . . . . . . . . . . . 2  after they were published, go to IRS.gov/Form1042S.
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2
Who Must File     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  What’s New
Where, When, and How To File              . . . . . . . . . . . . . . . . . 3  New box 7d.    A new checkbox has been added to indicate a 
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5  Form 1042-S is being filed to revise an amount subject to 
                                                                               withholding in a withholding rate pool to report to a specific 
Amounts Subject to Reporting on Form 1042-S . . . . . .                     9  recipient. See Box 7d, later, for more information.
Amounts That Are Not Subject to Reporting on 
Form 1042-S           . . . . . . . . . . . . . . . . . . . . . . . . . .   10 New chapter 3 status code 40.    A new chapter 3 status 
                                                                               code was added for any partnership that is, or has a branch 
Distributions Attributable to Dispositions of U.S. 
                                                                               that is, a qualified derivatives dealer (QDD) for use when 
Real Property Interests by Publicly Traded                                     reporting allocations to its partners with respect to QDD 
Trusts and Qualified Investment Entities                    . . . . . . .   11 items. All other allocations by the partnership to its partners 
Publicly Traded Partnerships (Sections 1446(a)                                 should be reported using status code 8, 9, or 38, as 
and (f) Withholding Tax)              . . . . . . . . . . . . . . . . . .   11 applicable. When the partnership is transacting in its 
Requirement To Withhold           . . . . . . . . . . . . . . . . . . . .   12 QDD capacity, it should use status code 35. In addition, 
Before Completing Form 1042-S               . . . . . . . . . . . . . . .   12 status code 40 should not be used for reporting payments to 
                                                                               a QDD.
Payments by U.S. Withholding Agents                 . . . . . . . . . . .   13
Amounts Paid by QIs       . . . . . . . . . . . . . . . . . . . . . . . .   18 New Chapter 3 status code 41.    A new chapter 3 status 
Amounts Paid by NQIs and Flow-Through Entities . . .                        21 code was added for a U.S. government entity or tax exempt 
                                                                               entity (other than a section 501(c) entity) such as a college or 
Multiple Withholding Agent Rule             . . . . . . . . . . . . . . .   22 university.
Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
Avoid Common Errors . . . . . . . . . . . . . . . . . . . . . . .           23 Note. This code is only applicable for providing the chapter 3 
Specific Instructions for Withholding Agents                . . . . . . .   24 status of the withholding agent on box 12b.
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . . .             24 New income codes 59, 60, and 61. New income codes 
Amended Checkbox . . . . . . . . . . . . . . . . . . . . . . . .            24 were added for consent fees, loan syndication fees, and 
                                                                               settlement payments. These income codes are optional for 
Amendment Number          . . . . . . . . . . . . . . . . . . . . . . . .   24 2025.
Box 1—Income Code           . . . . . . . . . . . . . . . . . . . . . . .   24
                                                                               New process for requesting extension of time to furnish 
Box 2—Gross Income . . . . . . . . . . . . . . . . . . . . . . .            25 recipient statements. The instructions have been updated 
Box 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26 to include a new process for requesting an extension of time 
Box 5—Withholding Allowance               . . . . . . . . . . . . . . . .   28 to furnish copies of Form 1042-S to recipients using Form 
Boxes 7a Through 11—Federal Tax Withheld                      . . . . . .   28 15397, Application for Extension of Time to Furnish Recipient 
Box 12a—Withholding Agent's EIN                 . . . . . . . . . . . . .   29 Statements.
Boxes 12d Through 12i—Withholding Agent's                                      Country codes. “US” is now a valid country code entry in 
Name, GIIN, Country Code, FTIN (if any), and                                   box 12f (withholding agent) or 13b (recipient).
Address         . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   29
                                                                               Note. Current instructions only require that a chapter 3 
Boxes 15a Through 15i—Intermediary/                                            exemption code be reported when there is no tax withheld 
Flow-Through Entity's Name, Status Code,                                       due to an exemption pursuant to the Code or an income tax 
Country Code, Address, EIN, GIIN, and FTIN                          . . .   33 treaty. The IRS intends to update the instructions for calendar 
Boxes 16a Through 16e—Payer's Name, TIN, GIIN,                                 year 2026 to require that a chapter 3 exemption code (or 
and Status Code           . . . . . . . . . . . . . . . . . . . . . . . .   33 code for a reduced withholding tax rate) be provided in all 
Boxes 17a Through 17c—State Income Tax                                         cases where the tax withheld is less than 30%.
Withheld and Related Information                    . . . . . . . . . . .   33
                                                                               Reminders
Amended Forms . . . . . . . . . . . . . . . . . . . . . . . . . . .         33
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Electronic filing. A withholding agent that is not a financial 
                                                                               institution is required to file Forms 1042-S electronically if it is 
                                                                               either required to file at least 10 information returns during 
                                                                               the year or is a partnership with more than 100 partners. See 
                                                                               Regulations section 301.6011-2.

                                              Instructions for Form 1042S (2025)  Catalog Number 64278A
Dec 4, 2024                             Department of the Treasury  Internal Revenue Service  www.irs.gov

- 2 -

Enlarge image

Page 2 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Reliance on proposed regulations reducing burden un- that the chapter 3 status (or classification) and, when the
der FATCA and chapter 3. On December 18, 2018, the IRS payment reported is a withholdable payment, the chapter 4
and the Department of the Treasury issued proposed status, be reported on the form according to the codes
regulations (REG-132881-17) to reduce taxpayer burden with provided in these instructions. For the requirement of a
respect to certain requirements under chapters 3 and 4. The withholding agent to file a Form 1042-S for chapter 4
proposed regulations provide that, under section 7805(b)(1) purposes, see Regulations section 1.1474-1(d).
(C), taxpayers may generally rely on the proposed Filing Information Returns Electronically (FIRE) System.
regulations until final regulations are issued. Specifically, for For files submitted on the FIRE System, it is the responsibility
purposes of these instructions, a withholding agent may rely of the filer to check the status within 5 business days to verify
on the following provisions in connection with completing the results of the transmission. The IRS will not mail error
Form 1042-S. reports for files that are bad. See Pub. 1187, Specifications
• Withholding and reporting in a subsequent year. A for Electronic Filing of Form 1042-S, Foreign Person’s U.S.
partnership or trust that is permitted to withhold in a Source Income Subject to Withholding.
subsequent year with respect to a foreign partner's or
beneficiary's share of income for the prior year may Unique form identifier. Withholding agents must assign a
designate the deposit of the withholding as attributable to the unique identifying number to each Form 1042-S they file. This
preceding year and in some cases a partnership is provided identifying number is used, for example, to identify which
an extended due date for filing and furnishing Form 1042-S. information return is being corrected or amended when
See the instructions for box 7c, later. multiple information returns are filed by a withholding agent
• Adjustments to overwithholding under the with respect to the same recipient. The unique identifying
reimbursement and set-off procedures. A withholding number cannot be the recipient's U.S. taxpayer identification
agent may make adjustments to overwithholding using either number (TIN) or foreign tax identification number (FTIN). The
the reimbursement or set-off procedures until the extended unique identifying number must be numeric. The length of a
due date for filing Form 1042-S (unless the Form 1042-S has given identifying number must be exactly 10 digits. The
already been filed or furnished). Additionally, a withholding identifying number must be unique to each original Form
agent may use the extended due date for filing a Form 1042 1042-S filed for the current year. The identifying number can
to claim a credit for any adjustments made to be used on a new original form in a subsequent year.
overwithholding. See the instructions for box 9, later. List of country codes. Form 1042-S filers must use the
Withholding rates. The rate of withholding under section same list of country codes used on other IRS forms (for
1446(a) by a publicly traded partnership (PTP) on a example, Forms 926, 1118, 3520, and 8805). This list of
distribution of income effectively connected to a U.S. trade or country codes may be found at IRS.gov/CountryCodes.
business is 21% for corporate partners and 37% for all other
partners. General Instructions
The rate of withholding by a qualified investment entity
(QIE) on a distribution to a nonresident alien or foreign Purpose of Form
corporation that is treated as gain from the sale or exchange Use Form 1042-S to report income described under Amounts
of a U.S. real property interest by the shareholder is 21%. Subject to Reporting on Form 1042-S, later, and to report
Qualified derivatives dealers (QDDs). These instructions amounts withheld under chapter 3 or chapter 4.
provide guidance on how to report payments on Form 1042-S Use Form 1042-S to report specified federal procurement
that are made to and by QDDs. See Payments by U.S. payments paid to foreign persons that are subject to
Withholding Agents and Amounts Paid by QIs, later. For more withholding under section 5000C.
information on the withholding and reporting requirements
associated with payments made to and by QDDs, see Rev. Use Form 1042-S to report payments of eligible deferred
Proc. 2022-43, 2022-52 I.R.B. 570, available at IRS.gov/irb/ compensation items or distributions from nongrantor trusts to
2022-52_IRB#RP-2022-43 . See also Notice 2024-44, covered expatriates that are subject to withholding under
2024-25 I.R.B. 1737, available at IRS.gov/irb/ section 877A. See Box 1—Income Code, later.
2024-25_IRB#NOT-2024-44, which extends the phase-in
Use Form 1042-S to report certain distributions that are
period provided in Notice 2022-37, 2022-37 I.R.B. 234,
made by publicly traded trusts and QIEs (as defined under
available at IRS.gov/irb/2022-37_IRB#NOT-2022-37, for
section 897(h)(4)(A)). See Distributions Attributable to
certain provisions of the section 871(m) regulations for 2
Dispositions of U.S. Real Property Interests by Publicly
years (including 2025), including for certain requirements of a
Traded Trusts and Qualified Investment Entities, later.
QDD.
Foreign Account Tax Compliance Act (FATCA). Form Use Form 1042-S to report distributions of effectively
1042-S reports payments and amounts withheld under the connected income (ECI) by a PTP or nominee and amounts
provisions commonly known as FATCA or chapter 4 of the realized paid on certain transfers of PTP interests. See
Internal Revenue Code (chapter 4) in addition to those Publicly Traded Partnerships (Section 1446(a) and (f)
amounts required to be reported under chapter 3 of the Withholding Tax), later.
Internal Revenue Code (chapter 3). Form 1042-S requires Every person required to deduct and withhold any tax
the reporting of an applicable exemption to the extent ! under chapter 3 or chapter 4 is liable for such tax.
withholding under chapter 4 did not apply to a payment of CAUTION
U.S. source fixed or determinable annual or periodical
(FDAP) income (including deposit interest) that is reportable Do not use Form 1042-S to report an item required to be
on Form 1042-S. For payments to intermediaries, reported on any of the following forms.
flow-through entities, and recipients, Form 1042-S requires • Form W-2 (wages and other compensation made to
employees (other than compensation for dependent personal

2 Instructions for Form 1042-S (2025)

- 3 -

Enlarge image

Page 3 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

services for which the beneficial owner is claiming treaty income by March 15 of the following calendar year. If the 15th
benefits), including wages in the form of group-term life falls on a Saturday, Sunday, or legal holiday in the District of
insurance). Columbia or where the return is to be filed, the due date is the
• Form 1099 (except if indicated otherwise in these next business day.
instructions). Copy A is filed with the IRS. Send all paper Forms 1042-S
• Form 8288-A, Statement of Withholding on Certain with Form 1042-T, Annual Summary and Transmittal of Forms
Dispositions by Foreign Persons; or Form 8805, Foreign 1042-S, to the address in the Form 1042-T instructions. You
Partner's Information Statement of Section 1446 Withholding must use Form 1042-T to transmit paper Forms 1042-S. Use
Tax. Withholding agents otherwise required to report a a separate Form 1042-T to transmit each type of Form
distribution partly on a Form 8288-A or Form 8805 and partly 1042-S. See Payments by U.S. Withholding Agents, later,
on a Form 1042-S may instead report the entire amount on and the Form 1042-T instructions for more information.
Form 8288-A or Form 8805.
• Form 8966, FATCA Report. Foreign financial institutions Electronic filing requirement. See Electronic Reporting,
(FFIs), sponsoring entities of certain FFIs and other foreign later, for information on who is required to file Form 1042-S
entities, and withholding agents are required to report on electronically.
Form 8966 certain account holders and payees. An FFI or Attach only Copy A to Form 1042-T. Provide Copies
withholding agent may also be required to file Form 1042-S to TIP B, C, and D to the recipient of the income. All copies
report payments of U.S. source FDAP income made to such must match the copy filed with the IRS. Any
persons and to report tax deducted and withheld, if any. differences between the copy of the form issued to recipients
and the copy filed with the IRS will lead to delays in
Who Must File
processing the recipient's tax return. The IRS may disallow
Every withholding agent (defined in Definitions, later) must claims for refund or credit for amounts withheld reported on
file an information return on Form 1042-S to report amounts Form 1042-S if the form attached to such claims differs from
paid during the preceding calendar year that are described the copy that was filed with the IRS.
under Amounts Subject to Reporting on Form 1042-S, later.
However, withholding agents who are individuals are not With respect to a withholdable payment, the recipient copy
required to report a payment on Form 1042-S if they are not should be provided to the intermediary or flow-through entity
making the payment as part of their trade or business and no named as a recipient with respect to a chapter 4 reporting
withholding is required to be made on the payment. For pool, if applicable.
example, an individual making a payment of interest that
qualifies for the portfolio interest exception from withholding Extension of time to file. To request an extension of time to
is not required to report the payment if the portfolio interest is file Forms 1042-S, file Form 8809, Application for Extension
paid on a loan that is not connected to the individual's trade of Time To File Information Returns. See the instructions for
or business. However, an individual who is a withholding Form 8809 at IRS.gov/Form8809 for where to file that form.
agent paying an amount that actually has been subject to You should request an extension as soon as you are aware
withholding is required to report the payment. Also, an that an extension is necessary, but no later than the due date
individual paying an amount on which withholding is required for filing Form 1042-S. By filing Form 8809, you will get an
must report the payment, whether or not the individual automatic 30-day extension to file Form 1042-S. If you need
actually withholds. See Multiple Withholding Agent Rule, more time, you may submit a second Form 8809 before the
later, for exceptions to reporting when another person has end of the initial extended due date. See Form 8809 for more
reported the same payment to the recipient. Note that there information.
may be a payment for tax purposes, even if there is no net Recipient copies. You may request a one-time 30-day
payment. For example, see Regulations section 1.871-15(i) extension to furnish copies of Forms 1042-S to the recipients
for when there is a dividend equivalent. using Form 15397, Application for Extension of Time to
Furnish Recipient Statements. This form must be sent by fax
You must file a Form 1042-S even if you did not withhold to:
tax under chapter 3 because the income was exempt from
tax under a U.S. tax treaty or the Internal Revenue Code, Internal Revenue Service
including the exemption for income that is effectively Technical Services Operation
connected with the conduct of a trade or business in the Attn: Extension of Time Coordinator
United States, or you released the tax withheld to the Fax: 877-477-0572
recipient. For exceptions, see Amounts That Are Not Subject (International 304-579-4105)
to Reporting on Form 1042-S, later.
Amounts paid to an individual that is a bona fide resident Your request must be received no later than the date the
of a U.S. territory are not subject to reporting on Form 1042-S Forms 1042-S must be furnished to the recipients. If your
if the beneficial owner of the income is a U.S. citizen, request for an extension is approved, generally you will be
national, or resident alien (such amounts may be subject to granted a maximum of 30 extra days to furnish the recipient
Form 1099 reporting). copies. See Extension to provide statements to recipients in
Pub. 515, Withholding of Tax on Nonresident Aliens and
If you file Form 1042-S, you must also file Form 1042, Foreign Entities.
! Annual Withholding Tax Return for U.S. Source
CAUTION Income of Foreign Persons. See Form 1042 and its See Pub. 1187 for more information about filing
instructions for more information. ! extension requests electronically instead of on a
CAUTION paper Form 8809.
Where, When, and How To File
Forms 1042-S, whether filed on paper or electronically, must Electronic Reporting
be filed with the IRS and be furnished to the recipient of the Forms 1042-S must be filed electronically if:

Instructions for Form 1042-S (2025) 3

- 4 -

Enlarge image

Page 4 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• You are a person (including a corporation, partnership, IRS.gov/Forms. Otherwise, you can go to IRS.gov/
individual, trust, or estate) that is required to file 10 or more OrderForms to place an order and have forms mailed to you.
information returns during the year or you are a partnership You should receive your order within 10 business days.
with more than 100 partners, or
• You are a financial institution (whether U.S. or foreign) Record Retention
regardless of the number of returns required to be filed. Withholding agents should retain a copy of the information
Electronic submissions are filed using the FIRE System. returns filed with the IRS, or have the ability to reconstruct the
The FIRE System operates 24 hours a day, 7 days a week, at data, for at least 3 years after the reporting due date.
FIRE.irs.gov. For more information, see Pub. 1187.
Substitute Forms
A withholding agent required to file its original Form The official Form 1042-S is the standard for substitute forms.
1042-S returns electronically under the above requirements All substitute forms must comply with the rules set forth in
must also file any amended Form 1042-S returns Pub. 1179, General Rules and Specifications for Substitute
electronically during the calendar year. Forms 1096, 1098, 1099, 5498, and Certain Other
If you file electronically, do not file the same returns Information Returns. A substitute of Form 1042-S that is
furnished to the recipient (Copy B, C, or D) must conform in
! on paper. Duplicate filing may cause penalty notices format and size to the official IRS form and must contain the
CAUTION to be generated.
exact same information as the copy filed with the IRS.
However, the size of the form may be adjusted if the
Note. Regardless of the above requirements, the IRS substitute form is presented on a landscape-oriented page
encourages filers to transmit forms electronically. instead of portrait. Only one Form 1042-S may be submitted
Hardship waiver. To receive a hardship waiver from filing per page, regardless of orientation. You may be subject to a
Forms 1042-S electronically, submit Form 8508, Application penalty for failure to furnish a correct information return. See
for a Waiver from Electronic Filing of Information Returns. Penalties, later.
Waiver requests should be filed at least 45 days before the
due date of the returns. See Form 8508 for more information. Note. A withholding agent is required to provide a recipient
with a separate substitute Form 1042-S for each type of
Truncation of TIN Rules payment of income (as determined by the income code in
Withholding agents may truncate the recipient's TIN (social box 1).
security number (SSN), individual taxpayer identification All of the fields on the substitute form must match the
number (ITIN), or employer identification number (EIN)) on ! copy filed with the IRS and must comply with IRS
the recipient's copy of Form 1042-S (that is, Copies B, C, and CAUTION standards (see Pub. 1179). Any differences between
D), including a substitute form. To truncate the recipient's the substitute form issued to recipients and the copy filed with
TIN, only the last four digits of a TIN must be displayed and the IRS will lead to delays in processing the recipient's tax
the remaining digits must be replaced with either asterisks (*) return. The IRS may disallow claims for refund or credit for
or Xs. For example, an SSN or ITIN must be truncated on the amounts withheld reported on Form 1042-S if the substitute
recipient's copy as XXX-XX-nnnn. An EIN must be truncated form attached to such claims differs from the copy that was
as XX-XXXnnnn. filed with the IRS.
Withholding agents may also truncate a recipient’s foreign Penalty for filing incorrect substitute form. Privately
tax identification number (FTIN) on the recipient’s copy of printed substitute Forms 1042-S must be exact copies of
Form 1042-S (Copies B, C, and D), including a substitute both the format and content of the official Form 1042-S. If you
form. The same rules for truncating a recipient’s U.S. TIN file a substitute for Form 1042-S, Copy A, with the IRS that is
stated above must be followed if truncating a recipient’s not an exact copy of the official Form 1042-S, Copy A, you
FTIN. may be subject to a penalty for failure to file a correct
information return. See Penalties, later.
Note. The recipient's TIN and FTIN must not be truncated on
Copy A filed with the IRS. The withholding agent's EIN Account-by-Account Reporting by Certain
cannot be truncated on any copy. Financial Institutions
Need assistance? For additional information and A U.S. financial institution or U.S. branch of an FFI
instructions on filing Forms 1042-S electronically, extensions maintaining an account within the United States is required to
of time to file (Form 8809), and hardship waivers (Form report payments of the same type of income (as determined
8508), see Pub. 1187. You also can call the Technical by the income code in box 1) made to multiple financial
Services Operation (TSO) at 866-455-7438 (toll free) or accounts held by the same recipient on a separate Form
304-263-8700 (not a toll-free number). Do not call the TSO 1042-S for each account. For this purpose, a financial
for tax law questions. The TSO can also be reached by fax at account is an account described in Regulations section
877-477-0572 (toll free) and international fax at 1.1471-5(b)(1). See Box 13k—Recipient’s Account Number,
304-579-4105 (not a toll-free number). later, for information on designating each account with a
If you have tax law questions pertaining to Form 1042-S, separate account number.
call 267-941-1000 (not a toll-free number).
Combined Reporting Procedures
Additional Information Rev. Proc. 99-50 provides special procedures for successor
For more information on the withholding of tax, see Pub. 515. entities to use combined information reporting under
To order this publication and other publications and forms, chapter 3 in certain situations following a merger or
call 800-TAX-FORM (800-829-3676). You can download or acquisition. A withholding agent may also use these
print some of the forms and publications you may need at procedures for purposes of reporting under chapter 4.

4 Instructions for Form 1042-S (2025)

- 5 -

Enlarge image

Page 5 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Deposit Requirements Authorized agent. An agent is an authorized agent for
For information and rules concerning federal tax deposits, purposes of filing Form 1042 or making tax deposits and
see Depositing Withheld Taxes in Pub. 515 or Deposit payments on behalf of its principal (payer) only if all five of the
Requirements in the Instructions for Form 1042. following conditions apply.
1. There is a written agreement between the payer and
Definitions the person acting as agent.
Withholding agent. A withholding agent is any person, U.S. 2. A Form 8655, Reporting Agent Authorization, is filed
or foreign, that has control, receipt, or custody of an amount with the IRS if the agent is filing Form 1042 (in its own name)
subject to withholding under chapter 3 who can disburse or on behalf of the payer.
make payments of an amount subject to withholding, or who 3. The books and records and relevant personnel of the
makes a withholdable payment under chapter 4. The agent are available to the payer.
withholding agent may be an individual, a corporation, a
partnership, a trust, an association, or any other entity. The 4. The payer remains fully liable for the acts of its agent
term “withholding agent” also includes, but is not limited to, a and does not assert any of the defenses that may otherwise
qualified intermediary (QI), a nonqualified intermediary (NQI), be available.
a withholding foreign partnership (WP), a withholding foreign 5. If the agent is filing Form 1042 (in its own name) on
trust (WT), a flow-through entity, a U.S. branch that is treated behalf of the payer, the agent is reported as the withholding
as a U.S. person under Regulations section 1.1441-1(b)(2) agent in boxes 12a through 12i and information about the
(iv)(A), a territory FI, a nominee under section 1446, and an payer is reported in boxes 16a through 16e of the Form
authorized agent. A person may be a withholding agent even 1042-S.
if there is no requirement to withhold from a payment or if A sponsoring entity is a reporting agent with respect to
another person has already withheld the required amount withholdable payments and must fulfill the above conditions
from a payment. to be an authorized agent.
In most cases, the U.S. person who pays (or causes to be For more information on these conditions, see Regulations
paid) the item of U.S. source income to a foreign person (or sections 1.1441-7(c) and 1.1474-1(a)(3)(ii).
to its agent) must withhold. However, other persons may be
required to withhold. For example, if a payment is made by a Beneficial owner. For payments other than those for which
QI (whether or not it assumes primary withholding a reduced rate of withholding is claimed under an income tax
responsibility) and the QI knows that withholding was not treaty, the beneficial owner of income in most cases is the
done by the person from which it received the payment, then person who is required under U.S. tax principles to include
that QI is required to do the appropriate withholding. In the income in gross income on a tax return. A person is not a
addition, withholding must be done by any QI that assumes beneficial owner of income, however, to the extent that
primary withholding responsibility under chapters 3 and 4, a person is receiving the income as a nominee, agent, or
WP, a WT, a U.S. branch that agrees to be treated as a U.S. custodian, or to the extent the person is a conduit whose
person under Regulations section 1.1441-1(b)(2)(iv)(A), or participation in a transaction is disregarded. In the case of
an authorized agent. Finally, if a payment is made by an NQI amounts paid that do not constitute income, beneficial
or a flow-through entity that knows, or has reason to know, ownership is determined as if the payment were income.
that withholding was not done, that NQI or flow-through entity Foreign partnerships, foreign simple trusts, and foreign
is required to withhold because it also falls within the grantor trusts are not the beneficial owners of income paid to
definition of a withholding agent. the partnership or trust for chapter 3 purposes. The beneficial
Account holder. Generally, the account holder is the person owners of income paid to a foreign partnership in most cases
that holds the account. See Regulations section 1.1471-5(a). are the partners in the partnership, provided that the partner
is not itself a partnership, foreign simple or grantor trust,
Amount realized. An amount realized on the transfer of a nominee, or other agent. The beneficial owner of income paid
PTP interest is the amount of gross proceeds (as defined in to a foreign simple trust (a foreign trust that is described in
Regulations section 1.6045-1(d)(5)) paid or credited to a section 651(a)) in most cases is the beneficiary of the trust, if
partner or broker (as applicable) that is a transferor of the the beneficiary is not a foreign partnership, foreign simple or
interest. The amount realized on a PTP distribution is the grantor trust, nominee, or other agent. The beneficial owner
amount of the distribution reduced by the portion of the of a foreign grantor trust (a foreign trust to the extent that all
distribution that is attributable to the cumulative net income of or a part of the income of the trust is treated as owned by the
the partnership (as determined under Regulations section grantor or another person under sections 671 through 679) is
1.1446(f)-4(c)(2)(iii)). the person treated as the owner of the trust. The beneficial
Amount subject to chapter 3 withholding. Generally, an owner of income paid to a foreign complex trust (a foreign
amount subject to chapter 3 withholding is an amount from trust that is not a foreign simple trust or foreign grantor trust)
sources within the United States that is FDAP income. FDAP is the trust itself.
income is all income included in gross income, including The beneficial owner of income paid to a foreign estate is
interest (as well as original issue discount (OID)), dividends, the estate itself.
rents, royalties, and compensation. Amounts subject to A payment to a U.S. partnership, trust, or estate is not
chapter 3 withholding do not include amounts that are not subject to withholding under chapter 3 or 4. A U.S.
FDAP, such as most gains from the sale of property (including partnership, trust, or estate should provide the withholding
market discount and option premiums), as well as other agent with a Form W-9, Request for Taxpayer Identification
specific items of income (such as interest on bank deposits Number and Certification. In most cases, these beneficial
and short-term OID). See Regulations section 1.1441-2. owner rules apply for purposes of section 1446; however,
there are exceptions.

Instructions for Form 1042-S (2025) 5

- 6 -

Enlarge image

Page 6 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

1. Chapter 3 withholding rate pool. A payment of a single Exempt recipient. An exempt recipient is any payee that is
type of income, determined in accordance with the income exempt from the Form 1099 reporting requirements.
codes used to file Form 1042-S, that is subject to a single
rate of withholding and a single chapter 4 exemption code. Exempt recipients are not exempt from withholding
under chapter 3 unless they are U.S. persons or
2. Chapter 4 withholding rate pool. A pool of account CAUTION!
foreign persons entitled to an exemption from
holders or payees provided on an FFI withholding statement
withholding under chapter 3.
(or a chapter 4 withholding statement) that is described in
Regulations section 1.1471-1(b)(20). Expatriate. A person is considered an expatriate if they
Broker. A broker is a person described in Regulations relinquish U.S. citizenship or, in the case of a long-term
section 1.1446(f)-1(b)(1) when referenced in connection with resident of the United States, cease to be a lawful permanent
a transfer of a PTP interest. resident as defined in section 7701(b)(6).
Chapter 3. Chapter 3 (Withholding of Tax on Nonresident Fiscally transparent entity. An entity is treated as fiscally
Aliens and Foreign Corporations), excluding sections 1445 transparent with respect to an item of income for which treaty
and 1446. benefits are claimed to the extent that the interest holders in
the entity must, on a current basis, take into account
Disregarded entity. A business entity that has a single separately their shares of an item of income paid to the entity,
owner and is not a corporation under Regulations section whether or not distributed, and must determine the character
301.7701-2(b) is disregarded as an entity separate from its of the items of income as if they were realized directly from
owner. the sources from which realized by the entity. For example,
Disclosing QI. For purposes of section 1446(a) or (f), a QI partnerships, common trust funds, and simple trusts or
that provides with its withholding statement the specific grantor trusts in most cases are considered to be fiscally
payee documentation referenced in Regulations section transparent with respect to items of income received by them.
1.1446(f)-4(a)(7)(iii) (for an amount realized) or Regulations Flow-through entity. For chapter 3 purposes, a
section 1.1446-4(e)(4) (for withholding on a PTP distribution flow-through entity is a foreign partnership (other than a WP),
under section 1446(a)) instead of the chapter 3 withholding a foreign simple or grantor trust (other than a WT), or, for any
rate pool information otherwise permitted to be included on payments for which a reduced rate of withholding under an
the withholding statement. A QI that acts as a disclosing QI income tax treaty is claimed, any entity to the extent the entity
for a payment must act as a disclosing QI for the entire is considered to be fiscally transparent under section 894
payment. See the 2023 QI agreement in Rev. Proc. 2022-43 with respect to the payment by an interest holder's
for further information. jurisdiction.
Dividend equivalent. To the extent specified in section Financial institution. A financial institution generally means
871(m) and the regulations thereunder, a dividend equivalent an entity that is a depository institution, a custodial institution,
is a payment (within the meaning of Regulations section an investment entity, or an insurance company (or holding
1.871-15(i)) that, directly or indirectly, is contingent on, or company of an insurance company) that issues cash value
determined by reference to, the payment of a dividend from insurance or annuity contracts. See Regulations section
U.S. sources, including pursuant to a securities lending, 1.1471-5(e).
sale-repurchase transaction, a specified notional principal
contract, or a specified equity-linked instrument. Foreign financial institution (FFI). An FFI is an entity
described in Regulations section 1.1471-5(d) or an entity
Certain other payments made by the withholding agent to treated as a financial institution under an Intergovernmental
satisfy a tax liability with respect to a dividend equivalent by Agreement (IGA).
the party receiving the dividend equivalent are dividend Deemed-compliant FFI. Under section 1471(b)(2),
equivalents. See Regulations section 1.871-15(c) for certain FFIs are deemed to comply with the regulations under
additional information, including the definitions of specified chapter 4 without the need to enter into an FFI agreement
notional principal contract and specified equity-linked with the IRS. However, certain deemed-compliant FFIs are
instrument. required to register with the IRS and obtain a global
Any section 871(m) amount of a QDD is treated as a intermediary identification number (GIIN). These FFIs are
dividend equivalent. See Rev. Proc. 2022-43 for additional referred to as “registered deemed-compliant FFIs.” See
information, including the definition of a section 871(m) Regulations section 1.1471-5(f)(1). Registered
amount. deemed-compliant FFIs also include certain FFIs that satisfy
Exempt beneficial owner. An exempt beneficial owner the requirements of an applicable IGA.
means a person that is described in Regulations section Nonparticipating FFI. A nonparticipating FFI is an FFI
1.1471-6 and includes a foreign government, a political that is not a participating FFI, deemed-compliant FFI, or
subdivision of a foreign government, a wholly owned exempt beneficial owner.
instrumentality or agency of a foreign government or Participating FFI. A participating FFI is an FFI that has
governments, an international organization, a wholly owned agreed to comply with the terms of an FFI agreement with
agency or instrumentality of an international organization, a respect to all branches of the FFI, other than a branch that is
foreign central bank of issue, a government of a U.S. territory, a reporting Model 1 FFI or a U.S. branch. The term
certain retirement funds, and certain entities wholly owned by “participating FFI” also includes a reporting Model 2 FFI and
one or more exempt beneficial owners. In addition, an exempt a QI branch of a U.S. financial institution, unless such branch
beneficial owner includes any person treated as an exempt is a reporting Model 1 FFI.
beneficial owner under an applicable Model 1 IGA or Model 2 Foreign person. A foreign person includes a nonresident
IGA. alien individual, a foreign corporation, a foreign partnership, a
foreign trust, a foreign estate, and any other person that is not

6 Instructions for Form 1042-S (2025)

- 7 -

Enlarge image

Page 7 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

a U.S. person. The term also includes a foreign branch or individual’s U.S. tax liability, or an alien individual who is a
office of a U.S. financial institution or U.S. clearing bona fide resident of Puerto Rico, Guam, the Commonwealth
organization if the foreign branch is a QI. A payment to a U.S. of the Northern Mariana Islands, the U.S. Virgin Islands, or
branch of a foreign person is treated as a payment to a American Samoa is a nonresident alien individual. An
foreign person for purposes of Form 1042-S. individual will not be treated as a U.S. person for a tax year or
any portion of a tax year that the individual is a dual-resident
Global intermediary identification number (GIIN). The
taxpayer who is treated as a nonresident alien for purposes
GIIN is the identification number that is assigned to a
of figuring their U.S. tax liability. See Pub. 519, U.S. Tax
participating FFI (including a reporting Model 2 FFI), a
Guide for Aliens, for more information on resident and
registered deemed-compliant FFI (including a reporting
nonresident alien status.
Model 1 FFI), or another entity for chapter 4 reporting
purposes. Even though a nonresident alien individual married to
a U.S. citizen or resident alien may choose to be
Intermediary. An intermediary is a person that acts as a CAUTION!
treated as a resident alien for certain purposes (for
custodian, broker, or nominee, or otherwise as an agent for
example, filing a joint income tax return), such individual is
another person, regardless of whether that other person is
still treated as a nonresident alien for withholding tax
the beneficial owner of the amount paid, a flow-through entity,
purposes.
or another intermediary.
Qualified intermediary (QI). A QI is an intermediary or Payee. Except as otherwise provided, the payee is the
eligible entity that is a party to a withholding agreement with person to whom a payment is made, regardless of whether
the IRS. A QI that is a financial institution must have a such person is the beneficial owner of the amount or treated
chapter 4 status described in Regulations section as the recipient of the payment for purposes of reporting on
1.1441-1(e)(5)(ii). An entity must indicate its status as a QI on Form 1042-S. See Regulations section 1.1471-3(a).
a Form W-8IMY submitted to a withholding agent.
A branch of a financial institution may not act as a QI in a Presumption rules. For withholdable payments and for
country that does not have approved know-your-customer amounts subject to withholding under chapter 3, the
(KYC) rules. Countries having approved KYC rules are listed presumption rules are those rules that a withholding agent
at IRS.gov/Businesses/International-Businesses/List-of- must follow to determine the status of a beneficial owner or
Approved-KYC-Rules. Branches that operate in non-KYC payee (for example, as a U.S. person or a foreign person)
approved jurisdictions as intermediaries are required to act when it cannot reliably associate a payment with valid
as NQIs. See the Instructions for Form W-8IMY for more documentation. See, for example, Regulations sections
information. 1.1441-1(b)(3), 1.1441-4(a), 1.1441-5(d) and (e),
1.1441-9(b)(3), 1.1446-1(c)(3), and 1.6049-5(d). Also see
Nonqualified intermediary (NQI). An NQI is any Pub. 515. See Regulations section 1.1446(f)-4(a)(2) and (b)
intermediary that is not a U.S. person and that is not a QI. (2) for a broker's requirement to treat a transferor of a PTP
Private arrangement intermediary (PAI). A QI that is an interest (or broker acting for the transferor) as a foreign
FFI may enter into a contractual agreement with another person for section 1446(f) purposes absent the broker's
intermediary under which the other intermediary generally receipt of a certification of non-foreign status. For a
agrees to perform all of the obligations of the QI with respect withholdable payment (defined in Regulations section
to the accounts maintained directly by the other intermediary. 1.1473-1(a)), the withholding agent must also follow the
See the QI agreement for the requirements of a PAI and a presumption rules under Regulations sections 1.1471-3(f)
QI's agreement with a PAI. and, for an FFI, 1.1471-4(c)(4)(i) to determine the chapter 4
Nonfinancial foreign entity (NFFE). An NFFE is a foreign status of the payee when it cannot reliably associate a
entity or an entity incorporated or organized under the laws of payment with valid documentation.
any U.S. territory that is not a financial institution. Publicly traded partnership (PTP). A PTP is an entity that
Excepted NFFE. The term “excepted NFFE” means an has the same meaning as in section 7704 and Regulations
NFFE that is described in Regulations section 1.1472-1(c)(1) sections 1.7704-1 through 1.7704-4 but does not include a
and generally includes a publicly traded corporation, certain PTP treated as a corporation under that section.
affiliated entities related to a publicly traded corporation,
certain territory entities, active NFFEs, and entities excluded PTP distribution. A PTP distribution is a distribution made
from the definition of FFI (excluded FFIs) described in by a PTP.
Regulations section 1.1471-5(e)(5). PTP interest. A PTP interest is an interest in a PTP if the
Nominee. See Regulations section 1.1446-4(b)(3) and interest is publicly traded on an established securities market
Publicly Traded Partnerships (Sections 1446(a) and (f) or is readily tradable on a secondary market (or the
Withholding Tax), later, for persons that may act as a substantial equivalent thereof).
nominee for a PTP distribution. Qualified derivatives dealer (QDD). A QDD is a QI that is
Nonexempt recipient. A nonexempt recipient is any person an eligible entity that agrees to meet the requirements of
who is not an exempt recipient under chapter 61. Regulations section 1.1441-1(e)(6)(i) and the QI agreement.
An eligible entity is defined in Regulations section
Nonresident alien individual. Any individual who is not a 1.1441-1(e)(6)(ii).
citizen or resident of the United States is a nonresident alien
individual. An alien individual meeting either the green card To act as a QDD, the home office or branch, as applicable,
test or the substantial presence test for the calendar year is a must qualify and be approved for QDD status and must
resident alien. Any person not meeting either test is a represent itself as a QDD on its Form W-8IMY and separately
nonresident alien individual. Additionally, an alien individual identify the home office or branch as the recipient on a
who is treated as a nonresident alien pursuant to Regulations withholding statement (if required). Each home office or
section 301.7701(b)-(7) for purposes of figuring out the branch that obtains QDD status is treated as a separate

Instructions for Form 1042-S (2025) 7

- 8 -

Enlarge image

Page 8 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

QDD. See Regulations section 1.1441-1(e)(6) and Rev. Proc. • A QI (other than a disclosing QI).
2022-43 for more information. • A WP or WT.
Qualified securities lender (QSL). A QSL is an FFI that • A PAI.
satisfies all of the following. • A participating FFI or a registered deemed-compliant FFI
that is an NQI, an NWP, or a nonwithholding foreign trust
• It is a bank, custodian, broker-dealer, or clearing
(NWT) and provides chapter 4 withholding rate pool
organization that is regulated by the government in its home
information to the extent permissible.
jurisdiction and that regularly borrows and lends the
securities of U.S. corporations to unrelated customers. • A participating FFI or deemed-compliant FFI that is the
beneficial owner, including a nonreporting FFI under a Model
• It is subject to audit by the IRS under section 7602 or by an
1 or Model 2 IGA.
external auditor if it is a QI.
• It provides to the withholding agent an annual certification • A U.S. branch or territory FI treated as a U.S. person under
Regulations section 1.1441-1(b)(2)(iv)(A).
of its QSL status.
• It meets the requirements to qualify as a QSL provided in • An NFFE that is not a flow-through entity or acting as an
intermediary.
Notice 2010-46 for the transition period. See Notice 2010-46
at IRS.gov/irb/2010-24_IRB#NOT-2010-46. While Notice • A foreign partnership or a foreign trust (other than a WP or
WT), but only to the extent the income is effectively
2010-46 was obsoleted, Notice 2024–44 permits withholding
connected with its conduct of a trade or business in the
agents to apply the QSL transition rules described in Parts III.
United States.
C-E of Notice 2010-46 for payments made in 2025 and 2026.
• A partner or beneficiary of a flow-through entity that is an
Recalcitrant account holder. Generally, a recalcitrant NFFE (other than a WP or WT).
account holder is an account holder of a participating or • A nonparticipating FFI that is a beneficial owner.
registered deemed-compliant FFI that failed to provide the • An exempt beneficial owner that is not a flow-through entity
documentation required under chapter 4 to determine the or acting as an intermediary.
account holder's status or to report the account as a U.S.
In the case of a PTP distribution subject to
account. See Regulations section 1.1471-5(g).
withholding under section 1446(a), if another
Recipient. For chapter 3 purposes (including sections 1445 CAUTION! partnership or a trust (other than a grantor trust)
and 1446), a recipient includes any of the following. receives the distribution, the partnership or trust is the
• A beneficial owner of income. recipient for chapter 3 purposes.
• A QI other than a disclosing QI.
• A WP or WT. For chapter 4 purposes, a recipient is generally the same
• A U.S. branch that is treated as a U.S. person under person that is a recipient for chapter 3 purposes.
Regulations section 1.1441-1(b)(2)(iv)(A) or for section 1446 Specified notional principal contract (SNPC). An SNPC
purposes. is any specified notional principal contract within the meaning
• A foreign partnership or a foreign trust (other than a WP or of Regulations section 1.871-15(d).
WT), but only to the extent the income is effectively
connected with its conduct of a trade or business in the Specified U.S. person. A specified U.S. person is any U.S.
United States (except as indicated below for a grantor trust). person other than a person identified in Regulations section
• A payee who is not known to be the beneficial owner, but 1.1473-1(c).
who is presumed to be a foreign person under the Substantial U.S. owner. A substantial U.S. owner is a
presumption rules. specified U.S. person described in Regulations section
• A PAI. 1.1473-1(b). For purposes of filing this form, a reporting
• A partner receiving a distribution of ECI from a PTP or Model 2 FFI reporting an account held by a passive NFFE
nominee. should substitute the term “controlling person that is a
• A QSL. specified U.S. person” for “substantial U.S. owner” and refer
For chapter 3 purposes (including sections 1445 and to the applicable Model 2 IGA for the definition of controlling
1446), a recipient does not include any of the following. person. A territory NFFE that is not an excepted NFFE
• An NQI or disclosing QI. determines its substantial U.S. owners by applying the 10%
• A nonwithholding foreign partnership (NWP) if the income threshold in Regulations section 1.1473-1(b)(1).
is not effectively connected with its conduct of a trade or Territory FI. A territory FI is a financial institution that is
business in the United States. incorporated or organized under the laws of any U.S. territory
• A disregarded entity other than a hybrid entity claiming and is not an investment entity. See Regulations section
treaty benefits. 1.1471-5(e)(1)(iii) for the definition of investment entity.
• A foreign trust that is described in section 651(a) (a foreign
simple trust) if the income is not effectively connected with U.S. branch treated as a U.S. person. A U.S. branch may
the conduct of a trade or business in the United States. agree to be treated as a U.S. person if it meets the
• A foreign trust to the extent that all or a part of the trust is requirements described in the regulations under chapter 3.
treated as owned by the grantor or other person under See Regulations section 1.1441-1(b)(2)(iv)(A). A U.S. branch
sections 671 through 679 (a foreign grantor trust). may also agree to be treated as a U.S. person for purposes of
• A U.S. branch that is not treated as a U.S. person unless a sale subject to section 1446(f) or for a PTP distribution.
the income is, or is treated as, effectively connected with the Additionally, a territory FI may agree to be treated as a U.S.
conduct of a trade or business in the United States. person for any of these purposes.
For chapter 4 purposes, a recipient also includes any of The U.S. branch or territory FI must provide a Form
the following. W-8IMY showing that it is agreeing to be treated as a U.S.
• A recalcitrant account holder not included in a chapter 4 person.
reporting pool.

8 Instructions for Form 1042-S (2025)

- 9 -

Enlarge image

Page 9 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

A U.S. branch that is treated as a U.S. person is described above paid to any nonresident alien individual by
! treated as such solely for purposes of determining reporting all such interest.
CAUTION whether a payment is subject to withholding by the
When completing Form 1042-S, use income code 29 in
branch. The branch is, for purposes of information reporting, box 1 and exemption code 02 in box 3a for chapter 3
a foreign person, and payments to such a branch must be purposes, and the applicable chapter 4 exemption code in
reported on Form 1042-S. box 4a (see the instructions for boxes 3a and 4a, later).
• Interest on deposits subject to chapter 4 withholding.
Withholdable payment. A withholdable payment is Interest on deposits from U.S. sources are withholdable
generally any payment of U.S. source FDAP income, subject payments and, therefore, may be subject to withholding
to certain exceptions. For exceptions and additional under chapter 4. If payers withhold tax, they must report the
information, see Pub. 515 and Regulations section interest and tax on Form 1042-S.
1.1473-1(a). • Corporate distributions. The entire amount of a
Withholding certificate. The term “withholding certificate” corporate distribution (whether actual or deemed) must be
refers to Form W-8 or Form W-9 in most cases. reported, regardless of any estimate of the part of the
distribution that represents a taxable dividend. Any
Note. Throughout these instructions, a reference to or distribution, however, that is treated as gain from the
mention of “Form W-8” is a reference to Forms W-8BEN, redemption of stock is not an amount subject to withholding.
W-8BEN-E, W-8ECI, W-8EXP, and/or W-8IMY. For information on distributions from the disposition of a U.S.
Withholding foreign partnership (WP) or withholding real property interest paid by a publicly traded trust or a QIE,
foreign trust (WT). A WP or WT is a foreign partnership or see Distributions Attributable to Dispositions of U.S. Real
trust that has entered into a withholding agreement with the Property Interests by Publicly Traded Trusts and Qualified
IRS in which it agrees to assume primary withholding Investment Entities, later.
responsibility for all payments that are made to it for its • Interest. Interest subject to reporting includes the part of a
partners, beneficiaries, or owners under chapter 3 (except for notional principal contract payment that is characterized as
sections 1445 and 1446(a) or (f)) and under chapter 4. For interest.
information on these withholding agreements, see Rev. Proc. • Rents.
2017-21, available at IRS.gov/irb/2017-06_IRB#RP-2017-21 , • Royalties.
and Regulations section 1.1441-5. • Compensation for independent personal services
performed in the United States.
Nonwithholding foreign partnership (NWP) or
nonwithholding foreign trust (NWT). An NWP or NWT is • Compensation for dependent personal services
performed in the United States (but only if the beneficial
any partnership or trust (other than a complex trust) that is
owner is claiming treaty benefits).
not a U.S. person and that is not a WP or WT.
• Annuities.
Amounts Subject to Reporting on • Pension distributions and other deferred income.
• Most gambling winnings. Proceeds from a wager placed
Form 1042-S in blackjack, baccarat, craps, roulette, or big-6 wheel are not
Amounts subject to reporting on Form 1042-S are amounts amounts subject to reporting.
from U.S. sources paid to foreign persons (including persons • Cancellation of indebtedness. Agents must report
presumed to be foreign) or included in a U.S. payee pool that income from the cancellation of indebtedness unless the
are reportable under chapters 3 and 4, even if no amount is withholding agent is unrelated to the debtor and does not
deducted and withheld from the payment because of a treaty have knowledge of the facts that give rise to the payment.
or Internal Revenue Code exception to taxation or if any • Effectively connected income (ECI). ECI includes
amount withheld was repaid to the payee. Amounts subject to amounts that are (or are presumed to be) effectively
reporting are amounts from sources within the United States connected with the conduct of a trade or business in the
that constitute (a) FDAP income (including deposit interest); United States even if no withholding certificate is required.
(b) certain gains from the disposal of timber, coal, or Note that bank deposit interest is subject to Form 1042-S
domestic iron ore with a retained economic interest; and (c) reporting if it is ECI or otherwise reportable on Form 1042-S
gains relating to contingent payments received from the sale (see Interest on deposits paid to certain nonresident aliens in
or exchange of patents, copyrights, and similar intangible this bullet list, earlier). ECI of a PTP distributed to a foreign
property. A payment is also subject to reporting if withholding partner or an amount realized subject to reporting under
under chapter 4 is applied (or required to be applied) to the Regulations section 1.1461-1(c)(2)(i)(Q) must be reported on
payment. Form 1042-S.
• Notional principal contract income. Income from
Amounts subject to reporting on Form 1042-S include, but notional principal contracts that the payer knows, or must
are not limited to, the following amounts to the extent they are presume, is effectively connected with the conduct of a U.S.
from U.S. sources. trade or business is subject to reporting using income code
• Interest on deposits paid to certain nonresident 32. The amount to be reported is the amount of cash paid on
aliens. Withholding agents must report certain interest the contract during the calendar year. Any amount of interest
described in section 871(i)(2)(A) aggregating $10 or more determined under the provisions of Regulations section
paid with respect to a deposit maintained at an office within 1.446-3(g)(4) (dealing with interest in the case of a significant
the United States if such interest is paid to a nonresident nonperiodic payment) is reportable as interest and not as
alien individual who is a resident of a country identified in notional principal contract income. See, however, the
Rev. Proc. 2023-36, 2023-51 I.R.B. 1485, available at separate reporting for dividend equivalents, later.
IRS.gov/irb/2023-51_IRB#REV-PROC-2023-36 (or any • Insurance premiums. Insurance premiums from U.S.
superseding revenue procedure that is effective as of sources that have cash value (as defined in Regulations
January 1, 2025). A payer may elect to report interest section 1.1471-5(b)(3)(vii)(B)) are withholdable payments

Instructions for Form 1042-S (2025) 9

- 10 -

Enlarge image

Page 10 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

under chapter 4, regardless of whether the premium 1. Substitute dividends that are dividend equivalents
payments are subject to the section 4371 excise tax. (income code 34 or 53).
Withholding agents may treat premiums for insurance 2. Dividend equivalents with respect to transactions that
contracts that do not have cash value as excluded are section 871(m) transactions as a result of combining
nonfinancial payments under chapter 4 and, therefore, not as transactions under Regulations section 1.871-15(n) (income
withholdable payments under regulations proposed in code 56).
REG-132881-17. If the payment is actually withheld upon or
should have been withheld upon (but the withholding agent 3. All other dividend equivalents (income code 40).
failed to withhold), such amount must be reported on Form Note. In the case of a dividend equivalent, because the
1042-S. Insurance premiums from U.S. sources are amounts dividend equivalent is determined on a gross basis, there
subject to chapter 3 withholding that must be reported on may be a payment for reporting purposes even when there is
Form 1042-S (excluding amounts subject to the section 4371 no transfer of funds. See Regulations section 1.871-15(i).
excise tax that must be reported on Form 1042-S). • Guarantee of indebtedness. This includes amounts
• Real estate mortgage investment conduit (REMIC) paid, directly or indirectly, for the provision of a guarantee of
excess inclusions. Excess inclusions from REMICs (income indebtedness issued after September 27, 2010. They must
code 02) and withheld tax must be reported on Form 1042-S. be paid by a noncorporate resident or U.S. corporation or by
A domestic partnership must separately state a partner's any foreign person if the amounts are effectively connected
allocable share of REMIC taxable income or net loss and the with the conduct of a U.S. trade or business. Report these
excess inclusion amount on Schedule K-1 (Form 1065). If the amounts using income code 41.
partnership allocates all or some part of its allocable share of • Specified federal procurement payments. Report
REMIC taxable income to a foreign partner, the partner must specified federal procurement payments subject to
include the partner's allocated amount in income as if that withholding under section 5000C.
amount was received on the earliest to occur of (1) the date • PTPs. Certain payments of ECI attributable to PTP
of distribution by the partnership, (2) the date the foreign interests (described earlier) are subject to reporting on Form
partner disposes of its indirect interest in the REMIC residual 1042-S. See Publicly Traded Partnerships (Sections 1446(a)
interest, or (3) the last day of the partnership's tax year. and (f) Withholding Tax), later, for additional information.

The partnership must withhold tax on the part of the Amounts That Are Not Subject to
REMIC amount that is an excess inclusion.
Reporting on Form 1042-S
An excess inclusion allocated to the following foreign
persons must be included in that person's income at the Interest and OID from short-term obligations. Interest
same time as other income from the entity is included in and OID from any obligation payable 183 days or less from
income. the date of original issue are generally not required to be
• Shareholder of a real estate investment trust (REIT). reported on Form 1042-S. See, however, the reporting
• Shareholder of a regulated investment company (RIC). requirements for deposit interest described in Interest on
• Participant in a common trust fund. deposits paid to certain nonresident aliens in the bullet list
• Patron of a subchapter T cooperative organization. under Amounts Subject to Reporting on Form 1042-S, earlier.
• Students, teachers, and researchers. Amounts paid to Registered obligations targeted to foreign markets.
foreign students, trainees, teachers, or researchers as Interest on a registered obligation that is targeted to foreign
scholarship or fellowship income, and compensation for markets and that qualifies as portfolio interest is not subject
personal services (whether or not exempt from tax under an to reporting if it is paid to a registered owner that is a financial
income tax treaty) must be reported. However, amounts that institution or member of a clearing organization and you have
are exempt from tax under section 117 are not subject to received the required certifications.
reporting.
• Amounts paid to foreign governments, foreign central Reporting will be required on interest paid on any
banks of issue, and international organizations. These ! registered obligation (regardless of whether targeted
amounts are subject to reporting even if they are exempt from CAUTION to foreign markets) if the registered obligation is
chapter 3 withholding under section 892 or 895. issued after December 31, 2015.
• Foreign targeted registered obligations. Interest paid
on registered obligations targeted to foreign markets paid by Bearer obligations targeted to foreign markets. Do not
a U.S. person to a foreign person other than a financial file Form 1042-S to report interest not subject to withholding
institution or a member of a clearing organization is an on bearer obligations if a Form W-8 is not required.
amount subject to reporting. Withholding is required on interest paid on any
• OID from the redemption of an OID obligation. The ! bearer obligations targeted to foreign markets if the
amount subject to reporting is the amount of OID actually CAUTION obligation is issued after March 18, 2012. You must
includible in the gross income of the foreign beneficial owner file Form 1042-S to report this interest paid on an obligation
of the income, if known. Otherwise, the withholding agent issued after that date.
should report the entire amount of OID as if the recipient held
the instrument from the date of original issuance. See Pub. Notional principal contract payments that are not ECI or
1212, Guide to Original Issue Discount (OID) Instruments. dividend equivalents. Do not report on Form 1042-S
• Certain distributions attributable to dispositions of amounts paid on a notional principal contract, other than an
U.S. real property interests. See Distributions Attributable SNPC, if the amounts are not effectively connected with the
to Dispositions of U.S. Real Property Interests by Publicly conduct of a trade or business in the United States. All
Traded Trusts and Qualified Investment Entities, later. amounts paid on an SNPC that are treated as dividend
• Dividend equivalents. Dividend equivalents have been equivalents should be reported as such on Form 1042-S.
divided into the following three income code reporting
categories.

10 Instructions for Form 1042-S (2025)

- 11 -

Enlarge image

Page 11 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Accrued interest and OID. Interest paid on obligations sold distributions may be included in the shareholder's gross
between interest payment dates and the part of the purchase income as a dividend (income code 06) from the QIE, not as
price of an OID obligation that is sold or exchanged in a long-term capital gain.
transaction other than a redemption is not subject to In addition, a qualified foreign pension fund or an entity all
reporting unless the sale or exchange is part of a plan, the of the interests of which are held by a qualified foreign
principal purpose of which is to avoid tax, and the withholding pension fund is generally not subject to the look-through rule
agent has actual knowledge or reason to know of such plan. for distributions by QIEs for purposes of section 897(h).
Certain withholdable payments. Withholdable payments Use Forms 1042-S and 1042 to report and pay over the
not subject to reporting for chapter 3 purposes (other than withheld amounts. All other withholding required under
bank deposit interest paid to certain nonresident aliens) are section 1445 is reported and paid over using Form 8288, U.S.
not required to be reported if withholding is not applied (or Withholding Tax Return for Certain Dispositions by Foreign
required to be applied) under chapter 4. Persons, and Form 8288-A.
Certain amounts realized. An amount realized that is For more information on reporting income from real
excepted from withholding under Regulations section property interests, see U.S. Real Property Interest in Pub.
1.1446(f)-4(b)(3) (less than 10% effectively connected gain 515.
by partnership).
Publicly Traded Partnerships
Distributions Attributable to (Sections 1446(a) and (f) Withholding
Dispositions of U.S. Real Property Tax)
Interests by Publicly Traded Trusts Although a PTP is a withholding agent for a distribution it
makes to its partners, an entity receiving the distribution and
and Qualified Investment Entities acting as a nominee for the distribution is also treated as a
Publicly traded trusts. In general, when a publicly traded withholding agent for the distribution and is required to
trust makes a distribution to a foreign person attributable to withhold and report on Form 1042-S with respect to the
the disposition of a U.S. real property interest, it must amounts subject to withholding attributable to the distribution
withhold tax under section 1445. However, this withholding paid to foreign partners of the PTP. A nominee for this
liability is shifted to the person who pays the distribution to a purpose is a person holding a PTP interest on behalf of a
foreign person (or to the account of the foreign person) if the foreign person and that is a domestic person, a U.S. branch
special notice requirement of Regulations section 1.1445-8(f) of a foreign corporation treated as a U.S. person for the
and other requirements of Regulations section 1.1445-8(b)(1) distribution, or a QI assuming primary withholding
are satisfied. responsibility for the distribution. See Regulations section
1.1446-4(b)(3). If you are the nominee for a PTP distribution,
The amount subject to withholding for a distribution by a enter the PTP's name and other required information in boxes
publicly traded trust is determined under the rules of 16a through 16e with respect to the PTP on a Form 1042-S to
Regulations section 1.1445-5(c)(3). report the amount of a distribution subject to section 1446(a)
QIEs. Special rules apply to QIEs. A QIE is one of the (income code 27), to report an amount realized on the
following. distribution under section 1446(f) (income code 57), or when
• A REIT. income code 58 applies to the distribution (for income not
• A RIC that is treated as a U.S. real property holding determinable by the nominee on the distribution), including
corporation (after applying certain rules in section 897(h)(4) when the 30% withholding rate under chapter 3 applies under
(A)(ii)). Regulations section 1.1446-4(d). For a payment reported
with income code 27 or 57, or income code 58 when
Look-through rule for QIEs. In most cases, any distribution withholding is at the rate under section 1446(a), report
from a QIE to a nonresident alien, foreign corporation, or chapter 4 exemption code 14 (effectively connected income).
other QIE that is attributable to the QIE’s gain from the sale or If withholding is instead applied at a 30% rate on a payment
exchange of a U.S. real property interest is treated as gain reported with income code 58, report chapter 4 exemption
recognized by the nonresident alien, foreign corporation, or code 21 (other payment not subject to chapter 4 withholding).
other QIE from the sale or exchange of a U.S. real property See Regulations section 1.1446-4(d)(1). For income
interest. attributable to the distribution that is subject to withholding
A distribution by a QIE to a nonresident alien or foreign under chapter 3 or 4, report using the income code that
corporation that is treated as gain from the sale or exchange would otherwise apply to report the payment to the recipient
of a U.S. real property interest by the shareholder is subject on a Form 1042-S for the year. Thus, unlike for other
to withholding at 21%. payments described in this paragraph, you need not
Certain exceptions apply to the look-through rule for associate the income subject to chapter 3 or 4 withholding
distributions by QIEs. Any distribution by a QIE with respect with the PTP making the distribution for purposes of reporting
to stock regularly traded on an established securities market on an additional Form 1042-S. These reporting requirements
in the United States is not treated as gain from the sale or apply to a PTP distribution paid to a QI except that you need
exchange of a U.S. real property interest if the shareholder not associate any income attributable to a PTP distribution
did not own more than 5% of that stock (or 10% of that stock with the PTP making the distribution for reporting on Form
in the case of REITs) at any time during the 1-year period 1042-S when you report to the QI as the recipient with
ending on the date of the distribution. A distribution by a REIT respect to a withholding rate pool.
is generally not treated as gain from the sale or exchange of a
U.S. real property interest if the shareholder is a qualified
shareholder (as described in section 897(k)(3)). These

Instructions for Form 1042-S (2025) 11

- 12 -

Enlarge image

Page 12 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

As a result of the above reporting for PTP Chapter 4 withholding. For purposes of chapter 4, a
TIP distributions, in certain cases a nominee may need to withholding agent must withhold 30% of a withholdable
issue several Forms 1042-S with respect to a foreign payment (defined earlier) made to an FFI that is or is
partner based on the income codes associated with PTP presumed to be a nonparticipating FFI (defined earlier). It
distributions paid to the partner during the year and (in also applies to withholdable payments made to certain
certain cases) the PTP making the distribution. NFFEs that fail to identify their substantial U.S. owners (or to
certify that they have none) under Regulations section
For purposes of section 1446(f), a broker is generally 1.1472-1(b). For more information, see Chapter 4
required to report on Form 1042-S an amount realized from Responsibilities under Responsibilities of a Withholding
the transfer of a PTP interest that is paid to a foreign partner Agent To Obtain Form W-8 in the Instructions for the
that is the transferor of the interest or to an NQI (other than Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP,
when the broker agrees to report the NQI's account holders and W-8IMY. Also see Pub. 515.
on Form 1042-S), a QI (other than a disclosing QI), or a U.S. A payment will be subject to withholding under either
branch or territory FI that is treated as a U.S. person for the chapter 3 or chapter 4 but not both. If the payment is of an
payment. A broker should report the aggregate of the amount subject to both chapter 3 and chapter 4 withholding,
amounts realized from sales of PTP interests paid to each of chapter 4 withholding takes precedence.
these recipients using income code 57 and chapter 4
exemption code 14 (effectively connected income). For the Before Completing Form 1042-S
reporting of amounts attributable to PTP distributions You must complete the following steps before completing
(including distributions subject to section 1446(f) Form 1042-S.
withholding), see boxes 16a through 16e, later. For further
information on reporting of amounts realized and PTP Step 1. Determine if you have a Form 1042-S filing
distributions paid to QIs, see Payment to QI of PTP obligation. If you make a payment described under Amounts
distributions or amounts realized, later. For further Subject to Reporting on Form 1042-S, earlier, you are
information on reporting of amounts realized and PTP required to file Form 1042-S for that payment. Note that you
distributions paid to nonqualified intermediaries, see may have a Form 1042-S reporting obligation even if
Amounts paid to an NQI or a flow-through entity of amounts withholding is not required.
realized and PTP distributions, later. For when an amount Step 2. Determine whether the payment is:
realized is reportable on Form 1042-S for section 1446(f) • A “withholdable payment” under chapter 4,
purposes, see Regulations section 1.1461-1(c)(2)(i). • An “amount subject to withholding under chapter 3,”
In a case in which a partner that is a U.S. person was • Both a withholdable payment and an amount subject to
TIP treated as a foreign partner for purposes of withholding under chapter 3, or
withholding under section 1446(a) or (f) (including an • Neither a withholdable payment nor an amount subject to
allocation of a payment to the person made on a withholding withholding under chapter 3.
statement), a Form 1042-S may be used to report the Be sure to carefully read through the exceptions to
payment (and withholding) with respect to the U.S. person. “withholdable payment” and the exemptions from withholding
The applicable Form 1099 must also be furnished when or taxation provided under chapter 3 that are included in Pub.
otherwise required of the withholding agent with respect to 515. Note that reporting and withholding are done either
the payment but should not report the withholding that was under chapter 3 or chapter 4, not both. However, even if
applied under section 1446(a) or (f). For reporting reporting is done under chapter 3, you may be required to
requirements for Form 1099, see the General Instructions for provide certain chapter 4 information.
Certain Information Returns.
Step 3. Determine the chapter indicator to be entered in
box 3. The chapter indicator is generally based on whether
Partnerships (other than PTPs) that have effectively amounts were withheld (or paid by the withholding agent)
connected gross income allocable to foreign partners must under chapter 3 or chapter 4. For example, if the payment is a
file Form 8804, Annual Return for Partnership Withholding withholdable payment and it is subject to chapter 4
Tax (Section 1446). If these partnerships have effectively withholding (see Requirement To Withhold, earlier), enter “4”
connected taxable income allocable to foreign partners, they in box 3. If no withholding was required on the payment, enter
must also pay a withholding tax under section 1446 and “3” in box 3. For additional information, see the instructions
report these amounts on Form 8804 and the partners' for box 3, later.
allocable shares of these amounts on Form 8805.
Note. You must always complete boxes 4a (chapter 4
Requirement To Withhold exemption code) and 4b (chapter 4 withholding tax rate)
Chapter 3 withholding. For purposes of sections 1441 and regardless of the chapter indicator entered in box 3.
1442, a withholding agent must withhold 30% of any payment
Note. If a payment is a withholdable payment under
of an amount subject to withholding under chapter 3 (defined
chapter 4, you must complete boxes 4a (chapter 4 exemption
earlier) made to a payee that is a foreign person (or is
code), 4b (chapter 4 withholding tax rate), and 13g (recipient
presumed to be a foreign person) unless it can associate the
chapter 4 status code), even if the payment is properly
payment with documentation to treat the payment as made to
classified with a chapter 3 indicator in box 3.
a foreign person entitled to a reduced rate of or exemption
from withholding. For more information, see Chapter 3 Be sure to complete a separate Form 1042-S for:
Responsibilities under Responsibilities of a Withholding • Each recipient of income,
Agent To Obtain Form W-8 in the Instructions for the • Each income type paid to the same recipient, and
Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP,
and W-8IMY. Also see Pub. 515.

12 Instructions for Form 1042-S (2025)

- 13 -

Enlarge image

Page 13 of 42    Fileid: … orm-1042-s/2025/a/xml/cycle06/source                     11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• Each amount to which a separate tax rate was applied (if      (chapter 3 exemption code), “30.00” in box 3b (chapter 3 tax 
you withheld at more than one tax rate for a specific type of   rate), “15” in box 4a (payee not subject to chapter 4 
income that you paid to the same recipient).                    withholding), “00.00” in box 4b (chapter 4 tax rate), “16” in 
                                                                box 13f (individual), and “23” in box 13g (individual).
Payments by U.S. Withholding Agents
                                                                    See Appendix C for a comprehensive analysis of this 
In general. U.S. withholding agents making payments             TIP Example 1 fact pattern, including a step-by-step 
described under Amounts Subject to Reporting on Form                guide on how to complete Form 1042-S in its entirety.
1042-S, earlier, must file a separate Form 1042-S for each 
                                                                A U.S. withholding agent making a payment directly to a 
recipient who receives the income. Furthermore, withholding 
                                                                foreign partner in a PTP and that is either acting as a 
agents are not permitted to report multiple types of income 
                                                                nominee for a PTP distribution subject to withholding under 
on a single Form 1042-S (or substitute Form 1042-S) 
                                                                section 1446(a) or as a broker paying an amount realized 
furnished to a recipient or on Copy A filed with the IRS. These 
                                                                subject to reporting on Form 1042-S for section 1446(f) 
filers must use a separate Form 1042-S (or substitute form) 
                                                                purposes must complete a Form 1042-S and treat the partner 
for information reportable on a single type of income.
                                                                as a recipient. Thus, the withholding agent must treat a 
  See Payments Made to Persons Who Are Not Recipients,          foreign upper-tier partnership in the PTP or a foreign simple 
later, if the payment is made to a foreign person that is not a trust as a recipient for reporting of these payments on Form 
recipient.                                                      1042-S. With respect to an upper-tier partnership, the 
                                                                reporting described in the preceding sentence applies 
Payments to Recipients                                          regardless of whether the withholding agent determines its 
Payments directly to beneficial owners or partners.         A   withholding on the payment based on the statuses of the 
U.S. withholding agent making a payment subject to              partners in the upper-tier partnership (when permitted under 
withholding under chapter 3 or 4 directly to a beneficial owner applicable regulations to section 1446(a) or (f) for 
must complete Form 1042-S and treat the beneficial owner        determining the rate of withholding).
as the recipient. Boxes 15a through 15i should be left blank.   Payments to a QI (including a QDD), WP, or WT under 
The Form 1042-S must also include the appropriate               chapter 3 or 4. A U.S. withholding agent that makes 
chapter 3 and chapter 4 exemption codes, if applicable, in      payments to a QI subject to withholding under chapter 3 or 4 
boxes 3a and 4a, as well as the appropriate recipient codes     (whether or not the QI assumes primary withholding 
for the chapter 3 and chapter 4 status codes for a payment      responsibility), a QI acting as a QDD with respect to a 
that is a withholdable payment and an amount subject to         payment, a WP, or a WT should complete Form 1042-S in 
chapter 3 withholding. A U.S. withholding agent should          most cases, treating the QI, QDD, WP, or WT as the recipient.
complete boxes 16a through 16e only if it is completing Form 
                                                                If a payment is being made to a QI that is acting as a QDD 
1042-S as a paying agent acting pursuant to an agreement to 
                                                                with respect to the payment, a U.S. withholding agent should 
act as an authorized agent for filing and reporting Forms 
                                                                report the QDD as the recipient showing the QDD as the 
1042 and 1042-S.
                                                                recipient in box 13a (identifying the QDD by the name used 
  In the case of foreign joint owners, you may provide a        for the QDD on the Form W-8IMY it provides, which should 
single Form 1042-S made out to the owner whose status you       include a branch identifier, if applicable) and using recipient 
relied upon to determine the applicable rate of withholding     code 35 (qualified derivatives dealer) as the chapter 3 status 
(the owner subject to the highest rate of withholding). If,     code. See Payments allocated, or presumed made, to U.S. 
however, any one of the owners requests its own Form            nonexempt recipients, later, for exceptions.
1042-S, you must furnish a Form 1042-S to the person who 
                                                                A QI that does not assume primary withholding 
requests it. If the request is made after a Form 1042-S was 
                                                                responsibility for chapters 3 and 4 purposes is required to 
filed reporting the payment and tax withheld to only one of 
                                                                provide information regarding the allocations of income 
the joint owners, you should amend the originally filed Form 
                                                                subject to a particular withholding rate to the withholding 
1042-S to allocate the payment and tax withheld among the 
                                                                agent on the withholding statement associated with its Form 
joint owners accordingly and provide copies of the amended 
                                                                W-8IMY. In such a case, the U.S. withholding agent must 
forms to each recipient. If more than one Form 1042-S is 
                                                                complete a separate Form 1042-S for each withholding rate 
issued for a single payment, the aggregate amount paid and 
                                                                pool associated with the QI. For purposes of chapter 4, a QI 
tax withheld that is reported on all Forms 1042-S cannot 
                                                                may provide a single pool of recalcitrant account holders 
exceed the total amounts paid to joint owners and the tax 
                                                                (rather than separate pools for each class). In such a case, 
withheld on those payments. In any event, each Form 1042-S 
                                                                the withholding agent may use chapter 4 pooled reporting 
can only include the recipient information (boxes 13a through 
                                                                code 49 (QI-recalcitrant pool—general). A QI that assumes 
13d) for one of the beneficial owners. Form 1042-S must not 
                                                                primary withholding responsibility, a WP, or a WT is not 
be completed with more than one of the joint owners as the 
                                                                required to provide withholding rate pool information to a 
recipient.
                                                                withholding agent but will report such information directly to 
        In the case of joint owners, Form 1042-S can only list  the IRS.
  !     one of the owners as the recipient in box 13a. Form     A U.S. withholding agent making a withholdable payment 
CAUTION 1042-S must not be completed with more than one of 
                                                                to an FFI that is a QI (that assumes primary withholding 
the joint owners as the recipient.                              responsibility and is not acting as a QDD with respect to the 
                                                                payment), a WP, or a WT must use recipient code 12 
  Example 1. WA, a U.S. withholding agent, makes a 
                                                                (qualified intermediary), 09 (withholding foreign partnership), 
withholdable payment of U.S. source dividends to A, a 
                                                                or 11 (withholding foreign trust) as the chapter 3 status code 
foreign individual from whom it has received a Form W-8BEN 
                                                                and must use recipient code 05 (participating FFI—other), 06 
and who is not eligible for a reduced rate of chapter 3 
                                                                (participating FFI—reporting Model 2 FFI), 07 (registered 
withholding under a treaty. WA must file a Form 1042-S for A, 
                                                                deemed-compliant FFI—reporting Model 1 FFI), 09 
enter “3” in box 3, “06” in box 1 (income code), “00” in box 3a 

Instructions for Form 1042-S (2025)                                                                                           13

- 14 -

Enlarge image

Page 14 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

(registered deemed-compliant FFI—other) for an FFI treated 12 (qualified intermediary) as the chapter 3 status code, and
as deemed-compliant under an IGA, 31 (nonreporting IGA recipient code 05 (participating FFI—other) as the chapter 4
FFI), or, for a payment to a QI, 27 (exempt beneficial owner) status code. WA must also complete a Form 1042-S for the
as the chapter 4 status code. A U.S. withholding agent must dividends allocated to the chapter 4, 30% withholding rate
use chapter 4 recipient code 48 (U.S. payees pool) when pool, showing “4” in box 3, chapter 3 exemption code 12
reporting a reportable amount allocated to a chapter 4 (payee subjected to chapter 4 withholding) in box 3a, “00.00”
withholding rate pool of U.S. payees of a QI and report the in box 3b (chapter 3 tax rate), “00” in box 4a (chapter 4
chapter 3 recipient code 12 (qualified intermediary). A U.S. exemption code), and “30.00” in box 4b with QI as the
withholding agent must not use any chapter 3 pooled recipient in box 13a, and recipient code 12 (qualified
reporting code (codes 27 through 32), as such codes are intermediary) as the chapter 3 status code, and recipient
only to be used by a withholding agent that is a QI, WP, or code 49 (QI-recalcitrant pool—general) as the chapter 4
WT. See Amounts Paid by QIs, later, and the instructions for status code.
boxes 13f and 13g, later. Use of an inappropriate recipient Payments allocated by QIs, or presumed made, to U.S.
code may cause a notice to be generated. nonexempt recipients. A QI may provide Forms W-9 or
A QI is generally required to act in such capacity only other information regarding U.S. nonexempt recipients that
the QI (or other entity maintaining the account) is required to
! for designated accounts for purposes of chapters 3, report under chapter 61 and for which the QI does not
CAUTION 4, and 61. Therefore, such an entity may also provide
a Form W-8IMY in which it certifies that it is acting as an NQI assume primary Form 1099 reporting responsibility. A QI may
for other accounts and, if it is an FFI that is receiving a also provide information regarding U.S. nonexempt recipients
withholdable payment, that it is a participating FFI, a on whom the QI elects to backup withhold under section
registered deemed-compliant FFI, or an FFI treated as 3406 instead of withholding under chapter 4 on payments
deemed-compliant under an IGA. A U.S. withholding agent made to an account holder. If Forms W-9 or other information
that receives a Form W-8IMY on which the foreign person is provided together with information allocating all or a part of
providing the form indicates that it is not acting as a QI may the payment to U.S. nonexempt recipients, you must report
not treat the foreign person as a recipient except as income allocable to the U.S. nonexempt recipients on the
otherwise provided in these instructions. A withholding agent appropriate Form 1099 and not on Form 1042-S even though
must not use the EIN that a QI provides in its capacity as you are paying that income to a QI. The QI may also provide
such to report payments that are treated as made to an entity information regarding U.S. nonexempt recipients in a
in its capacity as an NQI. In that case, use the GIIN, if any, chapter 4 withholding rate pool that the withholding agent
and EIN that is provided by the entity on its Form W-8IMY in must report on Form 1042-S.
which it claims that it is acting as an NQI or a flow-through You may also be required under the presumption rules to
entity. treat a payment made to a QI as made to a payee that is a
U.S. nonexempt recipient from which you must withhold on
Note. A withholding agent is required to use chapter 4 the payment under the backup withholding provisions. In this
reporting pool codes as the chapter 4 status code in the case case, you must report the payment on the appropriate Form
of withholdable payments made to: 1099. See the General Instructions for Certain Information
• A QI that does not assume primary withholding Returns, available at IRS.gov/1099GeneralInstructions.
responsibility; Example 3. WA, a U.S. withholding agent, makes a
• A participating FFI or registered deemed-compliant FFI withholdable payment of U.S. source dividends to QI, a
that is an NQI, NWP, or NWT; or qualified intermediary and registered deemed-compliant FFI
• An NQI, NWP, or NWT (other than a nonparticipating FFI) that is a local FFI described in Regulations section
that provides a pool of nonparticipating FFIs, 1.1471-5(f)(1)(i)(A). QI provides WA with a valid Form
if the QI, NQI, NWP, or NWT provides chapter 4 withholding W-8IMY certifying that it is transmitting Forms W-9 for U.S.
rate pool information in the withholding statement associated nonexempt recipients and with which it associates a
with its Form W-8IMY. See Amounts paid to an NQI or a withholding statement that allocates 95% of the payment to a
flow-through entity of withholdable payments, later, and the chapter 3, 15% withholding rate pool with a single chapter 4
presumption rules under Regulations section 1.1471-3(f) exemption code, and 5% of the payment to C, a U.S.
when such information is not provided for a withholdable individual. QI also provides WA with C's Form W-9. C is a
payment made to an entity. direct account holder of QI and a U.S. citizen that is a
Example 2. WA, a U.S. withholding agent, makes a resident of QI's local jurisdiction that QI is not required to
withholdable payment of U.S. source dividends to QI, a report under chapter 4 (see Regulations section 1.1471-5(f)
qualified intermediary that does not assume primary chapters (1)(i)(A)) and thus cannot be included in a chapter 4
3 and 4 withholding responsibility and that is a participating withholding rate pool of U.S. payees. See Regulations
FFI. QI provides WA with a valid Form W-8IMY with which it section 1.6049-4(c)(4). WA must complete a Form 1042-S,
associates a withholding statement that allocates 95% of the showing QI as the recipient in box 13a, and WA should use
payment to a chapter 3, 15% withholding rate pool with a recipient code 12 (qualified intermediary) as the chapter 3
single chapter 4 exemption code, and 5% of the payment to a status code and recipient code 09 (registered
chapter 4, 30% withholding rate pool of recalcitrant account deemed-compliant FFI—other) as the chapter 4 status code
holders. WA must complete a Form 1042-S for the dividends for the dividends allocated to the 15% withholding rate pool.
allocated to the chapter 3, 15% withholding rate pool, WA must also complete a Form 1099-DIV issued to C
showing “3” in box 3, “00” in box 3a (chapter 3 exemption reporting the part of the dividend allocated to C.
code), “15.00” in box 3b (chapter 3 tax rate), chapter 4 Example 4. WA, a withholding agent, makes a
exemption code 15 (payee not subject to chapter 4 withholdable payment of U.S. source dividends to QI, a
withholding) in box 4a, “00.00” in box 4b (chapter 4 tax rate), qualified intermediary that is a reporting Model 1 FFI. QI
and QI as the recipient in box 13a along with recipient code provides WA with a valid Form W-8IMY with which it
associates a withholding statement that allocates 40% of the

14 Instructions for Form 1042-S (2025)

- 15 -

Enlarge image

Page 15 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

payment to a chapter 3, 15% withholding rate pool and 40% Although a payment to a disclosing QI is reported as
to a chapter 3, 30% withholding rate pool. QI does not TIP made to a specified account holder of the QI (as the
provide any withholding rate pool information regarding the recipient), a U.S. withholding agent is required to
remaining 20% of the payment. WA must apply the provide a recipient copy of the Form 1042-S to the disclosing
presumption rule to the part of the payment (20%) that has QI maintaining the direct account for the partner in the PTP
not been allocated. Under the presumption rules of (in addition to the recipient copy issued to the account holder
Regulations section 1.1471-3(f) for a withholdable payment of the QI receiving the payment).
made to an entity, 20% of the payment is treated as paid to a
nonparticipating FFI. WA must complete three Forms 1042-S. Substitute dividends paid to qualified securities lenders
First, a Form 1042-S for dividends subject to 15% (QSLs). A withholding agent that makes payments of
withholding, showing “3” in box 3, “00” in box 3a (chapter 3 substitute dividends to a QSL should complete Form 1042-S
exemption code), “15.00” in box 3b (chapter 3 tax rate), treating the QSL as the recipient. Use income code 34 or 53.
chapter 4 exemption code 15 (payee not subject to chapter 4 Use recipient code 13 (qualified securities lender—qualified
withholding) in box 4a, “00.00” in box 4b (chapter 4 tax rate), intermediary) or 14 (qualified securities lender—other) as the
QI as the recipient in box 13a, recipient code 12 (qualified chapter 3 status code and include the applicable chapter 4
intermediary) as the chapter 3 status code, and recipient status code of the QSL.
code 07 (registered deemed-compliant FFI—reporting Model The withholding agent is not required to withhold on a
1 FFI) as the chapter 4 status code (because the payment is substitute dividend payment if it receives, at least annually, a
a withholdable payment). Second, a Form 1042-S for certificate from the QSL that includes a statement with the
dividends subject to 30% withholding, showing “3” in box 3, following information.
“00” in box 3a (chapter 3 exemption code), “30.00” in box 3b • The recipient of the substitute dividend is a QSL.
(chapter 3 tax rate), chapter 4 exemption code 15 (payee not • With respect to the substitute dividend it receives from the
subject to chapter 4 withholding) in box 4a, “00.00” in box 4b withholding agent, the QSL states that it will withhold and
(chapter 4 tax rate), QI as the recipient in box 13a, recipient remit or pay the proper amount of U.S. gross-basis tax.
code 12 (qualified intermediary) as the chapter 3 status code,
If the withholding agent receives a certificate from the QSL
and recipient code 07 (registered deemed-compliant
that includes a statement that contains the above information,
FFI—reporting Model 1 FFI) as the chapter 4 status code.
use chapter 3 exemption code 11.
Third, a Form 1042-S for dividends subject to 30%
withholding, showing “4” in box 3, chapter 3 exemption code If the QSL is also a QI with primary withholding
12 (payee subjected to chapter 4 withholding) in box 3a, responsibility, use chapter 3 exemption code 11 and not
“00.00” in box 3b (chapter 3 tax rate), “00” in box 4a exemption code 06 for chapter 3 purposes.
(chapter 4 exemption code), “30.00” in box 4b (chapter 4 tax Amounts paid to certain U.S. branches or territory FIs.
rate), “Unknown Recipient” as the recipient name in box 13a, A U.S. withholding agent making a payment to a U.S. branch
recipient code 21 (unknown recipient) as the chapter 3 status of an FFI or NFFE completes Form 1042-S as follows.
code, and recipient code 29 (unknown recipient) as the • If a withholding agent makes a payment to a U.S. branch
chapter 4 status code. Also, QI's name, status codes, country that has provided the withholding agent with a Form W-8IMY
code, address, GIIN, and QI-EIN must be entered in boxes stating that it has agreed to be treated as a U.S. person, the
15a through 15i. U.S. withholding agent treats the U.S. branch as the recipient
Payment to QI of PTP distributions or amounts realized. using chapter 3 recipient code 05 (U.S. branch—treated as
A U.S. withholding agent making a payment to a QI that is U.S. person) and chapter 4 recipient code 17 (U.S.
subject to withholding on a PTP distribution or an amount branch—treated as U.S. person).
realized subject to reporting for section 1446(f) purposes • If a withholding agent makes a payment to a U.S. branch
should generally treat the QI as the recipient and report as that has provided a Form W-8IMY to transmit information
described directly above for a U.S. withholding agent making regarding its chapter 4 reporting pools when the payment is a
payments to a QI for chapters 3 and 4 purposes (including withholdable payment or the branch provides a chapter 4
when the QI does not assume primary withholding withholding rate pool of U.S. payees and, to the extent
responsibility and provides withholding rate pool information). applicable, recipient specific information for chapter 3
In a case of a QI acting as a disclosing QI for a payment of a purposes, the U.S. withholding agent must complete a
PTP distribution or an amount realized subject to reporting separate Form 1042-S for each chapter 4 reporting pool
under section 1446(f), however, a U. S. withholding agent treating the U.S. branch as the recipient or, for chapter 3
should report the account holder of the QI as the recipient purposes, for each recipient that is a foreign person whose
and the QI as a disclosing QI (using chapter 3 status code 39 documentation is associated with the U.S. branch's Form
and reporting the QI's information in boxes 15a through 15i, W-8IMY. If a payment cannot be reliably associated with
including its QI-EIN). In a case in which a U.S withholding recipient documentation, the U.S. withholding agent must
agent makes a payment of a PTP distribution or amount complete Form 1042-S in accordance with the presumption
realized through multiple QIs acting as disclosing QIs, the rules. If a U.S. branch not treated as a U.S. person fails to
withholding agent should report in boxes 15a through 15i with certify that it will meet the requirements under Regulations
respect to the disclosing QI maintaining a direct account for section 1.1471-4(d)(2)(iii)(C), a withholding agent must
the partner in the PTP. For payments of PTP distributions report the branch as a nonparticipating FFI.
made to a QI, the U.S. withholding agent should report these • If a withholding agent cannot reliably associate a payment
payments with respect to the PTP making the distribution to with a Form W-8IMY from a U.S. branch, and if a withholding
the extent required, as discussed in Publicly Traded agent has an EIN for the branch, then the payment may be
Partnerships (Sections 1446(a) and (f) Withholding Tax), reported on a single Form 1042-S treating the U.S. branch as
earlier. the recipient and reporting the income as ECI.
• If a withholding agent makes a payment to a territory FI
acting as an intermediary or that is a flow-through entity, the

Instructions for Form 1042-S (2025) 15

- 16 -

Enlarge image

Page 16 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

withholding agent should report on Form 1042-S using the recipient. The result would be the same if LLC was a
chapter 3 status codes for payments to U.S. branches (with domestic entity.
the code used depending on whether the territory FI agrees A disregarded entity can, however, claim to be the
to be treated as a U.S. person). If the territory FI agrees to be beneficial owner of a payment if it is a hybrid entity claiming
treated as a U.S. person, the withholding agent should treaty benefits. See Form W-8BEN and its instructions for
similarly use the chapter 3 exemption code for a U.S. branch more information. If a disregarded entity claims on a valid
treated as a U.S. person. For chapter 4 purposes, the Form W-8BEN-E to be the beneficial owner, the U.S.
withholding agent should use the applicable chapter 4 status withholding agent must complete a Form 1042-S treating the
code for a territory FI (with the code used depending on disregarded entity as a recipient and using recipient code 26
whether the territory FI agrees to be treated as a U.S. (hybrid entity making treaty claim) as the chapter 3 status
person). In any case in which a payment is made to a territory code and the applicable recipient code for the chapter 4
FI described in this paragraph, the withholding agent should status code of the single owner when the payment is a
report the applicable territory in which the FI is resident for withholdable payment and chapter 4 withholding does not
purposes of box 13b (recipient's country code). apply.
Amounts paid to a foreign estate. If a U.S. withholding A hybrid entity with multiple owners may also claim treaty
agent makes a payment to a foreign estate, a Form 1042-S benefits. See Form W-8BEN-E and its instructions for more
must be completed showing the estate as the recipient. Use information on documentation requirements that apply in
recipient code 17 (estate) as the chapter 3 status code and such cases. If a hybrid entity treated as a resident of a treaty
the applicable recipient code for the chapter 4 status code. country claims treaty benefits on a valid Form W-8BEN-E
Dual claims. A U.S. withholding agent may make a payment associated with a withholdable payment (and chapter 4
to a foreign entity (for example, a hybrid entity) that is withholding does not apply with respect to any of its owners
simultaneously claiming an exemption from chapter 4 to such payment or portion of such payment), the U.S.
withholding and a reduced rate of tax under chapter 3 on its withholding agent should complete a Form 1042-S treating
own behalf for a part of the payment and an exemption from the hybrid entity as a recipient, use code 26 (hybrid entity
chapter 4 withholding and a reduced rate of tax under making treaty claim) as the chapter 3 recipient status code,
chapter 3 on behalf of persons in their capacity as interest and leave blank the chapter 4 recipient status code. To the
holders in that entity on the remaining part. If the claims are extent, however, that a portion of a withholdable payment is
consistent and the withholding agent has accepted the allocated to an owner of the hybrid entity for which chapter 4
multiple claims, a separate Form 1042-S must be filed for the withholding must be applied, the U.S. withholding agent must
entity for those payments for which the entity is treated as issue a separate Form 1042-S to such owner using the
claiming a reduced rate of withholding, and separate Forms applicable recipient codes for the owner's chapters 3 and 4
1042-S must be filed for each of the interest holders for those status codes and report the hybrid entity as the intermediary.
payments for which the interest holders are claiming a The withholding agent must do so for each such owner for
reduced rate of withholding. The Forms 1042-S must include which chapter 4 withholding applies and must exclude
the chapter 4 status of the payee (including the applicable amounts allocable to such owners from the Form 1042-S
chapter 4 exemption). If the claims are consistent but the issued to the hybrid entity.
withholding agent has not chosen to accept the multiple If an owner of a reverse hybrid entity claims treaty benefits
claims, or if the claims are inconsistent, a separate Form on a valid Form W-8BEN-E or W-8BEN (and chapter 4
1042-S must be filed for the person(s) being treated as the withholding does not apply with respect to the payment to the
recipient(s). reverse hybrid entity), the U.S. withholding agent should
issue a Form 1042-S for the portion of the payment allocable
Special instructions for U.S. trusts and estates. Report to each such owner treating the owner as the recipient, using
the entire amount of income subject to reporting, regardless the applicable recipient codes for the chapters 3 and 4 status
of estimates of distributable net income. codes, and report the reverse hybrid entity as the
intermediary in boxes 15a through 15i. In such a case, the
Payments Made to Persons Who Are Not
U.S. withholding agent must issue a Form 1042-S to the
Recipients reverse hybrid entity for the remainder of the payment
Disregarded entities and hybrid entities. If a U.S. treating such entity as the recipient and using the applicable
withholding agent makes a payment to a disregarded entity chapters 3 and 4 status codes. However, if chapter 4
that is not a hybrid entity making a treaty claim, and receives withholding applies with respect to the payment to the
a valid Form W-8BEN-E or W-8ECI from a foreign person that reverse hybrid entity, the U.S. withholding agent must instead
is the single owner of the disregarded entity, the withholding issue a Form 1042-S to the reverse hybrid entity for the entire
agent must file a Form 1042-S in the name of the foreign payment and withhold accordingly.
single owner. The TIN on the Form 1042-S, if required, must Example 6. WA, a withholding agent, makes a
be the foreign single owner's TIN. However, in box 13h, withholdable payment of interest to FP, a hybrid entity
include the GIIN of the disregarded entity provided in Part II organized in Country X. FP is treated as a partnership under
of Form W-8BEN-E if the owner is an FFI. the Internal Revenue Code but is treated as a company
Example 5. WA, a withholding agent, makes a resident in Country X for Country X purposes. WA has a
withholdable payment of interest to LLC, a foreign limited Form W-8BEN-E from FP on which it claims treaty benefits.
liability company that is not an FFI. LLC is wholly owned by WA also has a Form W-8IMY from FP that includes its
FC, a foreign corporation that is an excepted nonfinancial chapters 3 and 4 statuses and a W-8BEN-E from each of
foreign entity. LLC is treated as a disregarded entity. WA has FP's owners, FC1 and FC2, which certify that FC1 is a
a Form W-8BEN-E from FC on which it states that it is the participating FFI and FC2 is a nonparticipating FFI. The
beneficial owner of the income paid to LLC. WA reports the attached withholding statement allocates 80% of the
interest payment on Form 1042-S showing FC as the payment to FC1 and 20% of the payment to FC2. WA must

16 Instructions for Form 1042-S (2025)

- 17 -

Enlarge image

Page 17 of 42       Fileid: … orm-1042-s/2025/a/xml/cycle06/source                           11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

issue a Form 1042-S for 80% of the payment to FP as the           certificate (Form W-8 or W-9) or other valid appropriate 
recipient using recipient code 26 (hybrid entity making treaty    documentation from a recipient, the withholding agent must 
claim) as the chapter 3 status code, and leaving blank the        follow the appropriate presumption rules for that payment 
recipient code for the chapter 4 status code. WA must             which, if the payment is a withholdable payment, will 
withhold under chapter 4 on the remaining 20% of the              generally require the withholding agent to withhold 30% 
payment allocated to FC2 and issue a Form 1042-S to FC2           under chapter 4 because such payment is presumed made to 
as the recipient using recipient code 15 (corporation) as the     a nonparticipating FFI. See Regulations section 1.1471-3(f)
chapter 3 status code and recipient code 15                       (5). For this purpose, if the allocation information provided to 
(nonparticipating FFI) as the chapter 4 status code and must      the withholding agent indicates an allocation of more than 
report FP as the intermediary in boxes 15a through 15i.           100% of the payment, then no part of the payment should be 
                                                                  considered to be associated with a Form W-8, Form W-9, or 
Amounts paid to an NQI or a flow-through entity of with-
                                                                  other appropriate documentation. The Form 1042-S should 
holdable payments. If a U.S. withholding agent makes a 
                                                                  be completed by entering “Unknown Recipient” in box 13a 
payment to an NQI or a flow-through entity (other than a 
                                                                  and recipient code 21 (unknown recipient) as the chapter 3 
nonparticipating FFI) with respect to a withholdable payment, 
                                                                  status code and recipient code 29 (unknown recipient) as the 
it must complete a separate Form 1042-S for each recipient 
                                                                  chapter 4 status code. Also, the name, country code, 
on whose behalf the NQI or flow-through entity acts as 
indicated by its withholding statement and the documentation      address, TIN (if any), GIIN (if any), and status codes of the 
associated with its Form W-8IMY. If a payment is made             FFI should be entered in boxes 15a through 15i.
through tiers of NQIs or flow-through entities, the withholding   If a U.S. withholding agent makes a withholdable payment 
agent must nevertheless complete Form 1042-S for the              to an NQI or a flow-through entity that is a nonparticipating 
recipients to which the payments are remitted. A withholding      FFI, the withholding agent must treat the payments as made 
agent completing Form 1042-S for a recipient that receives a      to an unknown recipient regardless of whether it can reliably 
payment through an NQI or a flow-through entity must include      associate the payment, or any part of the payment, with a 
in boxes 15a through 15i of Form 1042-S the name, country         valid withholding certificate (Form W-8 or W-9) or other valid 
code, address, TIN (if any), GIIN (if any), and status codes of   appropriate documentation from a recipient (see Regulations 
the NQI or flow-through entity from whom the recipient            section 1.1471-3(d)(8)). The withholding agent should 
directly receives the payment.                                    complete a Form 1042-S showing “Unknown Recipient” in 
                                                                  box 13a and recipient code 21 (unknown recipient) as the 
If, however, a U.S. withholding agent makes withholdable 
                                                                  chapter 3 status code and recipient code 29 (unknown 
payments to an NQI or a flow-through entity that is a 
                                                                  recipient) as the chapter 4 status code. Also, the name, 
participating FFI or registered deemed-compliant FFI that is 
                                                                  country code, address, chapter 4 status code, and TIN (if 
allocable to a chapter 4 withholding rate pool as indicated by 
                                                                  any) of the nonparticipating FFI should be entered on Form 
the FFI’s withholding statement, the U.S. withholding agent 
                                                                  1042-S in boxes 15a through 15i.
should complete a separate Form 1042-S for each chapter 4 
reporting pool (that is, pool of recalcitrant account holders,    If, however, an NQI or a flow-through entity that is a 
pool of nonparticipating FFIs, or pool of payees that are U.S.    nonparticipating FFI provides documentation described in 
persons) treating the participating FFI or registered             Regulations section 1.1471-3(d)(8)(ii) to establish that the 
deemed-compliant FFI as the recipient and must include the        withholdable payment or a portion of the payment is 
GIIN and chapter 3 status code of the FFI and the applicable      beneficially owned by an exempt beneficial owner, then the 
chapter 4 reporting pool code as the chapter 4 status code. If    withholding agent should complete a Form 1042-S for each 
a payment is made through tiers of NQIs or flow-through           exempt beneficial owner showing chapter 4 exemption code 
entities that are participating FFIs or registered                15 (payee not subject to chapter 4 withholding); the exempt 
deemed-compliant FFIs, the withholding agent must                 beneficial owner as the recipient in box 13a; and the name, 
nevertheless complete Form 1042-S for each chapter 4              country code, address, chapter 4 status code, and TIN (if 
reporting pool to which the payments are allocated and must       any) of the nonparticipating FFI in boxes 15a through 15i. For 
report, as the recipient, the FFI from whom the recipients        any remaining portion of the payment, the withholding agent 
included in the chapter 4 reporting pool directly receive the     should complete a Form 1042-S to an unknown recipient as 
payment.                                                          described directly above.
                                                                  Pro-rata reporting to NQI. If the withholding agent has 
Example 7. WA, a withholding agent, makes a 
withholdable payment of interest to FFI1, a reporting Model 1     agreed that an NQI (other than a nonparticipating FFI) may 
                                                                  provide information allocating a payment to its account 
FFI. FFI1 provides WA with a valid Form W-8IMY with which it 
associates a withholding statement that allocates 80% of the      holders under the alternative procedure of Regulations 
                                                                  section 1.1441-1(e)(3)(iv)(D) (no later than February 14, 
payment to FFI2, a participating FFI, and 20% of the payment 
to a pool of nonparticipating FFIs. FFI1 also provides WA with    2026) and the NQI fails to allocate more than 10% of the 
                                                                  payment in a withholding rate pool to the specific recipients in 
FFI2's Form W-8IMY with which it associates a withholding 
statement that allocates 100% of the payment to recalcitrant      the pool or an applicable chapter 4 withholding rate pool, the 
                                                                  withholding agent must file a Form 1042-S for each recipient 
pool-no U.S. indicia. WA must complete a Form 1042-S for 
the interest allocated to a pool of nonparticipating FFIs with    in the pool on a pro-rata basis. The withholding agent must 
                                                                  check box 15 (pro-rata basis reporting) on each Form 
FFI1 as the recipient and must complete another Form 
1042-S for the interest allocated to a pool of recalcitrant       1042-S. For example, if there are four account holders in a 
                                                                  withholding rate pool that receives a $100 payment and the 
account holders—no U.S. indicia with FFI2 as the recipient.
                                                                  NQI fails to allocate more than $10 of the payment, the 
If a U.S. withholding agent makes a withholdable payment          withholding agent must file four Forms 1042-S, one for each 
to an NQI or a flow-through entity that is a participating FFI or account holder in the pool, showing $25 of the income to 
deemed-compliant FFI, and cannot reliably associate the           each and box 15 checked. If, instead, the NQI fails to timely 
payment, or any part of the payment, with a withholding           allocate 10% or less of the payment in a withholding rate pool 
statement, or to the extent required, a valid withholding         to the specific recipients in a pool, the withholding agent must 

Instructions for Form 1042-S (2025)                                                                                             17

- 18 -

Enlarge image

Page 18 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

file a Form 1042-S for each recipient for which it has withholding agent making a payment to an NQI that is subject
allocation information and report the unallocated part of the to withholding on a PTP distribution other than under section
payment on a Form 1042-S as made to an “unknown 1446 should generally report the NQI and the recipient of the
recipient.” In this case, the withholding agent does not check distribution on Form 1042-S in accordance with the
box 15 on any of the Forms 1042-S. requirements applicable to withholdable payments made to
Payments allocated, or presumed made, to U.S. NQIs (described earlier). In the case, of a PTP distribution
nonexempt recipients. You may be given Forms W-9 or paid to a flow-through entity, however, the withholding agent
other information regarding U.S. nonexempt recipients from should report the flow-through entity as the recipient for an
an NQI or a flow-through entity together with information amount subject to section 1446(a) unless it is a grantor trust
allocating all or a part of the payment to U.S. nonexempt (with the trust grantors or owners treated as the recipients). In
recipients. You must report income allocable to a U.S. either case, the U.S. withholding agent must provide a Form
nonexempt recipient on the appropriate Form 1099 and not 1042-S that is associated with the PTP distribution to the
on Form 1042-S, even though you are paying that income to extent that PTP information is required to be included on
an NQI or a flow-through entity. If, however, a participating Form 1042-S in accordance with Boxes 16a Through
FFI or registered deemed-compliant FFI provides a 16e—Payer's Name, TIN, GIIN, and Status Code, later, and
withholding statement allocating all or part of the payment to as described under Publicly Traded Partnerships (Sections
a chapter 4 withholding rate pool of U.S. payees along with 1446(a) and (f) Withholding Tax), earlier.
the certification provided on Form W-8IMY required for A U.S. withholding agent making a payment to an NQI of
reporting such pool (as described in Regulations section an amount realized subject to reporting for purposes of
1.1471-3(c)(3)(iii)(B)), you must report the income allocable section 1446(f) (including on a PTP distribution) should
to such pool on Form 1042-S. generally treat the recipient as an unknown recipient because
Example 8. FP is an NWP (flow-through entity) that is a section 1446(f) withholding applies to an NQI without regard
certified deemed-compliant FFI. FP receives from WA, a U.S. to the statuses of its account holders receiving the amount
withholding agent, a withholdable payment of interest realized. A single Form 1042-S may be issued to the NQI in
described by income code 01 (interest paid by U.S. this case regardless of the number of NQI account holders. If
obligors—general). FP has three partners, A, B, and C, all of the withholding agent agrees to report the NQI account
whom are individuals. FP provides WA with a Form W-8IMY holders on Form 1042-S, however, it may report the amount
certifying that it is transmitting Forms W-9 for U.S. nonexempt realized and withholding applied under section 1446(f) with
recipients and Forms W-8BEN from A and B and a Form W-9 respect to each NQI account holder on Form 1042-S. See the
from C, a U.S. nonexempt recipient. In addition, FP provides instructions for Form W-8IMY for the requirements for such
a complete withholding statement in association with its Form an agreement (including that the withholding agent issue a
W-8IMY that allocates the interest payments among A, B, recipient copy of the Form 1042-S to the NQI with respect to
and C. WA must file two Forms 1042-S, one each for A and each Form 1042-S issued to an NQI account holder for an
B, treating FP as the intermediary in boxes 15a through 15i. amount realized).
WA should also file a Form 1099-INT for C. A U.S. withholding agent making a payment to a
Example 9. The facts are the same as in Example 8, flow-through entity of an amount realized reportable on Form
except that FP does not provide any documentation from its 1042-S must report the flow-through entity as the recipient
partners. Because WA cannot reliably associate the except to the extent it is treated as a grantor trust (in which
withholdable payment of interest with documentation from a case the trust’s grantor or owner is the recipient).
payee, it must apply the presumption rules of Regulations
section 1.1471-3(f) to treat the interest as paid to a Amounts Paid by QIs
nonparticipating FFI. A Form 1042-S should be completed by In general. For purposes of chapter 4, a QI must complete a
entering “4” in box 3, “Unknown Recipient” in box 13a, Form 1042-S for payments withheld under chapter 4
recipient code 21 (unknown recipient) as the chapter 3 status determined in accordance with the income codes used to file
code, and recipient code 29 (unknown recipient) as the Form 1042-S. A QI that is a participating FFI or registered
chapter 4 status code. Also, the name, country code, deemed-compliant FFI may use chapter 4 pooled reporting
address, status codes, and TIN (if any) of FP should be codes 42 through 48 to allocate payments made to its
entered in boxes 15a through 15i. recalcitrant account holders, payees that are nonparticipating
Example 10. The facts are the same as in Example 9, FFIs, and payees that are U.S. persons. A QI should not use
except that FP is a participating FFI and provides WA with a chapter 4 reporting pool 49 (QI-recalcitrant pool—general) to
Form W-8IMY certifying that it is reporting its U.S. accounts report its accounts but may use it to report accounts
under chapter 4 and a withholding statement allocating 33% maintained by another QI. A QI that is an NFFE or FFI treated
of the payment to a pool of U.S. payees. With respect to the as deemed-compliant under an applicable IGA (as described
U.S. pool of payees, WA must file a Form 1042-S showing FP in Regulations section 1.1441-1(e)(5)(ii)(A)) may use
as the recipient in box 13a and include FP's GIIN, recipient chapter 4 reporting pool code 47 to report payments
code 08 as the chapter 3 status code (partnership other than allocable to a pool of nonparticipating FFIs. A QI may also
withholding foreign partnership, publicly traded partnership, use the chapter 4 pooled reporting codes to report payments
or partnership QDD), and recipient code 48 (U.S. payees allocable to account holders, payees, or owners of another
pool) as the chapter 4 status code. WA should enter “3” in participating FFI or registered deemed-compliant FFI that is
box 3 as the chapter indicator, leave boxes 3a and 3b blank, an NQI, NWP, or NWT, and it must provide its chapter 4
and enter exemption code 18 (U.S. payees of a participating withholding rate pools on its withholding statement. In such
FFI or registered deemed-compliant FFI) in box 4a, and case, the QI must include the NQI, NWP, or NWT as the
“00.00” in box 4b. recipient in box 13a and the applicable recipient code for
such entity as the chapter 3 status code. For payments
Amounts paid to an NQI or a flow-through entity of subject to chapter 3 withholding that are exempt from
amounts realized and PTP distributions. A U.S.

18 Instructions for Form 1042-S (2025)

- 19 -

Enlarge image

Page 19 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

chapter 4 withholding and made by the QI directly to foreign 1042-S will contain information for the recalcitrant pool
beneficial owners (or that are treated as paid directly to consisting of amounts paid to B. This Form 1042-S will show
beneficial owners), the QI may report on the basis of income code 06 (dividends paid by U.S.
chapter 3 reporting pools, in most cases. A QI may not report corporations-general) in box 1, code 12 (payee subjected to
on the basis of reporting pools in the circumstances chapter 4 withholding) in box 3a (chapter 3 exemption code),
described under Recipient-by-Recipient Reporting by QIs, “00.00” in box 3b (chapter 3 tax rate), “00” in box 4a
later. For payments not subject to chapter 4 withholding, a QI (chapter 4 exemption code), “30.00” in box 4b (chapter 4 tax
may use a single chapter 4 exemption code 15 (payee not rate), “recalcitrant pool—U.S. indicia” or similar designation in
subject to chapter 4 withholding) and a single chapter 3 box 13a (recipient's name), chapter 4 recipient code 43
reporting pool code 27 (withholding rate pool—general) as (recalcitrant pool—U.S. indicia) as the chapter 4 status code
the chapter 3 status code for all reporting pools, except for in box 13g, and a blank chapter 3 status code in box 13f.
amounts paid to foreign tax-exempt recipients for which
Under the terms of its QI agreement with the IRS, a
chapter 3 reporting pool code 28 should be used. Note,
QI that is an FFI may be required to report the
however, that a QI should use recipient code 28 only for CAUTION!
amounts paid to U.S. nonexempt recipients on Form
pooled account holders that have claimed an exemption
1099 or Form 8966 using the name, address, and TIN of the
based on their tax-exempt status and not some other
payee to the extent those items of information are known.
exemption (tax treaty or other Internal Revenue Code
These amounts must be reported on Form 1042-S if
section). If a QI uses a chapter 3 pooled reporting code
allocated to a chapter 4 withholding rate pool of U.S. payees.
(because chapter 4 withholding does not apply and the QI is
not allocating the payment to a U.S. pool of payees), it should A QI acting as a QDD must separately report on Forms
leave blank the recipient code for the chapter 4 status code. 1042-S payments that it makes in its QDD capacity. The QI
Example 11. QI, a qualified intermediary and should report the name of the QDD that makes the payment
participating FFI, has four direct account holders, A and B, as the withholding agent in box 12d (following the naming
foreign individuals, and X and Y, foreign corporations. The protocol used for applying to be a QDD) and should use
withholdable payments made to these direct account holders withholding agent code 35 as the chapter 3 status code.
are exempt from chapter 4 withholding because of the Similarly, if the QDD is a partnership or branch of a
chapter 4 status of each account holder. A and X are partnership, that QDD must separately report allocations to
residents of a country with which the United States has an its partners of QDD items on Forms 1042-S, entering the
income tax treaty and have provided documentation that name of the QDD as the withholding agent in box 12d
establishes that they are entitled to a lower treaty rate of 15% (following the naming protocol).
on withholding of dividends from U.S. sources. B and Y are
not residents of a treaty country and are subject to 30% A QI acting as a QDD with respect to a payment may
withholding on dividends. QI receives U.S. source dividends ! only use chapter 3 pooled reporting codes 27 and
on behalf of its four customers. QI must file one Form 1042-S CAUTION 28.
for the 15% withholding rate pool. This Form 1042-S must
show income code 06 (dividends paid by U.S. Amounts Paid to PAIs
corporations—general) in box 1, “00” in box 3a (chapter 3 In most cases, a QI must report payments subject to
exemption code), “15.00” in box 3b (chapter 3 tax rate), withholding under chapter 3 or 4 made to each PAI (defined
chapter 4 exemption code 15 (payee not subject to chapter 4 under Definitions, earlier) as if the PAI's direct account
withholding) in box 4a, “00.00” in box 4b (chapter 4 tax rate), holders were its own. For purposes of chapter 4, a QI that is a
“Withholding rate pool” in box 13a (recipient's name), participating FFI, a registered deemed-compliant FFI, or an
chapter 3 reporting pool code 27 (withholding rate FFI treated as deemed-compliant under an applicable IGA
pool—general) as the chapter 3 status code, and a blank (as described in Regulations section 1.1441-1(e)(5)(ii)(A))
chapter 4 status code. QI must also file one Form 1042-S for may use chapter 4 reporting pool code 47 to allocate
the 30% withholding rate pool that contains the same payments made to the PAI's payees that are nonparticipating
information as the Form 1042-S filed for the 15% withholding FFIs, and may treat the PAI as the recipient on Form 1042-S
rate pool, except that it will show “30.00” in box 3b (chapter 3 with respect to each such pool. For chapter 3 purposes, if the
tax rate). payment is made directly by the PAI to the recipient, the QI
Example 12. The facts are the same as in Example 11, may report the payment on a pooled basis. A QI may not,
except that Y is an organization that has tax-exempt status in however, report on a pooled basis as described in the
the United States and in the country in which it is located, preceding sentence when acting as a QDD because, under
and B is a recalcitrant account holder with U.S. indicia. QI the QI agreement, a QI may not enter into a private
must file three Forms 1042-S. One Form 1042-S (for amounts arrangement with any account holder for which it acts as a
allocable to A and X) will contain the same information as in QDD. A separate Form 1042-S is required for each
Example 11. The second Form 1042-S (for amounts withholding rate pool of each PAI (unless the QI is acting as a
allocable to Y) will contain information for the withholding rate QDD with respect to the payment). However, the QI must
pool consisting of the amounts paid to Y. This Form 1042-S include the name and address of the PAI and use pooled
will show income code 06 (dividends paid by U.S. reporting code 29 (PAI withholding rate pool—general) or 30
corporations—general) in box 1, exemption code 02 (exempt (PAI withholding rate pool—exempt organization) as the
under IRC) in box 3a, “00.00” in box 3b (chapter 3 tax rate), chapter 3 status code. If the PAI is providing recipient
chapter 4 exemption code 15 (payee not subject to chapter 4 information from an NQI or a flow-through entity, the QI may
withholding) in box 4a, “00.00” in box 4b (chapter 4 tax rate), not report the payments on a pooled basis for chapter 3
“Zero rate withholding pool-exempt organizations” or similar purposes. Instead, it must follow the same procedures as a
designation in box 13a (recipient's name), chapter 3 code 28 U.S. withholding agent making a payment to an NQI or a
(withholding rate pool—exempt organization) in box 13f, and flow-through entity.
a blank chapter 4 status code in box 13g. The third Form

Instructions for Form 1042-S (2025) 19

- 20 -

Enlarge image

Page 20 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Example 13. QI, a qualified intermediary, pays U.S. receives the payment from the NQI. A QI that is completing
source dividends to direct account holders that are foreign Form 1042-S for a recipient that receives a payment through
persons and beneficial owners. It also pays a part of the U.S. an NQI must include in boxes 15a through 15i the name,
source dividends to two private arrangement intermediaries, country code, address, TIN (if any), GIIN (if any), and status
PAI1 and PAI2. The PAIs pay the dividends they receive from codes of the NQI from whom the recipient directly receives
QI to foreign persons that are beneficial owners and direct the payment. In the case of an NQI that is a participating FFI
account holders of PAI1 or PAI2. All payees are exempt from or registered deemed-compliant FFI, the QI must complete a
chapter 4 withholding based on their respective chapter 4 Form 1042-S for the chapter 4 withholding rate pool of the
statuses and the dividends paid are subject to a 15% rate of NQI provided in a withholding statement associated with its
withholding. QI must file a Form 1042-S for the dividends Form W-8IMY and must report the NQI as the recipient. In
paid to its own direct account holders that are beneficial such a case, the QI must include the name and address of
owners. QI must also file two Forms 1042-S, one for the the NQI as the recipient and use chapter 4 pool reporting
dividends paid to the direct account holders of each of PAI1 codes 42 through 48 as the chapter 4 status code, and
and PAI2. Each of the Forms 1042-S that QI files for chapter 3 status code 25 (nonqualified intermediary). If the
payments made to PAI1 and PAI2 must contain the name and NQI fails to provide sufficient allocation information with
address of PAI1 or PAI2, recipient code 29 (PAI withholding respect to a withholdable payment, the QI must complete a
rate pool—general) as the chapter 3 status code, and a blank Form 1042-S with the recipient as “Unknown Recipient” using
chapter 4 status code, and should use chapter 4 exemption chapter 4 status code 29 (unknown recipient) and must
code 15 (payee not subject to chapter 4 withholding) in include the NQI's information in boxes 15a through 15i.
box 4a. Example 14. QI, a qualified intermediary, has NQI, a
nonqualified intermediary that is a participating FFI, as an
Amounts Paid by QIs to Certain Partnerships account holder. NQI has two account holders, A and B, both
and Trusts recalcitrant account holders with U.S. indicia who receive a
A QI that is applying the special pool reporting allowance withholdable payment of U.S. source dividends from QI. NQI
provided in the QI agreement for certain partnerships or provides QI with a valid Form W-8IMY and a complete
trusts (Agency Option) must file separate Forms 1042-S withholding statement that allocates the dividends paid to
reflecting reporting pools for each partnership or trust that NQI to recalcitrant pool—U.S. indicia for both A and B. QI
has provided reporting pool information in its withholding must complete one Form 1042-S reporting NQI as the
statement. A QDD cannot use the Agency Option. For recipient and using reporting pool code 43 (recalcitrant
purposes of chapter 4, a QI that is an FFI may use chapter 4 pool—U.S. indicia) as the chapter 4 status code.
reporting pool code 47 to allocate payments made to the Example 15. QI has NQI, a nonqualified intermediary that
partnership’s or trust's payees that are nonparticipating FFIs is a reporting Model 2 FFI, as an account holder. NQI has two
and should report the partnership or trust as the recipient on account holders, A and B, who receive a withholdable
Form 1042-S. For chapter 3 purposes, if the payment is made payment of U.S. source dividends from QI. A is a
directly by the partnership or trust to the recipient, the QI may nonparticipating FFI. NQI treats B as a nonconsenting U.S.
use reporting pool code 31 (agency withholding rate account under the applicable IGA and is not required to
pool—general) or 32 (agency withholding rate pool—exempt withhold on payments to B under chapter 4. NQI provides QI
organization) as the chapter 3 status code (unless the QI is with a valid Form W-8IMY and a complete withholding
acting as a QDD with respect to the payment). However, to statement that allocates 50% of the dividends paid to A and
the extent required in the QI agreement, the QI must file 50% to B. NQI designates B as an individual exempt from
separate Forms 1042-S for partners, beneficiaries, or owners withholding under an IGA but cannot include B in a chapter 4
of such partnership or trust that are indirect partners, withholding rate pool of U.S. payees because the payment is
beneficiaries, or owners, and for direct partners, subject to chapter 3 withholding and, under the presumption
beneficiaries, or owners of such partnership or trust that are rules of Regulations section 1.1441-1(b)(3), the payment is
intermediaries or flow-through entities. presumed made to an unknown, undocumented foreign
payee. QI must complete two Forms 1042-S. One Form
Recipient-by-Recipient Reporting by QIs 1042-S must show NQI as the recipient and use reporting
If a QI is not permitted to report on the basis of reporting pool code 47 (nonparticipating FFI pool). The second Form
pools, it must follow the same rules that apply to a U.S. 1042-S must show the recipient as “Unknown Recipient,”
withholding agent. For chapter 3 purposes, a QI may not NQI's information in boxes 15a through 15i, chapter 4
report the following payments on a reporting pool basis, but exemption code 19 (exempt from withholding under IGA),
rather must complete Form 1042-S for each appropriate chapter 4 status code 34 (nonconsenting U.S. account),
recipient and must provide the applicable chapter 4 chapter 3 status code 21 (unknown recipient), and 30%
exemption code. withholding under chapter 3 for the payment allocated to B as
Payments made by QIs to another QI, QDD, QSL, WP, or a presumed foreign person under chapter 3.
WT. The QI must complete a Form 1042-S treating the other Payments made by QIs to a flow-through entity. The QI
QI, QDD (when a QI is acting as a QDD with respect to a must complete a Form 1042-S for each recipient who
payment), QSL, WP, or WT as the recipient. A QI must not receives the payment from the flow-through entity for
treat a QI as a recipient, however, when the other QI is acting purposes of chapters 3 and 4. A QI that is completing a Form
as a disclosing QI. See Payment to QI of PTP distributions or 1042-S for a recipient that receives a payment through a
amounts realized, earlier, for information on reporting of PTP flow-through entity must include in boxes 15a through 15i the
distributions and amounts realized paid to disclosing QIs. name, country code, address, TIN (if any), GIIN (if any), and
Payments made to an NQI (including an NQI that is an status codes of the flow-through entity from which the
account holder of a PAI). For chapter 3 purposes, the QI recipient directly receives the payment.
must complete a Form 1042-S for each recipient who

20 Instructions for Form 1042-S (2025)

- 21 -

Enlarge image

Page 21 of 42     Fileid: … orm-1042-s/2025/a/xml/cycle06/source                                11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

For chapter 4 purposes and in the case of a flow-through         the basis of chapter 3 reporting pools and file a separate 
entity that is a participating FFI or registered                 Form 1042-S for each reporting pool. For payments not 
deemed-compliant FFI (other than a WP or WT), the QI must        subject to chapter 4 withholding, a WP or WT may use a 
complete a Form 1042-S for each chapter 4 withholding rate       single chapter 4 exemption code 15 (payee not subject to 
pool provided in the withholding statement associated with       chapter 4 withholding) and a single chapter 3 reporting pool 
the Form W-8IMY of the flow-through entity. The QI must          code 27 (withholding rate pool—general) as the chapter 3 
include the name, address, and GIIN of the flow-through          status code for all chapter 3 reporting pools, except for 
entity as the recipient and the applicable chapter 3 status      amounts paid to foreign tax-exempt recipients for which a 
code for the flow-through entity and use pooled reporting        separate recipient code 28 must be used. For this purpose, a 
codes 42 through 48 as the chapter 4 status code.                foreign tax-exempt recipient includes any organization that is 
Example 16.     QI, a qualified intermediary, has FP, a          not subject to withholding and is not liable to tax in its country 
nonwithholding foreign partnership that is a registered          of residence because it is a charitable organization, pension 
deemed-compliant FFI, as an account holder. QI pays              fund, or foreign government. See the WP and WT 
interest that is a withholdable payment described by income      agreements for when a WP and WT can pool report 
code 01 (interest paid by U.S. obligors—general) to FP. FP       payments to an indirect partner, a beneficiary, or an owner. 
has three partners, A, B, and C, all of whom are exempt from     See section 9 of the WP or WT agreement.
withholding under chapter 4 based on their respective 
                                                                 Amounts Paid by NQIs and 
chapter 4 statuses. FP provides QI with a Form W-8IMY with 
which it associates the Forms W-8BEN from each of A, B,          Flow-Through Entities
and C. In addition, FP provides a complete withholding           An NQI and a flow-through entity are withholding agents and 
statement in association with its Form W-8IMY that allocates     must file Forms 1042-S for amounts paid to recipients. 
the interest payments among A, B, and C. QI must file three      However, an NQI or a flow-through entity is not required to file 
Forms 1042-S, one each for A, B, and C. The Forms 1042-S         Form 1042-S if it is not required to file Form 1042-S under the 
must show information relating to FP in boxes 15a through        Multiple Withholding Agent Rule, later. An NQI or a 
15i along with the chapters 3 and 4 status codes and             flow-through entity may report payments made to recipients 
chapter 4 exemption code 15 (payee not subject to chapter 4      to the extent it has failed to provide to another withholding 
withholding) for A, B, and C.                                    agent the appropriate documentation and complete 
    See section 8 of the 2023 QI agreement in Rev. Proc.         withholding statement for either chapter 3 or 4 purposes or 
TIP 2022-43 for information on Form 1042-S reporting             when an NQI receives a payment of an amount realized 
    requirements when QIs make payments of PTP                   subject to section 1446(f) withholding from a broker that does 
distributions or amounts realized, or when a QI acting as a      not agree to report on Form 1042-S the NQI account holders 
QDD is a partnership required to report on Form 1042-S with      receiving the payment. See the instructions for Form W-8IMY 
respect to its foreign partners. For when a QI pays a PTP        for the requirements for such an agreement. If the NQI or 
distribution or amount realized to a partner through more than   flow-through entity chooses to or must file Form 1042-S, as 
one disclosing QI and the QI is required to issue a Form         described above, the NQI or flow-through entity must also file 
1042-S under section 8 of the 2023 QI agreement to report        Form 1042 and, if applicable, attach the Form 1042-S it 
the payment, see Payment to QI of PTP distributions or           received from the withholding agent to establish any credit for 
amounts realized, earlier, for the disclosing QI to which the QI amounts withheld by the withholding agent. See the 
is required to issue a recipient copy of Form 1042-S.            Instructions for Form 1042.
                                                                 If another withholding agent has withheld tax on an 
Amounts Paid by WPs and WTs                                      amount that should have been exempt (for example, where 
                                                                 the withholding agent applied the presumption rules because 
In general. For chapter 4 purposes, payments that are            it did not receive proper documentation or other required 
made by a WP or WT that is a participating FFI or a              information from the NQI or flow-through entity), and the 
registered deemed-compliant FFI directly to its partners,        payee or beneficial owner will make a claim for refund, the 
owners, or beneficiaries that are recalcitrant account holders,  NQI or flow-through entity must report on Form 1042-S the 
payees that are nonparticipating FFIs, and payees that are       correct tax rate and the combined amount of U.S. federal tax 
U.S. persons may be reported on the basis of chapter 4           withheld with respect to all recipients and should enter the 
reporting pools. A WP or WT may also use the chapter 4           applicable chapters 3 and 4 exemption codes.
pooled reporting codes to report payments allocable to 
account holders, payees, or owners of another participating      If another withholding agent underwithholds, regardless of 
FFI or registered deemed-compliant FFI that is an NQI, NWP,      whether it received proper documentation from the NQI or 
or NWT and provides its chapter 4 withholding rate pools on      flow-through entity, the NQI or flow-through entity must 
its withholding statement when the WP or WT applies section      withhold additional amounts to bring the total withholding to 
9.03 of its agreement to such entity. In such case, the WP or    the correct amount.
WT must include the NQI, NWP, or NWT as the recipient in             If an NQI receives an amount realized withheld on 
box 13a. If a WP or WT has not made a pooled reporting           TIP under section 1446(f), it may issue Forms 1042-S to 
election for chapter 3 purposes, a WP or WT must file a              report the payment and withholding even if the 
separate Form 1042-S for each direct partner, beneficiary, or    account holder is a U.S person.
owner that is exempt from chapter 4 withholding and to whom 
the WP or WT distributes, or in whose distributive share is 
included, an amount subject to withholding under chapter 3,      Specified Federal Procurement Payments Made 
in the same manner as a U.S. withholding agent. However, if      to Foreign Persons
the WP or WT has made a pooled reporting election in its WP      Section 5000C imposes a 2% tax on any foreign person that 
or WT agreement, the WP or WT may instead report                 receives a specified federal procurement payment. A 
payments to such direct partners, beneficiaries, or owners on    specified federal procurement payment is a payment made to 

Instructions for Form 1042-S (2025)                                                                                            21

- 22 -

Enlarge image

Page 22 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

a foreign person pursuant to a contract with the U.S. a 25% interest in the securities. NQI has furnished WA with a
Government for (1) the provision of goods that are Form W-8IMY to which it certifies its status as a participating
manufactured or produced in a country that does not have an FFI and has attached Forms W-8BEN from A and B. NQI's
international procurement agreement with the United States, Form W-8IMY contains an attachment stating that 25% of the
or (2) the provision of services in a country that does not securities are allocable to each of A and B and 50% to a pool
have an international procurement agreement with the United of recalcitrant account holders with U.S. indicia. WA pays
States. $100 of interest during the calendar year. WA treats the $25
of interest allocable to A and the $25 of interest allocable to B
For purposes of section 5000C, a payer of a specified as portfolio interest and completes Forms 1042-S for A and
federal procurement payment to a foreign person must for B as the recipients. WA includes information relating to
complete a Form 1042-S for payments withheld upon in the NQI in boxes 15a through 15i on the Forms 1042-S for A and
name of the foreign person. Use income code 44 to report B. WA subjects the remaining $50 of interest to 30%
payments subject to withholding under section 5000C. Box 2 withholding under chapter 4 and reports the interest on a
should include the amount of the specified federal Form 1042-S by treating NQI as the recipient in box 13a and
procurement payments subject to withholding, and box 7 uses chapter 3 status code 25 (nonqualified intermediary),
should include the amount of tax withheld under section chapter 4 status code 43 (recalcitrant pool—U.S. indicia),
5000C. “30.00” in box 4b (chapter 4 tax rate), and $15 as the amount
If you are reporting tax withheld under section 5000C, withheld in boxes 7 and 10. Under the multiple withholding
enter “3” in box 3 as if the tax were a chapter 3 tax, enter “00” agent rule, NQI is not required to file a Form 1042-S, but must
in box 3a, and report the tax withheld in box 7. You do not file a Form 1042-S if, for example, C and D seek to make a
need to complete box 4a, box 4b, or any box for a chapter 3 claim for refund and NQI has not filed a collective refund
or 4 status code. In boxes 13a through 13d, include the name claim on behalf of C and D for the tax withheld under
and the address of the foreign person withheld upon. If chapter 4 on the payment (see Regulations section
known, include the TIN (if any) in box 13e. 1.1471-4(h)).
Example 18. WA, a U.S. withholding agent, makes a
Multiple Withholding Agent Rule $100 dividend payment that is a withholdable payment to a
A withholding agent is not required to file Form 1042-S if a foreign bank (NQI) that is a participating FFI and acts as a
return is filed by another withholding agent reporting the nonqualified intermediary. NQI receives the payment on
same amount and the withholding agent has withheld behalf of A, documented as a foreign individual exempt from
correctly. chapter 4 withholding and a resident of a treaty country who
The multiple withholding agent rule does not relieve is entitled to a 15% rate of withholding under chapter 3, and
withholding agents from Form 1042-S reporting responsibility B, documented as a foreign individual exempt from chapter 4
in the following circumstances. withholding and a resident of a country that does not have a
tax treaty with the United States and who is subject to 30%
• Any withholding agent making a payment to a QI, QSL, withholding under chapter 3. NQI provides WA with its Form
WP, or WT must report that payment as made to the QI, QSL, W-8IMY that certifies its status as a participating FFI to which
WP, or WT. it associates the Forms W-8BEN from both A and B and a
• Any withholding agent making a payment to a U.S. branch complete withholding statement that allocates 50% of the
treated as a U.S. person must report the payment as made to dividend to A and 50% to B. A's Form W-8BEN claims a 15%
that branch. treaty rate of withholding. B's Form W-8BEN does not claim a
• Any withholding agent that withholds an amount from a reduced rate of withholding. WA, however, mistakenly
payment under chapter 3 or 4 must report that amount to the withholds only 15%, $15, from the entire $100 payment. WA
recipient from whom it was withheld. completes a Form 1042-S for each A and B as the recipients,
showing on each form $50 of dividends in box 2, a
Furthermore, the multiple withholding agent rule does not
withholding rate of “15.00” in box 3b (chapter 3 tax rate), and
relieve the following from Form 1042-S reporting
$7.50 as the amount withheld in boxes 7 and 10. Under the
responsibility.
multiple withholding agent rule, NQI is not required to file a
• Any QI, WP, or WT required to report an amount to a
Form 1042-S for A. However, because NQI knows (or should
chapter 4 withholding rate pool or chapter 3 withholding rate
know) that B is subject to a 30% rate of withholding, and
pool.
assuming it knows that WA only withheld 15%, the multiple
• An NQI or a flow-through entity that knows, or has reason
withholding agent rule does not apply to the dividend paid to
to know, that the correct amount has not been withheld by
B, and NQI must withhold an additional 15% from the
another withholding agent.
payment to B. NQI must then file a Form 1042-S for B
Under the multiple withholding agent rule, a withholding showing $50 of dividends in box 2, “00” in box 3a (chapter 3
agent reporting amounts withheld by another withholding exemption code), “30.00” in box 3b (the correct chapter 3 tax
agent must use box 8 (tax withheld by other agents) to report rate), $7.50 withheld by NQI in box 7, $7.50 withheld by WA
such amounts and must provide the name and EIN of the in box 8, and $15 in box 10 (the combined amount withheld).
withholding agent that withheld in boxes 14a and 14b NQI must also enter chapter 4 exemption code 15 (payee not
(Primary Withholding Agent's Name and EIN). See the subject to chapter 4 withholding) in box 4a and “00.00” in
instructions for boxes 14a and 14b, later. box 4b (chapter 4 tax rate). See the instructions for box 3b,
Example 17. NQI, a foreign bank that is a participating later.

FFI, acts as a nonqualified intermediary for four different Penalties
foreign persons (A, B, C, and D) who own securities from
which they receive interest that is a withholdable payment. The following penalties apply to the person required to file
The interest is paid by a U.S. withholding agent (WA) as Form 1042-S. The penalties apply to both paper filers and
custodian of the securities for NQI. A, B, C, and D each own electronic filers.

22 Instructions for Form 1042-S (2025)

- 23 -

Enlarge image

Page 23 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Late filing of correct Form 1042-S. A penalty may be • If the amount reported in box 2 is not subject to chapter 4
imposed for failure to file each correct and complete Form withholding or is not a withholdable payment, you must enter
1042-S when due (including extensions), unless you can “00.00” in box 4b and provide the applicable exemption code
show that the failure was due to reasonable cause and not in box 4a.
willful neglect. The penalty, based on when you file a correct • If the amount reported in box 2 is a withholdable payment
Form 1042-S, is the following. and an amount subject to chapter 3 withholding and the tax
• $60 per Form 1042-S if you correctly file within 30 days rate in box 4b is 00.00, you must enter information in boxes
after the required filing date; the maximum penalty is 3a and 3b. If the rate entered in box 4b is 30.00, you may
$683,000 per year ($239,000 for a small business). A small enter information in boxes 3a and 3b.
business, for this purpose, is defined as having average • If you are a QI, WP, or WT that is pool reporting for its
annual gross receipts of $5 million or less for the 3 most direct account holders only, either a chapter 3 status code
recent tax years (or for the period of its existence, if shorter) (box 13f) or chapter 4 status code (box 13g) is required.
ending before the calendar year in which the Forms 1042-S • If the recipient in box 13 or the entity in box 15 is a
are due. participating FFI, registered deemed-compliant FFI,
• $130 per Form 1042-S if you correctly file more than 30 sponsored FFI, direct reporting NFFE, or sponsored direct
days after the due date but by August 1; the maximum reporting NFFE, you must enter the entity's GIIN or the GIIN
penalty is $2,049,000 per year ($683,000 for a small of the sponsoring entity in box 13h or 15e (to the extent that
business). you may rely on a sponsored entity's GIIN under the
• $340 per Form 1042-S if you file after August 1 or you do chapter 4 regulations or an applicable IGA for withholding
not file correct Forms 1042-S; the maximum penalty is purposes).
$4,098,500 per year ($1,366,000 for a small business). • Use only income, status, and exemption codes specifically
listed in these instructions.
If you intentionally disregard the requirement to report Use only tax rates that are allowed by statute, regulations,
•
correct information, the penalty per Form 1042-S is increased or treaty. Do not attempt to “blend” rates. Instead, if
to the greater of $680 or 10% of the total amount of items necessary, submit multiple Forms 1042-S to show changes in
required to be reported, with no maximum penalty. tax rate. See the Valid Tax Rate Table.
Failure to furnish correct Form 1042-S to recipient. If All information you enter when reporting the payment must
you fail to provide Forms 1042-S to recipients and cannot correctly reflect the intent of the statute and regulations. In
show reasonable cause, a penalty of up to $340 may be most cases, you should rely on the withholding
imposed for each failure to furnish Form 1042-S to the documentation you have collected (Form W-8 series, Form
recipient when due. The penalty may also be imposed for 8233, etc.) to complete your Form 1042-S submissions.
failure to include all required information or for furnishing
incorrect information on Form 1042-S. The maximum penalty Also note the following.
is $4,098,500 ($1,366,000 for a small business) for all failures • The gross income you report in box 2 cannot be zero.
to furnish correct recipient statements during a calendar year. • The income code you report in box 1 must correctly reflect
If you provide the correct statement on or before August 1, the type of income you pay to the recipient.
reduced penalties similar to those for failing to file a correct • The withholding agent's name, address, chapters 3 and 4
Form 1042-S with the IRS may be imposed. See Late filing of status codes, EIN, QI-EIN, WP-EIN, WT-EIN, and GIIN (if
correct Form 1042-S, earlier. If you intentionally disregard the any) must be reported in boxes 12a through 12i.
requirement to report correct information, each $340 penalty • The recipient's name, country code, address, U.S. TIN (if
is increased to the greater of $680 or 10% of the total amount any), and GIIN (if any) must be reported in boxes 13a through
of items required to be reported, with no maximum penalty. 13e and 13h. In most cases, you must report a foreign
address. See the instructions for box 13, later.
Failure to file electronically. If you are required to file • In the case of joint owners, Form 1042-S can only list one
electronically but fail to do so, and you do not have an of the owners as the recipient in box 13a. Form 1042-S must
approved waiver on record, penalties may apply unless you not be completed with more than one of the joint owners as
establish reasonable cause for your failure. the recipient.
Avoid Common Errors • For direct account holders, you must report the recipient's
account number in box 13k. You may also be required to
To ensure that your Forms 1042-S can be correctly report the recipient's FTIN in box 13i, a limitation on benefits
processed, be sure that you do the following. (LOB) code (for an entity claiming treaty benefits) in box 13j,
• Carefully read the information provided in Pub. 515 and and the recipient's date of birth in box 13l (see the
these instructions. instructions for box 13j and box 13l, later).
• Comply with the requirements in Pub. 1187 if you are an • The exemption code you report in box 3a must correctly
electronic filer. identify the proper tax status for the type of income you pay to
• Complete all required fields. At a minimum, you must the recipient. The exemption code you report in box 4a must
provide your unique form identifier at the top of the form as correctly identify the proper tax status for the type of income
well as the information requested in boxes 1, 2, 3, 7a, 12a, you pay to the recipient or if exemption code 15 is used
12b, 12c, 12d, 12f, 12h, 12i, 13a, 13b, 13c, and 13d. Other (payee not subject to chapter 4 withholding), the chapter 4
boxes must be completed if the nature of the payment status code of the recipient must correctly reflect this
requires it. exemption.
• If the amount reported in box 2 is a withholdable payment, • When reporting to Unknown Recipients, ensure that 30%
you must also enter information in boxes 4a, 4b, and 13g. If tax is withheld for amounts subject to chapter 3 or 4
the amount reported in box 2 is an amount subject to withholding, remitted to the IRS, and correctly reported on
chapter 3 withholding, you must enter information in boxes Form 1042-S. In such cases, the recipient's name should be
12b, 12c, and 13f. "Unknown Recipient." The recipient's chapter 3 and 4 status
codes should also reflect "Unknown Recipient," and the

Instructions for Form 1042-S (2025) 23

- 24 -

Enlarge image

Page 24 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

recipient country should be left blank. Do not use country the box provided on the form (using “1” for the first
code "UC" to indicate unknown country. Only use country amendment and increasing sequentially for each subsequent
code "UC" when the recipient country is Curacao. amendment).
• Foreign source income is generally not required to be
reported on Form 1042-S. As a result, exemption code 03 Box 1—Income Code
(income is not from U.S. sources) should be used for All filers must enter the appropriate two-digit income code
reporting income only in limited circumstances (for example, from the list in Appendix A, later. Use the income code that is
when withholding is applied in error). See Regulations the most specific. See Pub. 515 for further explanation of the
section 1.1461-1(c)(2) for when reporting on Form 1042-S is income codes. Below are examples on how to use some of
required. the income codes.
Note. If you use exemption code 04 (exempt under tax 1. Use code 06 for dividends, including any deemed
treaty), the country code that you report in box 13b must be a dividends (such as deemed dividends arising under section
valid treaty country. Countries with which the United States 305(c)). However, use other codes for dividends (including
has a tax treaty are listed at IRS.gov/Businesses/ deemed dividends) paid on actively traded securities and for
International-Businesses/United-States-Income-Tax-Treaties- dividend equivalents.
A-to-Z.
2. Use code 09 for the following types of capital gain.
You, the withholding agent, are liable for the tax if you a. Gains on disposal of timber, coal, or domestic iron ore
! know, or should have known, that underwithholding with a retained economic interest, unless an election is made
CAUTION on a payment has occurred.
to treat those gains as income effectively connected with a
U.S. trade or business.
b. Gains on contingent payments received from the sale
Specific Instructions for or exchange after October 4, 1966, of patents, copyrights,
Withholding Agents secret processes and formulas, goodwill, trademarks, trade
brands, franchises, and other like property.
All amounts must be reported in U.S. dollars.
c. Gains on certain transfers of all substantial rights to, or
CAUTION! an undivided interest in, patents if the transfers were made
before October 5, 1966.
Rounding Off to Whole Dollars d. Certain gains from the sale or exchange of OID
You must round off cents to whole dollars. To round off obligations issued after March 31, 1972.
amounts to the nearest whole dollar, drop amounts under 50 3. Use code 17 for payments for independent personal
cents and increase amounts from 50 to 99 cents to the next services performed by a foreign person (including payments
dollar. For example, $1.39 becomes $1 and $2.50 becomes made to an entity). This includes payments that are subject to
$3. If you have to add two or more amounts to figure the the business profits article of a treaty.
amount to enter on a line, include cents when adding and 4. Use code 29 (deposit interest) if you are paying bank
only round off the total. deposit interest, not code 01 (interest paid by U.S.
obligors—general).
Unique Form Identifier
A withholding agent must provide a unique form identifier on 5. Use code 24 (qualified investment entity (QIE)
each Form 1042-S that it files in the box provided at the top of distributions of capital gains) for distributions of capital gains
the form. The unique form identifier must: from a QIE. Use code 36 (capital gains distributions) for
• Be numeric (for example, 1234567891), capital gain distributions (dividends) paid or credited by
• Be exactly 10 digits, and mutual funds (or other RICs). Include long-term and
• Not be the recipient's U.S. TIN or FTIN. short-term capital gain dividends (use exemption code 02
(exempt under IRC) in box 3a).
If a withholding agent is filing an amended Form 1042-S, it
must include the same unique form identifier that was Note. Exempt-interest dividends and interest-related
reported by the withholding agent on the original Form dividends should be reported under income code 01 (interest
1042-S that is being amended. The unique form identifier will paid by U.S. obligors—general) (use exemption code 02
be used to identify which information return is being (exempt under IRC) in box 3a).
corrected or amended when multiple information returns are 6. Use code 28 for gambling winnings. These are
filed by a withholding agent with respect to the same proceeds from a game other than blackjack, baccarat, craps,
recipient. The identifying number must be unique to each roulette, or big-6 wheel. For more information, see Pub. 515.
original Form 1042-S filed for the current year. The identifying 7. Use code 33, 34, 35, 53, or 54 for all substitute
number can be used on a new original form in a subsequent payment transactions. For more information, see Regulations
year. sections 1.861-2(a)(7) and 1.861-3(a)(6). For payments of
interest or substitute interest made by a withholding agent to
Amended Checkbox a QI that assumes primary withholding responsibilities for
See Amended Forms, later. substitute interest, the withholding agent and the QI should
use code 33 or 54. For payments of substitute dividends, a
Amendment Number withholding agent should use code 34 or 53. See Rev. Proc.
If you are filing an amended Form 1042-S, you must provide 2022-43 for more information on when a QI assumes primary
an amendment number. The amendment number must be withholding responsibilities for substitute interest or dividend
numeric and the length must be exactly one digit. Each time equivalents.
that you amend the same form (as determined by the unique
form identifier), you must provide the amendment number in

24 Instructions for Form 1042-S (2025)

- 25 -

Enlarge image

Page 25 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

8. Use code 37 (return of capital) for a nondividend Regulations section 1.1441-6(c)(2) and you have reduced the
distribution. This is a distribution that is not paid out of the rate of withholding under an income tax treaty without the
earnings and profits of a corporation. It represents a recipient providing a U.S. TIN or an FTIN. See codes 40 and
distribution in part or full payment in exchange for stock. 56 for dividend equivalents other than substitute dividends
9. Use codes 38 and 39 for payments to covered and example 10 of this list for additional information.
expatriates. Use code 38 for a payment of eligible deferred 15. Use code 55 (taxable death benefits on life insurance
compensation subject to section 877A(d)(1) and use code 39 contracts) to report taxable death benefits, such as benefits
for a distribution from a nongrantor trust subject to section paid on an insurance contract that was acquired on a transfer
877A(f)(1). For more information, see Notice 2009-85, for valuable consideration. See section 101 for when death
2009-45 I.R.B. 598, available at IRS.gov/irb/ benefits are taxable.
2020-03_IRB#NOT-2020-2. 16. Use income code 57 to report an amount realized
10. There are three categories of dividend equivalent under section 1446(f) (regardless of whether paid on a sale
codes. For substitute dividends, use code 34 or 53. See or PTP distribution).
example 7 of this list for additional instructions related to 17. Use income code 58 to the extent you cannot
substitute dividends. For dividend equivalents with respect to determine the income attributable to a PTP distribution and
a transaction that is a section 871(m) transaction as a result apply Regulations section 1.1446-4(d)(1) to determine the
of combining transactions under Regulations section withholding absent a qualified notice indicating the amount.
1.871-15(n) (including as modified by transition relief under
Notice 2024-44, when applicable) (a “combined 18. Use income code 59 (consent fees), 60 (loan
transaction”), use code 56 (dividend equivalents under IRC syndication fees), or 61 (settlement payments) for payments
section 871(m) as a result of applying the combined described by one of those codes that a withholding agent
transaction rules). For all other dividend equivalents, use concludes does not fit under another income code, excluding
code 40 (other dividend equivalents under IRC section code 23 (other income).
871(m)). Note. For tax year 2025 the use of the new income codes 59
11. Use code 41 (guarantee of indebtedness) for certain through 61 is optional.
guarantee of indebtedness payments. These are amounts 19. Income code 23 (other income) should be used only to
paid for the provision of a guarantee of indebtedness that report U.S. source FDAP income that is not reportable under
was issued after September 27, 2010. any other available income code.
12. Use either code 42 (earnings as an artist or
athlete—no central withholding agreement) or 43 (earnings If you paid more than one type of income to or on behalf of
as an artist or athlete—central withholding agreement) for the same recipient, you must complete a separate Form
payments to an artist or athlete. A central withholding 1042-S for each income type.
agreement is Form 13930, Application for Central
Note. Although income codes are provided for short-term
Withholding Agreement, plus additional information specified
OID and notional principal contract income, those items are
in the instructions for such form, that is entered into by the
not always subject to reporting on Form 1042-S. For example,
artist or athlete, a designated withholding agent, and the IRS.
short-term OID may need to be reported by an NQI or a
For more details, see Pub. 515.
flow-through entity if those amounts are paid to foreign
13. Use code 50 (income previously reported under persons and another withholding agent backup withheld on
escrow procedure) with respect to a recalcitrant account those amounts under the presumption rules. Notional
holder of a dormant account for which a participating FFI principal contract income is reportable if it is effectively
reported the income on Form 1042-S in a prior calendar year connected with the conduct of a trade or business in the
but for which the participating FFI was not required to deposit United States or results in the payment of interest under
the tax withheld or determined that withholding was not Regulations section 1.446-3(g)(4) or a dividend equivalent
required until the current calendar year under an applicable under section 871(m) and the regulations thereunder (for
escrow procedure. For additional information on the escrow which a Form 1042-S is required). For more information, see
procedure for dormant accounts, see Regulations section the regulations under chapter 3 and Pub. 515.
1.1471-4(b)(6). Also use code 50 for income reported on a
Form 1042-S in a prior calendar year for which tax withheld Box 2—Gross Income
was not deposited pursuant to the escrow procedure for For each income type, enter the gross amount you paid (in
undetermined amounts of income and such withheld tax is whole dollars) to or on behalf of the recipient during the
now required to be deposited in the current calendar year. calendar year, including withheld tax. See, however, the
For additional information on the escrow procedure for instructions for boxes 16a through 16e, later, for when you
undetermined amounts of income, see Regulations section must issue a separate Form 1042-S (or several Forms
1.1441-3(d)(1). For instructions on reporting amounts 1042-S) for income attributable to a PTP distribution. The
withheld during the current calendar year that you are not following other special procedures apply to the reporting of
depositing pursuant to the escrow procedure, see the gross income.
instructions for box 7, later. • You must report the entire amount of a corporate
14. Use code 52 (dividends paid on certain actively traded distribution made with respect to stock even if you elect to
or publicly offered securities), 53 (substitute reduce the amount of withholding on the distribution because
payments—dividends paid from certain actively traded or all or a part of the distribution is nontaxable or represents a
publicly offered securities), 51 (interest paid on certain capital gain dividend.
actively traded or publicly offered securities), 54 (substitute • You must report the entire amount of a payment if you do
payments—interest from certain actively traded or publicly not know at the time of payment the amount that is subject to
offered securities), and 13 (royalties paid on certain publicly withholding because the determination of the source of the
offered securities) if the income paid is described in income or the calculation of the amount of income subject to

Instructions for Form 1042-S (2025) 25

- 26 -

Enlarge image

Page 26 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

tax depends upon facts that are not known at the time of Chapter 3 Exemption Codes
payment.
• If you applied the escrow procedure under chapters 3 and A withholding agent should use chapter 3 exemption code 02
4, report the entire amount of a payment that you previously (exempt under IRC) only if none of the other chapter 3
reported in a prior calendar year for which you withheld tax exemption codes apply.
but did not deposit such tax under the escrow procedure if
the liability is due in the current calendar year. A withholding agent should use exemption code 06 (QI
• You must report the entire amount of gains relating to the that assumes primary withholding responsibility) only if it is
disposal of timber, coal, or domestic iron ore with a retained making a payment to a QI that has represented on its Form
economic interest, and gains relating to contingent payments W-8IMY that it is assuming primary withholding responsibility
received from the sale or exchange of patents, copyrights, under chapters 3 and 4. However, if the payment is made to a
and similar intangible property. QI that is acting as a QDD with respect to the payment, the
• You must report only the amount of cash paid on notional withholding agent should instead use exemption code 22
principal contracts. (QDD that assumes primary withholding responsibility).
• If reporting payments to artists or athletes who have
signed a central withholding agreement (income code 43), A withholding agent should use exemption code 07 (WP
you must report the gross amount paid to the artist or athlete or WT) only if it is making a payment to a foreign partnership
in box 2 (without any consideration to the expenses to be or trust that has represented on its Form W-8IMY that it is a
taken into account for purposes of determining the amount of WP or WT.
withholding tax pursuant to the central withholding
agreement). A withholding agent should use exemption code 08 (U.S.
• You must report the entire amount of any dividend branch treated as U.S. person) for chapter 3 purposes only if
equivalent as determined under Regulations sections it is making a payment to a U.S. branch or to a territory FI and
1.871-15(i) and (j). it has represented on its Form W-8IMY that it agrees to be
treated as a U.S. person.
Box 3
A withholding agent should use exemption code 10 (QI
Chapter indicator. If you are reporting amounts in boxes 7 represents that income is exempt) for chapter 3 purposes
through 9, enter either “3” or “4” to indicate whether the only if it makes a payment to a QI that has not assumed
amounts were withheld (or paid by the withholding agent) primary withholding responsibility under chapters 3 and 4 or
pursuant to chapter 3 or chapter 4. If you are reporting tax primary backup withholding responsibility, but has
withheld under section 5000C, or backup withholding was represented on a withholding statement associated with its
applied under the presumption rules, enter “3” as if the tax Form W-8IMY that the income is exempt from withholding.
were a chapter 3 tax.
A withholding agent should use exemption code 11 (QSL
Note. Either “3” or “4” (but not both) must be entered on
that assumes primary withholding responsibility) for chapter 3
each Form 1042-S. If you are not reporting amounts in boxes
purposes only if the withholding agent makes a substitute
7 through 9 because you did not withhold under chapter 3 or
dividend payment to a financial institution (including a QI)
4, you should enter “3.”
that represented on its Form W-8IMY that it is acting as a
If you are reporting payments to U.S. payees, enter “3” and QSL for the account associated with the form.
leave boxes 3a and 3b blank.
A withholding agent should use exemption code 12 (payee
Boxes 3a and 4a—Chapter 3 and Chapter 4 subjected to chapter 4 withholding) for chapter 3 purposes if
Exemption Codes the recipient has been withheld upon under chapter 4 and
In most cases, if the tax rate you entered in box 3b or 4b is thus chapter 3 withholding does not apply. When reporting a
00.00, you may be required to enter the appropriate payment subject to chapter 4 withholding, ensure that 30%
exemption code (01 through 24) from Appendix B, later, as tax is withheld, remitted to the IRS, and correctly reported on
applicable for chapter 3 and 4 purposes. In certain cases, Form 1042-S. See Special instructions for use of chapter 3
more than one exemption code will apply. See the exemption codes, later.
instructions below for the applicable codes to determine
which code to use. A withholding agent should use chapter 3 exemption code
23 for distributions made by a QIE to a qualified foreign
If an amount was withheld under chapter 4 (the tax rate pension fund (or an entity all of the interests of which are held
you entered in box 4b is greater than zero and is not due to by a qualified foreign pension fund) that are exempt under
backup withholding), enter “00” in box 4a. If the tax rate you section 897(l).
entered in box 4b is 00.00, you must enter the applicable
exemption code (13 through 21) in box 4a. If an amount was A withholding agent should use chapter 3 exemption code
withheld under chapter 3 (the tax rate you entered in box 3b 24 for income paid to a foreign government or an
is greater than zero and is not due to backup withholding), international organization that is exempt under section 892.
enter “00” in box 3a. If the tax rate you entered in box 3b is
due to backup withholding, leave box 3a blank. Chapter 4 Exemption Codes
If exemption code 01 or 14 (effectively connected income)
applies, you must enter the recipient's U.S. TIN in box 13e if A withholding agent should use exemption code 13
you report the income as effectively connected with a U.S. (grandfathered payment) for chapter 4 purposes only if the
trade or business. If the recipient's U.S. TIN is unknown or withholding agent makes a payment under a grandfathered
unavailable, you must withhold tax at the rate of 30% (30.00) obligation (as defined in Regulations section 1.1471-2(b)(2))
and enter “00” in boxes 3a and 4a. and exemption code 13 is the only exemption code that

26 Instructions for Form 1042-S (2025)

- 27 -

Enlarge image

Page 27 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

applies. If another exemption code applies, it should be used • Enter the appropriate exemption codes, if any, in boxes 3a
instead of exemption code 13. and 4a;
• Enter the actual amount of U.S. federal tax withheld by the
A withholding agent should use exemption code 15 (payee other withholding agent in box 8;
not subject to chapter 4 withholding) for chapter 4 purposes if • Provide the name and address of the actual recipient in
the payment is a withholdable payment (as defined in boxes 13a through 13d along with the other required
Regulations section 1.1473-1(a)) but has not been withheld information for the recipient;
upon under chapter 4 because of the payee's chapter 4 • Provide the name and EIN of the other withholding agent
status. Also, if the withholding agent applies the 90-day grace that actually withheld and deposited the tax (primary
period for a withholdable payment following a change in withholding agent) in boxes 14a and 14b; and
circumstances, use exemption code 15 (payee not subject to • Report the account holder's U.S. TIN, if provided.
chapter 4 withholding). If you submit Form 1042-S as described above, you
must also submit Form 1042 and issue a Form
A withholding agent should use exemption code 16 CAUTION! 1042-S to each recipient (including any unknown
(excluded nonfinancial payment) for chapter 4 purposes for recipient or U.S. payee) of the income to which withholding
payments described in Regulations section 1.1473-1(a)(4) was applied.
(iii). However, the withholding agent should only use
exemption code 16 if it is the only exemption code that Special instructions for use of chapter 3 exemption co-
applies. If another exemption code applies, it should be used des. If an amount was withheld under chapter 4, you may
instead of exemption code 16. also include a chapter 3 exemption code and tax rate in
boxes 3a and 3b to show the rate that would otherwise apply
A withholding agent should use exemption code 17 as if the payment had been later determined to be exempt
(foreign entity that assumes primary withholding from withholding under chapter 4. This may be done, for
responsibility) for chapter 4 purposes only if it makes a example, to assist the beneficial owner in pursuing a claim for
payment to a QI that assumes primary withholding refund. In such a case, enter “4” as the chapter indicator in
responsibility, a WP, or a WT. box 3 to show that withholding was applied under chapter 4.

A withholding agent should use exemption code 18 (U.S. Boxes 3b and 4b—Chapter 3 and Chapter 4 Tax
payees of participating FFI or registered deemed-compliant Rates
FFI) for chapter 4 purposes only if it makes a payment to a Enter the correct rate of withholding that applies to the
participating FFI or registered deemed-compliant FFI and income in box 2 (gross income) or box 6 (net income), as
only to the extent represented on such FFI's withholding appropriate. In the case of a payment subject to chapter 4
statement associated with its Form W-8IMY that the payment withholding, the correct rate of withholding is “30.00.” If the
is allocable to a chapter 4 withholding rate pool of U.S. amount reported in box 2 is not subject to chapter 4
payees and the FFI certifies on its withholding certificate that withholding or is not a withholdable payment, you must enter
the FFI meets the requirements to include the account holder “00.00” in box 4b and provide the applicable exemption code
in a withholding rate pool of U.S. payees. in box 4a. For purposes of chapter 3 withholding, see Valid
Tax Rate Table. The correct tax rate should be included even
A withholding agent should use exemption code 20 if you withheld at a different rate. For example, if an NQI that
(dormant account) for chapter 4 purposes only if it makes a is a participating FFI is reporting dividends paid to a
withholdable payment to a participating FFI or registered beneficial owner who is exempt from withholding under
deemed-compliant FFI that represented on its withholding chapter 4 and a resident of a country with which the United
statement associated with its Form W-8IMY that the payment States does not have a tax treaty and a U.S. withholding
is allocable to a dormant account holder for which the escrow agent paid the dividend and incorrectly withheld only 15%
procedure of Regulations section 1.1471-4(b)(6) applies. under chapter 3 (rather than the required 30%) and the NQI
withholds an additional 15% under chapter 3, the NQI should
A withholding agent should use exemption code 21 (other report “30.00” in box 3b. See Example 18, earlier, under
payment not subject to chapter 4 withholding) for chapter 4 Multiple Withholding Agent Rule. The tax rate on dividends
purposes if the payment is exempt from chapter 4 withholding paid to a corporation created or organized in, or under the
and no other chapter 4 exemption code applies. A law of, the Commonwealth of Puerto Rico may be 10%,
withholding agent should also use exemption code 21 (other rather than 30%. See Pub. 515 for more information.
payment not subject to chapter 4 withholding) when using
income code 37 (return of capital) to report nondividend In the case of a specified federal procurement payment
payments. subject to section 5000C withholding, the correct rate of
withholding is 2% or “02.00.” For Form 1042-S purposes,
report tax withheld under section 5000C in box 3b as if the
If you have failed to provide a withholding agent with
tax were a chapter 3 tax.
appropriate information regarding the status of the person to
whom you are making a payment, the other withholding Enter the tax rate using the following format: two digits, a
agent may be required to withhold on the payment based on decimal point, and two digits (for example, “30.00” for 30%).
the presumption rules. If the income is in fact exempt from However, if the income is exempt from tax under a U.S. tax
withholding or subject to a reduced rate of withholding, and treaty or the Internal Revenue Code, enter “00.00.” If the tax
the account holder requests a corrected form, you must rate is less than 10%, enter a zero before the tax rate (for
submit a Form 1042-S providing the correct information. In example, “04.00” for 4%).
this situation, you must:
• Indicate the correct rate of withholding that should have
been applied to the income in boxes 3b or 4b;

Instructions for Form 1042-S (2025) 27

- 28 -

Enlarge image

Page 28 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

If you withheld at more than one tax rate for a specific payments pursuant to the escrow procedure must report
! type of income that you paid to the same recipient, such payments on separate Forms 1042-S. Box 7b must only
CAUTION you must file a separate Form 1042-S for each be checked when using the escrow procedures as specified
amount to which a separate rate was applied. above.
If you are a participating FFI or registered
Valid Tax Rate Table deemed-compliant FFI that, for chapter 4 purposes, applied
the escrow procedure for dormant accounts, if the payment is
00.00 10.00 24.00 also an amount subject to chapter 3 withholding and tax is
withheld and deposited under chapter 3, do not check
02.00 12.00 25.00 box 7b. Instead, enter “3” in box 3 and complete box 3b to
04.00 12.50 27.50 report the tax withheld under chapter 3.
04.90 14.00 28.00 Box 7c. Check box 7c if you are a partnership that received
an amount subject to withholding during the 2025 calendar
04.95 15.00 30.00 year (preceding year) and you are withholding on the amount
05.00 17.50 37.00 includible in a foreign partner’s share after March 15 of the
subsequent year (2026). Only check this box if you
07.00 20.00
designated the deposit as attributable to the preceding year
08.00 21.00 (2025). In such a case, the partnership will be required to
report the associated income and tax withheld on Forms
Exception for central withholding agreements. If you are 1042 and 1042-S for the preceding year. If a partnership
the designated withholding agent who has entered into a withholds on a foreign partner’s share of income after March
central withholding agreement and you report an amount in 15 of the subsequent year, the due date for filing and
box 2 using income code 43 (earnings as an artist or furnishing the applicable Form(s) 1042-S is September 15 of
athlete—central withholding agreement), you must enter a the subsequent year (2026). For example, if a partnership
tax rate in box 3b and you must include chapter 4 exemption withholds on April 1, 2026, with respect to a foreign partner’s
code 16 (excluded nonfinancial payment) in box 4a. share of undistributed income for the 2025 calendar year, the
partnership may designate the deposit as made for 2025 and
Box 5—Withholding Allowance report the liability and tax withheld on the 2025 Form 1042
This box should be completed only if the income code and the 2025 Form 1042-S for the partner. The partnership
reported in box 1 is 16 (scholarship or fellowship grants), 17 must also ensure that its chapter 3 status code on such forms
(compensation for independent personal services), 18 properly reflects its status as a partnership (including as a
(compensation for dependent personal services), 19 WP). The extended deadline of September 15, 2025, is also
(compensation for teaching), 20 (compensation during applicable when a partnership is reporting on Form 1042-S
studying and training), or 42 (earnings as an artist or an allocation of income made after March 15 of the
athlete—no central withholding agreement), and there is a subsequent year to a foreign partner for the prior year, but no
valid treaty claim that provides an exemption from withholding is required on the income. In such a case, box 7c
withholding up to a specific amount. Report the amount must also be checked even if there is no withholding. For
exempt from withholding here. This box should not be used more information, see proposed regulations issued on
for reporting a personal exemption. If you are a designated December 18, 2018 (REG-132881-17).
withholding agent that has entered into a central withholding Box 7d. Check this box only if you are a QI, WP, or WT that
agreement with the IRS, leave this box blank and report the originally filed a Form 1042-S to report an amount subject to
gross amount paid to the recipient in box 2. See Pub. 515 for withholding in a withholding rate pool and you are revising the
more information. amounts reported to report to a specific recipient in
accordance with the provisions of the QI agreement (Rev.
Box 6—Net Income Proc. 2022-43) or the WP/WT agreement (Rev. Proc.
Complete this box only if you entered an amount in box 5. 2017-21).
Otherwise, leave it blank.
Note. This box should be checked on both the new Form
Boxes 7a Through 11—Federal Tax 1042-S that is issued to a specific recipient and the amended
Withheld Form 1042-S that is filed to revise the amounts reported to a
withholding rate pool.
Box 7a. Enter the total amount of U.S. federal tax you
actually withheld in box 7a under chapter 3 or 4. If you did not Note. When filing Forms 1042-S to revise reporting to
withhold any tax, enter “-0-.” withholding rate pools and report to a specific recipient after
a Form 1042 has been filed, the Form 1042 must be
Box 7a must be completed in all cases, even if no tax amended to reflect the changes to the total Forms 1042-S
! has been deposited. filed on lines 61a or 61b.
CAUTION
Box 8. If you are a withholding agent filing a Form 1042-S to
Box 7b. A withholding agent that withheld tax during the report income that has already been subject to withholding by
calendar year and that was not required to deposit with the another withholding agent, enter the amount actually
IRS the tax withheld during the calendar year pursuant to the withheld by the other agent(s) in box 8.
escrow procedure under Regulations sections 1.1471-2(a)(5)
(ii) and/or 1.1441-3(d) must check box 7b (federal tax Box 9—Overwithheld tax repaid to recipient pursuant to
withheld was not deposited with the IRS because escrow adjustment procedures. This box should be completed
procedures were applied). A withholding agent reporting only if you repaid a recipient under the reimbursement or

28 Instructions for Form 1042-S (2025)

- 29 -

Enlarge image

Page 29 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

set-off procedure during the 2026 calendar year in
Boxes 12b and 12c—Withholding
accordance with the requirements of Regulations section
1.1461-2(a)(2) or (3) (for withholding under chapter 3), or Agent's Chapter 3 and Chapter 4
Regulations section 1.1474-2(a)(3) or (4) (for withholding
under chapter 4). Status Codes
If you repaid the recipient under the reimbursement or Enter the withholding agent status code(s) from the list of
set-off procedure during the 2025 calendar year, do not Recipient Status Codes in Appendix B, later. You must enter
complete box 9. Instead, reduce the amount of withholding both a chapter 3 and a chapter 4 withholding agent status
reported in box 7a. code regardless of the type of payment being made. If you
are a U.S. financial institution, indicate your chapter 4 status
In most cases, an intermediary or a flow-through entity code as 01, except when a foreign branch of a U.S. financial
should not enter an amount in box 9 unless it is a QI that institution issues Form 1042-S (in such a case, indicate the
represented on its Form W-8IMY that it is assuming primary chapter 4 status code as 50).
withholding responsibility or is a WP or WT.
The adjustment for amounts overwithheld applies to Note. Withholding agents that are U.S. governmental entities
or U.S. tax-exempt entities, including colleges and
! partnerships, brokers, or nominees required to universities, and other U.S. tax-exempt entities under the
CAUTION withhold under sections 1446(a) and (f) starting in
2023. Internal Revenue Code other than under section 501(c), may
use chapter 3 status code 41 (U.S. government entity or tax
exempt entity (other than section 501(c) entities)) for box 12b.
Note. If the withholding agent meets the above
requirements, the withholding agent may make adjustments Note. A withholding agent should in general select the
to overwithholding using either the reimbursement or set-off chapter 3 status code that most closely applies with its status
procedure until the extended due date for filing Form 1042-S based on the available codes. For example, if a U.S. financial
(or, if earlier, the date on which the Form 1042-S is either filed institution (which checks chapter 4 status code 01, as such,
or furnished). Additionally, a withholding agent may use the unless it is a foreign branch) is a corporation, it should use
extended due date for filing a Form 1042 to claim a credit for chapter 3 status code 15 (Corporation).
any adjustments made to overwithholding.
Box 10. Enter in box 10 the combined amounts reported in Note. A withholding agent that is a partnership and is
box 7a (federal tax withheld), box 8 (tax withheld by other reporting allocations of QDD items to its partners should use
agents), and box 9 (overwithheld tax repaid to recipient chapter 3 status code 40 (Partnership QDD).
pursuant to adjustment procedures).
Boxes 12d Through 12i—Withholding
Example. If the box 7a amount is $600, the box 8 amount
is $120, and the box 9 amount is ($50), the box 10 amount Agent's Name, GIIN, Country Code,
will equal $670. FTIN (if any), and Address
Box 10 must be completed in all cases, even if no tax Enter your name and address in the appropriate boxes. If
! has been deposited. your post office does not deliver mail to the street address
CAUTION and you have a P.O. box, show the box number instead of the
street address.
Box 11—Tax paid by withholding agent (amounts not
withheld). Enter the total amount of tax paid by you and not Note. On statements furnished to individual recipients of
withheld from the payment to the recipient. The amounts U.S. source deposit interest, in addition to your name and
reported in box 11 should be the amounts paid by the address, you must include the telephone number of a person
withholding agent from its own funds rather than through to contact. This number must provide direct access to an
withholding from the payment to the recipient. Any amount individual who can answer questions about the statement.
reported in this box must not be included in box 10. The telephone number is not required on Copy A of paper
forms or on electronically filed forms.
Box 12a—Withholding Agent's EIN
You are required to enter your EIN. However, if you are filing Box 12e—Withholding agent's GIIN. The GIIN provided, if
Form 1042-S as a QI, WP, or WT, enter your QI-EIN, WP-EIN, any, should be the GIIN issued to the branch of, or
or WT-EIN. The withholding agent's EIN cannot be disregarded entity owned by, the participating FFI or
truncated. registered deemed-compliant FFI that is making the
payment.
If you don’t have an EIN, you may apply for one online by
going to IRS.gov/EIN. If you are outside the United States, Box 12f—Country code. You must enter the code (from the
you may also apply for an EIN by calling 267-941-1099 (not a list at IRS.gov/CountryCodes) for the country for which you
toll-free number). You may also apply for an EIN by faxing or are resident under that country's tax laws. Enter “OC” (other
mailing Form SS-4 to the IRS. File amended Forms 1042-S country) only when the country of residence does not appear
when you receive your EIN. on the list.
To get a QI-EIN, WP-EIN, or WT-EIN, submit Form SS-4 Note. If the withholding agent is a U.S. person or a foreign
with your application for that status. (See the definitions for branch of a U.S. person, enter “US” in box 12f.
qualified intermediary (QI) and withholding foreign
partnership (WP) or withholding foreign trust (WT) under
Definitions, earlier, for more information.)

Instructions for Form 1042-S (2025) 29

- 30 -

Enlarge image

Page 30 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

If exemption code 04 (exempt under tax treaty)
Boxes 13a Through 13d—Recipient's
appears in box 3a or if a reduced rate of withholding
Name, Country Code, and Address CAUTION! based on a tax treaty is entered in box 3b, the
country code entered in box 13b must be a country with
Box 13a—Recipient's name. Enter the complete name of which the United States has entered into an income tax
the recipient in box 13a. treaty.
• If you do not know the name of the recipient, or are
required to use the recipient status codes for an unknown Boxes 13c and 13d—Recipient's address. In most cases,
recipient, enter “Unknown Recipient.” Also enter "Unknown you must enter a foreign address in boxes 13c and 13d.
Recipient" if you pay an amount realized subject to section However, there are limited exceptions. For example, you may
1446(f) withholding to an NQI and you do not agree with the enter a U.S. address when reporting payments of scholarship
NQI to report the NQI's account holders on Form 1042-S. or fellowship grants (income code 16).
• If Form 1042-S is being completed by a QI, WP, or WT for
a chapter 3 withholding rate pool or chapter 4 withholding For addresses outside the United States or its
pool, enter “Withholding rate pool” if withholding under commonwealths and territories, follow the foreign country's
chapter 3 was applied, or, if chapter 4 withholding was practice for entering the postal code.
applied, a description of the chapter 4 reporting pool (for For addresses within the United States, use the U.S.
example, “Nonparticipating FFI Pool”) in box 13a. Postal Service two-letter abbreviation for the state name.
• A withholding agent reporting payments made to a If you want to enter the recipient's account number, use
participating FFI or registered deemed-compliant FFI with box 13k.
respect to a chapter 4 reporting pool must include the name
and address of the FFI in boxes 13a through 13g as well as Boxes 13e and 13h—Recipient's U.S.
the FFI's GIIN and country code. The GIIN reported must be
the GIIN of the branch to whom the withholding agent is TIN and GIIN
making the payment. You must obtain and enter a U.S. TIN for any of the following
• A QI reporting payments made to a PAI on a withholding recipients.
rate pool basis must include the name and address of the PAI • Any recipient whose income is effectively connected with
in boxes 13a through 13g. the conduct of a trade or business in the United States. For
• In the case of foreign joint owners, Form 1042-S can only these recipients (excluding a recipient receiving a payment
list one of the owners as the recipient in box 13a. Form subject to section 1446(a) or (f) withholding), enter exemption
1042-S must not be completed with more than one of the code 01 in box 3a or exemption code 14 in box 4a.
joint owners as the recipient. • Any foreign person claiming a reduced rate of, or
• If the recipient is a QI acting as a QDD with respect to the exemption from, tax under a tax treaty between a foreign
payment, enter the name of the QDD (identifying the QDD by country and the United States, unless the recipient provides
the name used for the QDD on the Form W-8IMY it provides, an FTIN (in such case, use box 13i), or unless the income is
which should include a branch identifier, if applicable). an unexpected payment (as described in Regulations section
• If a disregarded entity (or a branch) that is required to 1.1441-6(g)) or consists of dividends and interest from stocks
provide a TIN on Form W-8IMY is identified in Part II of the and debt obligations that are actively traded; dividends from
Form W-8BEN-E, include the name of the disregarded entity any redeemable security issued by an investment company
(or the jurisdiction of the branch) in parentheses after the registered under the Investment Company Act of 1940
name of the recipient. (mutual fund); dividends, interest, or royalties from units of
beneficial interest in a unit investment trust that are (or were,
Box 13b—Recipient's country code. You must enter the upon issuance) publicly offered and are registered with the
code (from the list at IRS.gov/CountryCodes) for the country Securities and Exchange Commission under the Securities
of which the recipient claims residency under that country's Act of 1933; and amounts paid with respect to loans of any of
tax laws. Enter “OC” (other country) only when the country of the above securities. In the latter case, you must use income
residence does not appear on the list or the payment is made code 13, 51, 52, 53, or 54.
to an international organization (for example, the United • Any nonresident alien individual claiming exemption from
Nations). If the recipient is unknown, leave box 13b blank and tax under section 871(f) for certain annuities received under
enter "Unknown Recipient" in box 13a. If you are making a qualified plans.
payment to a QI, QSL, WP, or WT, or if you are a QI, QSL, • A foreign organization claiming an exemption from tax
WP, or WT and are making a payment to a QI, WP, or WT solely because of its status as a tax-exempt organization
withholding rate pool, enter the country code of the QI, QSL, under section 501(c) or as a private foundation.
WP, or WT. Also, if you are making a payment to a • Any QI other than a disclosing QI (which is not a recipient).
participating FFI or registered deemed-compliant FFI's • Any WP or WT.
chapter 4 reporting pool, enter the country code of the • Any nonresident alien individual claiming exemption from
participating FFI or registered deemed-compliant FFI or withholding on compensation for independent personal
branch of or disregarded entity owned by such FFI receiving services.
the withholdable payment and that was listed on Part II of • Any U.S. branch of an FFI or territory FI that is treated as a
either the Form W-8BEN-E or W-8IMY. U.S. person.
• Any QSL that was paid a substitute dividend.
Note. If you are reporting a payment to a U.S. person on
Form 1042-S, enter “US” as the country code. In all other cases, if you know the recipient's TIN or if a
foreign person provides a TIN on Form W-8, but is not
required to do so, you must include the TIN on Form 1042-S.
A U.S. TIN is also required on a Form 1042-S used by a
recipient to claim credit for (or a refund of) the withholding.

30 Instructions for Form 1042-S (2025)

- 31 -

Enlarge image

Page 31 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

You must include a GIIN if you are required to collect a respect to a payment, do not include a chapter 4 status code
GIIN for the recipient under the requirements documenting unless making such payment to a PAI or certain partnerships
the payee under chapter 4. If you make a payment to a or trusts. See Amounts Paid to PAIs and Amounts Paid by
disregarded entity or branch that is identified in Part II of Form QIs to Certain Partnerships and Trusts, earlier.
W-8BEN-E, then report the GIIN of the disregarded entity or • Use recipient code 35 (qualified derivatives dealer) if you
branch provided in that section. make a payment to a QI that is acting as a QDD with respect
to the payment.
Boxes 13f and 13g—Recipient’s • A U.S. withholding agent making a payment to any other
Chapter 3 and Chapter 4 Status QI (other than a disclosing QI) should use recipient code 12
and recipient code 09 or 11 if it is making a payment to a WP
Codes or WT, respectively.
Enter the recipient status code from the list of Recipient • Use recipient code 05 (U.S. branch—treated as U.S.
Status Codes in Appendix B, later. The following special person) if you make a payment to a U.S. branch or territory FI
instructions apply for chapter 3 status codes. treated as a U.S. person.
• If income code 42 (earnings as an artist or athlete—no A chapter 4 status code is required only if the payment
central withholding agreement) or 43 (earnings as an artist or is a withholdable payment or when a participating FFI or
athlete—central withholding agreement) is used in box 1, use registered deemed-compliant FFI provides a chapter 4
recipient code 22 (artist or athlete) instead of recipient code withholding rate pool of U.S. payees. The chapter 4 status
16 (individual), 15 (corporation), or 08 (partnership other than code may be determined under the applicable IGA by a
withholding foreign partnership, publicly traded partnership, withholding agent that is an FFI subject to such an
or partnership QDD). agreement. The following special instructions apply for
• If you are making a payment to an NQI or a flow-through chapter 4 status codes.
entity, in most cases you must use the recipient code that • If you are making a withholdable payment to a U.S. branch
applies to the type of recipient who receives the income from of an FFI, use the applicable chapter 4 status code for the
the NQI or flow-through entity. country of residence for an entity that is a participating FFI or
• Use recipient code 08 (partnership other than withholding registered deemed-compliant FFI. Otherwise, use the
foreign partnership, publicly traded partnership, or chapter 4 status code for any other foreign branch of the
partnership QDD) only if you are reporting a payment of entity that is a participating FFI or registered
income that is effectively connected with the conduct of a deemed-compliant FFI.
trade or business of an NWP in the United States or that is • Only use recipient code 15 (nonparticipating FFI) or 30
subject to reporting under section 1446(f). You may, however, (recalcitrant account holder) if you are reporting directly to the
use recipient code 08 as the chapter 3 status code if you are recipient. See Amounts paid to an NQI or a flow-through
using a chapter 4 pooled reporting code with respect to a entity of withholdable payments, earlier. If you are reporting
payment made to an NWP. See the instructions later for use the chapter 4 reporting pools of recalcitrant account holders
of recipient codes when reporting pools. Otherwise, follow of a participating FFI, registered deemed-compliant FFI, or
the rules that apply to payments to flow-through entities. QI, use codes 42 through 49. Only use chapter 4 reporting
• Use recipient code 21 (unknown recipient) only if you have pool code 48 (U.S. payees pool) if a participating FFI or
not received a withholding certificate or other documentation registered deemed-compliant FFI has provided a Form
for a recipient or you cannot determine how much of a W-8IMY certifying that it meets the requirements to include
payment is reliably associated with a specific recipient, or the account holder in a withholding rate pool of U.S. payees
you pay an amount realized subject to section 1446(f) and that is associated with a withholding statement allocating
withholding to an NQI and you do not agree with the NQI to the payment or a portion of the payment to a chapter 4
report the NQI's account holders on Form 1042-S. Do not use withholding rate pool of U.S. payees. Only use chapter 4
this code because you cannot determine the recipient's reporting pool code 49 (QI-recalcitrant pool—general) if you
status as an individual, a corporation, etc. The regulations are reporting recalcitrant account holders of a QI.
under chapter 3 provide rules on how to determine a • Use recipient code 17 (U.S. branch—treated as U.S.
recipient's status when a withholding agent does not have the person) if you are making a payment to a U.S branch treated
necessary information. as a U.S. person (or recipient code 04 for a territory FI treated
• Use recipient code 13 (qualified securities as a U.S. person).
lender—qualified intermediary) or 14 (qualified securities • Use recipient code 26 (excepted NFFE—other) if you are
lender—other) if you make a payment to a QSL. reporting to an NFFE treated as a U.S. person.
• Only a QI may use recipient codes 29 (PAI withholding rate • Only use recipient code 29 (unknown recipient) if you have
pool—general) and 30 (PAI withholding rate pool—exempt not received a withholding certificate or other documentation
organizations). Only a QI, WP, or WT that made a pooled with respect to a withholdable payment from an intermediary
reporting election for chapter 3 purposes may use recipient or a flow-through entity. Only use this code if you also used
codes 31 (agency withholding rate pool—general), 32 recipient code 21 (unknown recipient) as the chapter 3 status
(agency withholding rate pool—exempt organization), 27 code. If you have not received a withholding certificate or
(withholding rate pool—general), and 28 (withholding rate other documentation from an intermediary or a flow-through
pool—exempt organization) for chapter 3 purposes. entity, you must include the entity’s information in boxes 15a
Recipient code 28 or 30 should be used only for pooled through 15i. You may also use recipient code 29 if you are
account holders that have claimed an exemption based on reporting a withholdable payment to a recipient that is not
their tax-exempt status and not some other exemption (for subject to withholding under the terms of an IGA and the
example, treaty or other Internal Revenue Code exception). A recipient's account is not required to be reported as a U.S.
QI acting as a QDD may use only pooled reporting codes 27 account or nonconsenting U.S. account (for example, an
and 28. If you are a QI (including a QI acting as a QDD), WP, undocumented individual with no U.S. indicia).
WT, or QSL using a chapter 3 pooled reporting code with

Instructions for Form 1042-S (2025) 31

- 32 -

Enlarge image

Page 32 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• Use recipient code 33 (U.S. reportable account) if you are • Any recipient of a payment made with respect to a financial
reporting the recipient's account as a U.S. reportable account account (as defined in Regulations section 1.1471-5(b))
under the terms of a Model 1 IGA and the recipient does not maintained at your U.S. office or branch, if you are a financial
meet the applicable requirements to be included in a pool of institution, to the extent that such recipient has furnished a
U.S. payees because the account holder is subject to withholding certificate that provides an FTIN, or you obtain
chapter 3 withholding. the FTIN under the alternative procedures described in
• Use recipient code 34 (nonconsenting U.S. account) if you Regulations section 1.1441-1(e)(2)(ii)(B), or the recipient's
are reporting the recipient's account as a nonconsenting U.S. FTIN is identified in any of your electronically searchable
account under the terms of a Model 2 IGA and the recipient information. See Regulations section 1.1441-1(e)(2)(ii) for
does not meet the applicable requirements to be included in more information regarding a withholding agent's obligation
a pool of U.S. payees because the account holder is subject to obtain and report a recipient's FTIN.
to chapter 3 withholding.
• Use recipient code 37 (undocumented preexisting Box 13j—LOB Code
obligation) for an obligation that a withholding agent has not If you are making a payment for which a beneficial owner that
documented and the payment being reported was made is an entity has claimed a reduced rate of withholding under
before the expiration of the time period allowed for an income tax treaty and has provided documentation that
documenting the obligation and thus the withholding agent establishes the LOB article under which the beneficial owner
was not required to apply the presumption rules to determine qualifies, enter the applicable LOB code from Appendix B,
the payee's chapter 4 status. later. See the Instructions for Form W-8BEN-E for a
• Use recipient code 39 (account holder of excluded description of each of the LOB codes. If you are a QI, WP, or
financial account) if you are reporting amounts paid with WT reporting a chapter 3 pool for which a reduced rate of
respect to an obligation that is excluded from the definition of withholding under an income tax treaty applies, do not
financial account for chapter 4 purposes (see Regulations include an LOB code.
section 1.1471-5(b)(2)).
• Use recipient code 41 (NFFE subject to 1472 withholding) Box 13k—Recipient’s Account
if you are reporting amounts paid to a specific recipient that is
Number
an NFFE that you (or another withholding agent) withheld
upon under section 1472 (that is, you are reporting amounts If you are a financial institution reporting amounts paid to your
in boxes 7 through 9) unless the NFFE is treated as a direct account holder with respect to an account maintained
recalcitrant account holder under Regulations section by you at your U.S. office or U.S. branch, you must report the
1.1471-5(g), in which case, use code 30 (recalcitrant account recipient’s account number in box 13k. If the amount is paid
holder). through an NQI or a flow-through entity, you are not required
• If you received a withholding certificate or other to use this box.
documentation with respect to a withholdable payment from
an intermediary or a flow-through entity that is a participating Note. A U.S. financial institution or a U.S. branch of an FFI is
FFI or deemed-compliant FFI (other than a WP, WT, or QI that required to report payments of the same type of income (as
assumes primary withholding responsibility) and cannot determined by the income code in box 1) made to multiple
reliably associate the payment with documentation to financial accounts held by the same beneficial owner at a
determine the payee's chapter 4 status (or with a chapter 4 U.S. office of such institution on a separate Form 1042-S for
withholding rate pool), you must report the recipient as each account. For this purpose, a financial account is an
“Unknown Recipient” and include the entity's information in account described in Regulations section 1.1471-5(b)(1).
boxes 15a through 15i (to the extent provided). Report the identifying number assigned to such account (or
• If you are reporting a chapter 4 pooled reporting code with its functional equivalent in the absence of an account number
respect to a withholdable payment to an intermediary or a for the recipient).

flow-through entity, use the chapter 3 status code for the Box 13l—Recipient’s Date of Birth
intermediary or flow-through entity as the recipient code.
• If you are a QI, WP, or WT reporting direct account holders, Use box 13l to enter the recipient’s date of birth. The correct
do not include a chapter 3 status code for the recipient if you format if entered is YYYYMMDD (for example, enter
are using a chapter 4 reporting pool code as the recipient’s “20001205” for a date of birth of December 5, 2000). A
chapter 4 status code. financial institution making a payment with respect to a
• If you are making a withholdable payment to a recipient financial account (as defined in Regulations section
that is a restricted distributor (as defined in Regulations 1.1471-5(b)) maintained at its U.S. office or U.S. branch must
section 1.1471-5(f)(4)), use recipient code 10 (certified report the recipient's date of birth (if the recipient is an
deemed-compliant FFI—other). individual) to the extent that such recipient has furnished
documentation that provides a date of birth or the recipient's
Box 13i—Recipient's FTIN date of birth is identified in any of the withholding agent's
Use box 13i to enter the recipient’s identification number files. See Regulations section 1.1441-1(e)(2)(ii)(B) for more
used in the recipient’s country of residence for tax purposes. information regarding a withholding agent's obligation to
obtain and report a recipient's date of birth.
You must obtain and enter an FTIN for any of the following
recipients. Boxes 14a and 14b—Primary
• Any foreign person claiming a reduced rate of, or Withholding Agent's Name and EIN
exemption from, tax under a tax treaty between a foreign If you are an intermediary or a flow-through entity reporting
country and the United States if such person did not provide amounts withheld by another withholding agent (the primary
a U.S. TIN and the income is not the type for which an withholding agent) in box 8, you must provide the name and
exemption from the TIN requirement applies (see the EIN of the withholding agent that withheld the tax. If multiple
instructions for boxes 13e and 13h, earlier).

32 Instructions for Form 1042-S (2025)

- 33 -

Enlarge image

Page 33 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

withholding agents withheld amounts reported on the same section 1446(a) (reporting income code 27), enter the PTP's
Form 1042-S, report the name of any one of the withholding information in boxes 16a through 16e. However, you must
agents that withheld amounts. Otherwise, leave blank. enter the PTP's EIN, GIIN (if any), and chapter 4 status only if
included in your records for the PTP interest that relates to
Box 15—Pro-Rata Basis Reporting the distribution. This includes information in your securities
Checkbox master file (or similar document), or that is reported in a
qualified notice issued by the PTP during the year of the
Withholding agents must check box 15 to notify the IRS that distribution. A nominee should also enter the PTP information
an NQI that used the alternative procedures of Regulations when using income code 58 (undetermined income) to report
section 1.1441-1(e)(3)(iv)(D) failed to properly comply with a PTP distribution or when using income code 57 to report an
those procedures. See Pro-rata reporting to NQI, earlier, for amount realized attributable to a PTP distribution.
additional information.
Note. You must issue a separate Form 1042-S to complete
Boxes 15a Through boxes 16a through 16e with respect to each PTP that makes
15i—Intermediary/Flow-Through a distribution of any of these types of income to the recipient.
This requirement does not apply to a withholding agent that
Entity's Name, Status Code, Country reports to a QI as a recipient with respect to a withholding
Code, Address, EIN, GIIN, and FTIN rate pool or to a QI that reports using withholding rate pools.
If you are reporting amounts subject to reporting for chapter 3 A PTP may be required to report the same amount of a
or 4 purposes paid to a recipient whose withholding PTP distribution on a qualified notice as subject to both
certificates or other documentation has been submitted to section 1446(f) withholding and other chapter 3 or 4
you (or should have been submitted to you) with a Form withholding (such as under section 1446(a)). See
W-8IMY provided by an intermediary or a flow-through entity, Regulations sections 1.1446-4(b)(4) and 1.1446(f)-4(c)(2)
you must include the name and address of the intermediary (iii). In this case, you must report the same amount on
or flow-through entity with whose Form W-8IMY the separate Forms 1042-S, with the appropriate income code
recipient's Form W-8 or other documentation is associated. and associated amount of withholding included on each
form. Therefore, the total amounts reported on Forms 1042-S
You must also include the intermediary or flow-through in box 2 (gross income) resulting from the distribution may, in
entity's chapter 3 and chapter 4 status codes and, if any, the some cases, exceed the actual amount of the distribution.
TIN and GIIN of the intermediary or flow-through entity when
provided or required to be collected by the withholding agent. Boxes 17a Through 17c—State
If the intermediary or flow-through entity completed Part II of
Income Tax Withheld and Related
Form W-8IMY, then report the GIIN provided in that section. If
you are making a payment to a U.S. branch not treated as a Information
U.S. person that has certified that it is applying the rules in Include in these boxes information relating to any state
Regulations section 1.1471-4(d)(2)(iii)(C) (in order to avoid income tax withheld.
being withheld upon under chapter 4), use chapter 4
intermediary code 18 (U.S. branch—not treated as U.S. Amended Forms
person (reporting under section 1471)). If you file a Form 1042-S with the IRS and later discover you
made an error on it, you must correct it as soon as possible.
Note. A withholding agent that is an intermediary or a To correct a previously filed Form 1042-S, you will need to file
flow-through entity will leave these boxes blank unless it is an amended Form 1042-S. The amended form must have the
making the payment to an intermediary or a flow-through same unique form identifier as the original form that is being
entity. amended. You must check the “Amended” box and provide
Box 15f—Country code. You must enter the country code the amendment number. The amendment number must be
(from the list at IRS.gov/CountryCodes) for the country where numeric and the length must be exactly one digit. Each time
the intermediary or flow-through entity is located. that you amend the same form (as determined by the unique
form identifier), you must provide the amendment number in
Box 15g—Intermediary or flow-through entity's FTIN.
the box provided on the form (using “1” for the first
Use box 15g to enter the intermediary or a flow-through
amendment and increasing sequentially for each subsequent
entity's identifying number used in the country of residence
amendment).
for tax purposes. Box 15g is optional.
Boxes 16a Through 16e—Payer's If you provide an amended Form 1042-S to a
recipient, you must also file the amended form with
Name, TIN, GIIN, and Status Code CAUTION! the IRS.
See the definition of authorized agent, earlier, under
Definitions. Include the payer's name, TIN, and GIIN if Do not file an amended return if you provided Form
different from the withholding agent shown in boxes 12a, 12d, 1042-S to the recipient (Copies B, C, and D) and need to
and 12e. make corrections to such form prior to filing with the IRS. In
If payment is being made by a transfer agent or a paying such a case, you should file an original Form 1042-S with the
agent acting as a withholding agent on behalf of a payer, correct information. Do not check the “Amended” box or
enter the chapters 3 and 4 status codes applicable to the indicate any amendment number. Provide a copy of the
status of the payer in boxes 16d and 16e. corrected Form 1042-S to the recipient. Note that the copies
of the Form 1042-S provided to the recipients (Copies B, C,
If you are a nominee that is the withholding agent for the and D) must match the copy of the Form 1042-S that is filed
amount of a PTP distribution subject to withholding under with the IRS.

Instructions for Form 1042-S (2025) 33

- 34 -

Enlarge image

Page 34 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

If any information you correct on Form(s) 1042-S changes is used to report the amount of withholding that must be paid
the information you previously reported on Form 1042, you over to the IRS. Section 6109 requires you to provide your
must also correct the Form 1042 by filing an amended return. identification number. Routine uses of this information
To do this, see the Form 1042 instructions. include giving it to the Department of Justice for civil and
criminal litigation, and to cities, states, the District of
If you are not filing electronically, follow these steps to Columbia, and U.S. commonwealths and territories for use in
amend a previously filed Form 1042-S. administering their tax laws. We may also disclose this
Step 1. Prepare a paper Form 1042-S. information to other countries under a tax treaty, to federal
• Enter all the correct information on the form, including the and state agencies to enforce federal nontax criminal laws, or
recipient name and address, money amounts, and codes. to federal law enforcement and intelligence agencies to
• Enter an “X” in the “Amended” box at the top of the form combat terrorism. If you fail to provide this information in a
and enter the amendment number. timely manner, you may be liable for penalties and interest.
Amended checkbox. Enter an “X” in the “Amended” You are not required to provide the information requested
checkbox of Copies A, B, C, D, and E only if you are on a form that is subject to the Paperwork Reduction Act
amending a Form 1042-S you previously filed with the IRS. unless the form displays a valid OMB control number. Books
You must provide statements to recipients showing the or records relating to a form or its instructions must be
corrections as soon as possible regardless of the change to retained as long as their contents may become material in the
the Form 1042-S. administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
Step 2. File the amended paper Form 1042-S with a Form section 6103.
1042-T. See the Form 1042-T instructions for information on
filing these forms. The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
If you fail to correct Form(s) 1042-S, you may be average time is 34 minutes.
CAUTION
! subject to a penalty. See Penalties, earlier. If you have comments concerning the accuracy of this
time estimate or suggestions for making this form simpler, we
Privacy Act and Paperwork Reduction Act Notice. We would be happy to hear from you. You can send us
ask for the information on this form to carry out the Internal comments from IRS.gov/FormComments. Or you can write to
Revenue laws of the United States. Sections 1441, 1442, Internal Revenue Service, Tax Forms and Publications, 1111
1446 (for PTPs), 1471, and 1472 require withholding agents Constitution Ave. NW, IR-6526, Washington, DC 20224. Do
to report and pay over to the IRS taxes withheld from certain not send the form to this address. Instead, see Where, When,
U.S. source income. Form 1042-S is used to report the and How To File, earlier.
amount of income and withholding to the payee. Form 1042

34 Instructions for Form 1042-S (2025)

- 35 -

Enlarge image

Page 35 of 42          Fileid: … orm-1042-s/2025/a/xml/cycle06/source                   11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Index
 
                                     Foreign country codes   2
A                                    Foreign financial institution    6       Q
Account holder    5                  Foreign person   6                       Qualified derivatives dealer               2 7, 
Account number    32                 Future developments    1                 Qualified intermediary  7
Account-by-account reporting    4                                             Qualified investment entities               11
Additional information  4            G                                        Qualified securities lender                8
Amended checkbox      24 34,         Global intermediary identification 
Amendment number       24              number  7                              R
Amount realized   5                  Gross income  25                         Recalcitrant account holder                 8
Amount subject to withholding   5                                             Recipient 8
Amounts not subject to               I                                        Recipient copies 3
  reporting 10                       Income code   24                         Recipient-by-recipient reporting                 20
Amounts paid by QIs    18            Instructions for withholding             Record retention 4
Amounts paid by QIs to certain         agents  24                             Reminders    1
  partnerships and trusts    20      Intermediary  7                          Requirement to withhold  12
Amounts paid to PAIs    19                                                     Chapter 3 withholding  12
Amounts subject to reporting    9    L                                         Chapter 4 withholding  12
Assistance  4                        LOB code  32                             Rounding off to whole dollars                24
Authorized agent  5
                                     M                                        S
B
                                     Multiple withholding agent rule    22    Specified federal procurement 
Before completing Form 1042-S     12                                           payments made to foreign 
Beneficial owner  5                  N                                         persons     21
                                     Net income    28                         Specified notional principal 
C                                                                              contract    8
                                     Non-exempt recipient   7
Chapter 3 or 4 status code   29 31,  Nonfinancial foreign entity      7       Specified U.S. person  8
Chapter indicator   26               Nonparticipating FFI 6                   Substantial U.S. owner  8
Combined reporting    4              Nonqualified intermediaries and          Substitute forms 4
Common errors     23                   flow-through entities  21               Penalty for filing incorrect substitute 
Country code  30 33,                 Nonqualified intermediary   7             form     4
                                     Nonresident alien  7
                                                                              T
D                                    Nonwithholding foreign partnership 
Deemed-compliant FFI    6              or nonwithholding foreign trust      9 Tax rates 27
Definitions 5                                                                 Territory FI 8
Deposit requirements    5            P                                        Truncation of TIN rules 4
Disregarded entity  6                Participating FFI 6
Dividend equivalent   6              Payee 7                                  U
                                     Payments by U.S. withholding             U.S. branch treated as a U.S. 
E                                      agents  13                              person   8
Electronic filing 3                  Payments made to                         Unique form identifier 2 24, 
Electronic reporting  3                non-recipients  16
  Hardship waiver   4                Payments to recipients  13               V
Excepted nonfinancial foreign        Penalties 22                             Valid tax rate table 28
  entity 7                             Failure to file electronically 23
Exempt beneficial owner    6           Failure to furnish to recipient  23    W
Exempt recipient  6                    Late filing 23                         Where, when, and how to file                3
Exemption code    26                 Presumption rules  7                     Who must file  3
Expatriate 6                         Privacy Act and Paperwork                Withholdable payment    9
Extension of time to file 3            Reduction Act Notice   34              Withholding agent    5
                                     Private arrangement intermediary       7 Withholding agent’s EIN  29
F                                    Pro-rata basis reporting                 Withholding allowance   28
                                       checkbox    33
                                                                              Withholding certificate 9
Federal tax withheld  28             PTP distribution  7
                                                                              Withholding foreign partnership or 
Financial institution 6              PTP interest  7                           withholding foreign trust                 9 21, 
FIRE System   2                      Publicly traded partnership      7 11,   Withholding rates 2
Fiscally transparent entity  6       Publicly traded trusts 11
Flow-through entity   6              Purpose of form   2
Foreign Account Tax Compliance 
  Act 2

                                                                                                                               35

- 36 -

Enlarge image

Page 36 of 42       Fileid: … orm-1042-s/2025/a/xml/cycle06/source                                                11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Appendix A
                                                          Box 1 Income Codes
Code                      Interest Income                           14            Real property income and natural resources royalties
01   Interest paid by U.S. obligors—general                         15            Pensions, annuities, alimony, and/or insurance premiums
02   Interest paid on real property mortgages                       16            Scholarship or fellowship grants
03   Interest paid to controlling foreign corporations              17            Compensation for independent personal services2
04   Interest paid by foreign corporations                          18            Compensation for dependent personal services2
05   Interest on tax-free covenant bonds                            19            Compensation for teaching2
22   Interest paid on deposit with a foreign branch of a            20            Compensation during studying and training2
     domestic corporation or partnership
29   Deposit interest                                               23            Other income
30   Original issue discount (OID)                                  24            Qualified investment entity (QIE) distributions of capital gains
31   Short-term OID                                                 25            Trust distributions subject to IRC section 1445 
33   Substitute payment—interest                                    26            Unsevered growing crops and timber distributions by a trust 
                                                                                  subject to IRC section 1445
51   Interest paid on certain actively traded or publicly offered 1 27            Publicly traded partnership distributions subject to IRC section 
     securities                                                                   1446(a)
54   Substitute payments—interest from certain actively 1           28            Gambling winnings3
     traded or publicly offered securities
                                                                    32            Notional principal contract income4
Code                      Dividend Income                           35            Substitute payment—other
06   Dividends paid by U.S. corporations—general                    36            Capital gains distributions
07   Dividends qualifying for direct dividend rate                  37            Return of capital
08   Dividends paid by foreign corporations                         38            Eligible deferred compensation items subject to IRC section 
                                                                                  877A(d)(1)
34   Substitute payment—dividends                                   39            Distributions from a nongrantor trust subject to IRC section 877A(f)
                                                                                  (1)
40   Other dividend equivalents under IRC section 871(m)            41            Guarantee of indebtedness
52   Dividends paid on certain actively traded or publicly 1        42            Earnings as an artist or athlete—no central withholding 5
     offered securities                                                           agreement
53   Substitute payments—dividends from certain actively 1          43            Earnings as an artist or athlete—central withholding agreement5
     traded or publicly offered securities
56   Dividend equivalents under IRC section 871(m) as a             44            Specified federal procurement payments
     result of applying the combined transaction rules
                                                                    50            Income previously reported under escrow procedure6
Code                      Other Income                              55            Taxable death benefits on life insurance contracts
09   Capital gains                                                  57            Amount realized under IRC section 1446(f)
10   Industrial royalties                                           58            Publicly traded partnership distributions—undetermined
11   Motion picture or television copyright royalties               59            Consent fees
12   Other royalties (for example, copyright, software,             60            Loan syndication fees
     broadcasting, endorsement payments)
13   Royalties paid on certain publicly offered securities1         61            Settlement payments

1 This code should only be used if the income paid is described in Regulations section 1.1441-6(c)(2) and the withholding agent has reduced the 
rate of withholding under an income tax treaty without the recipient providing a U.S. TIN or an FTIN. 
2 If compensation that would otherwise be covered under Income Codes 17 through 20 is directly attributable to the recipient's occupation as an 
 artist or athlete, use Income Code 42 or 43 instead.
3 Subject to 30% withholding rate unless the recipient is from one of the treaty countries listed under Gambling winnings (Income Code 28) in Pub. 
 515.
4 Use appropriate Interest Income Code for interest from a notional principal contract where nonperiodic payment(s) is treated as a loan.
5 Income Code 43 should only be used if Letter 4492, Venue Notification, has been issued by the IRS (otherwise, use Income Code 42 for earnings 
 as an artist or athlete). If Income Code 42 or 43 is used, Recipient Code 22 (artist or athlete) should be used instead of Recipient Code 16 
 (individual), 15 (corporation), or 08 (partnership other than withholding foreign partnership, publicly traded partnership, or partnership QDD).
6 Use only to report gross income the tax for which is being deposited in the current year because such tax was previously escrowed for chapters 3 
 and 4 and the withholding agent previously reported the gross income in a prior year and checked the box to report the tax as not deposited under 
 the escrow procedure. See the instructions for this form for further explanation.

     36

- 37 -

Enlarge image

Page 37 of 42  Fileid: … orm-1042-s/2025/a/xml/cycle06/source                                                     11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Appendix B
                            Exemption Codes, Recipient Status Codes, and Box 13j LOB Codes
Boxes 3a and 4a. Exemption code (applies if the tax rate entered  Boxes 12b, 12c, 13f, 13g, 15b, 15c, 16d, and 16e. Chapter 3 and 
in box 3b or 4b is 00.00).                                                  Chapter 4 Status Codes (used to identify the type of Withholding 
                                                                            Agent, Recipient, Intermediary, or Payer).
Code      Authority for Exemption                                           Chapter 3  Status Codes
Chapter 3                                                                   05        U.S. branch—treated as U.S. person10
01        Effectively connected income                                      06        U.S. branch—not treated as U.S. person11
02        Exempt under IRC7                                                 07        U.S. branch—ECI presumption applied
                                                                            08        Partnership other than withholding foreign partnership, 
03        Income is not from U.S. sources                                             publicly traded partnership, or partnership QDD
04        Exempt under tax treaty                                           09        Withholding foreign partnership
05        Portfolio interest exempt under IRC                               10        Trust other than withholding foreign trust
06        QI that assumes primary withholding responsibility                11        Withholding foreign trust
07        WFP or WFT                                                        12        Qualified intermediary
08        U.S. branch treated as U.S. person                                13        Qualified securities lender—qualified intermediary
10        QI represents that income is exempt                               14        Qualified securities lender—other
11        QSL that assumes primary withholding responsibility               15        Corporation
12        Payee subjected to chapter 4 withholding                          16        Individual
22        QDD that assumes primary withholding responsibility               17        Estate
23        Exempt under section 897(l)                                       18        Private foundation
24        Exempt under section 892                                          19        International organization
                                                                            20        Tax exempt organization (section 501(c) entities)
Chapter 4                                                                   21        Unknown recipient
13        Grandfathered payment                                             22        Artist or athlete
14        Effectively connected income                                      23        Pension
15        Payee not subject to chapter 4 withholding                        24        Foreign central bank of issue
16        Excluded nonfinancial payment                                     25        Nonqualified intermediary
17        Foreign Entity that assumes primary withholding                   26        Hybrid entity making treaty claim
          responsibility
18        U.S. payees of participating FFI or registered 
          deemed-compliant FFI                                              35        Qualified derivatives dealer
19        Exempt from withholding under IGA8                                36        Foreign government—integral part
20        Dormant account9                                                  37        Foreign government—controlled entity
21        Other payment not subject to chapter 4 withholding                38        Publicly traded partnership
                                                                            39        Disclosing qualified intermediary
                                                                            40        Partnership QDD12
                                                                            41        U.S. government entity or tax exempt entity (other than 13
                                                                                      section 501(c) entities)
                                                                                      Pooled Reporting Codes14
                                                                            27        Withholding rate pool—general
                                                                            28        Withholding rate pool—exempt organization
                                                                            29        PAI withholding rate pool—general
                                                                            30        PAI withholding rate pool—exempt organization
                                                                            31        Agency withholding rate pool—general
                                                                            32        Agency withholding rate pool—exempt organization

7 This code should only be used if no other specific chapter 3 exemption code applies.
8 Use only to report a U.S. reportable account or nonconsenting U.S. account that is receiving a payment subject to chapter 3 withholding.
9 Use only if applying the escrow procedure for dormant accounts under Regulations section 1.1471-4(b)(6).
10 This code can be used by a territory FI that is treated as a U.S. person.
11 This code can be used by a territory FI that is not treated as a U.S. person.
12 Status code 40 should only be used for the partnership's allocations to its partners with respect to its (or its branch's) QDD's activities. The 
  partnership should report all other allocations with respect to its partners using status code 8, 9, or 38, as applicable. When the partnership is 
  transacting in its QDD capacity, it should use status code 35.
13 This includes a college, a university, or another U.S entity exempt from tax under an Internal Revenue Code section other than section 501(c). This 
  code is only applicable for reporting the chapter 3 status of a withholding agent (box 12b).
14 Codes 27 through 32 should only be used by a QI, QSL, WP, or WT. A QI acting as a QDD may use only code 27 or 28.

                                                                                                                                                     37

- 38 -

Enlarge image

Page 38 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Appendix B (continued)
Exemption Codes, Recipient Status Codes, and Box 13j LOB Codes (continued)
Boxes 12b, 12c, 13f, 13g, 15b, 15c, 16d, and 16e. Chapter 3 and
Chapter 4 Status Codes (continued).
34 Nonconsenting U.S. account
Chapter 4 Status Codes 35 Sponsored direct reporting NFFE
01 U.S. withholding agent—FI 36 Excepted inter-affiliate FFI
02 U.S. withholding agent—other 37 Undocumented preexisting obligation
03 Territory FI—not treated as U.S. person 38 U.S. branch—ECI presumption applied
04 Territory FI—treated as U.S. person 39 Account holder of excluded financial account15
05 Participating FFI—other 40 Passive NFFE reported by FFI16
06 Participating FFI—reporting Model 2 FFI 41 NFFE subject to 1472 withholding
07 Registered deemed-compliant FFI—reporting Model 1 50 U.S. withholding agent—foreign branch of FI
FFI
08 Registered deemed-compliant FFI—sponsored entity Pooled Reporting Codes
09 Registered deemed-compliant FFI—other 42 Recalcitrant pool—no U.S. indicia
10 Certified deemed-compliant FFI—other 43 Recalcitrant pool—U.S. indicia
11 Certified deemed-compliant FFI—FFI with low value 44 Recalcitrant pool—dormant account
accounts
12 Certified deemed-compliant FFI—nonregistering local 45 Recalcitrant pool—U.S. persons
bank
13 Certified deemed-compliant FFI—sponsored entity 46 Recalcitrant pool—passive NFFEs
14 Certified deemed-compliant FFI—investment entity that 47 Nonparticipating FFI pool
does not maintain financial accounts
15 Nonparticipating FFI 48 U.S. payees pool
16 Owner-documented FFI 49 QI-recalcitrant pool—general17
17 U.S. branch—treated as U.S. person
18 U.S. branch—not treated as U.S. person (reporting Box 13j. LOB Code (enter the code that best describes the
under section 1471) applicable limitation on benefits (LOB) category that
qualifies the taxpayer for the requested treaty benefits).
19 Passive NFFE identifying substantial U.S. owners
20 Passive NFFE with no substantial U.S. owners Code LOB Treaty Category
21 Publicly traded NFFE or affiliate of publicly traded NFFE 02 Government—contracting state/political subdivision/local
authority
22 Active NFFE 03 Tax exempt pension trust/pension fund
23 Individual 04 Tax exempt/charitable organization
24 Section 501(c) entities 05 Publicly traded corporation
25 Excepted territory NFFE 06 Subsidiary of publicly traded corporation
26 Excepted NFFE—other 07 Company that meets the ownership and base erosion test
27 Exempt beneficial owner 08 Company that meets the derivative benefits test
28 Entity wholly owned by exempt beneficial owners 09 Company with an item of income that meets the active trade or
business test
29 Unknown recipient 10 Discretionary determination
30 Recalcitrant account holder 11 Other
31 Nonreporting IGA FFI 12 No LOB article in treaty
32 Direct reporting NFFE
33 U.S. reportable account

15 This code should only be used if income is paid to an account that is excluded from the definition of financial account under Regulations section
1.1471-5(b)(2) or under Annex II of the applicable Model 1 IGA or Model 2 IGA.
16 This code should only be used when the withholding agent has received a certification on the FFI withholding statement of a participating FFI or
registered deemed-compliant FFI that maintains the account that the FFI has reported the account held by the passive NFFE as a U.S. account (or
U.S. reportable account) under its FATCA requirements. The withholding agent must report the name and GIIN of such FFI in boxes 15d and 15e.
17 This code should only be used by a withholding agent that is reporting a payment (or portion of a payment) made to a QI with respect to the QI’s
recalcitrant account holders.

- 39 -

Enlarge image

Page 39 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Appendix C
Comprehensive analysis of Example 1 under Payments directly to beneficial owners or partners, earlier.

DIRECT PAYMENT TO BENEFICIAL OWNER
WA, a U.S. corporate withholding agent who is an issuer of stock and not a financial institution, makes a $1,000 payment of U.S. source dividends to
A, a foreign individual who has provided a Form W-8BEN to WA and who is not eligible for a reduced rate of chapter 3 withholding under a treaty.
Before completing Form 1042-S, WA takes the following steps.
Step 1: Because the payment is a payment described under Amounts Subject to Reporting on Form 1042-S, earlier, WA determines it has a
Form 1042-S filing obligation.
Step 2: Because WA is making a payment of U.S. source FDAP income, WA determines the payment meets the definition of both a “withholdable
payment” under chapter 4 and “an amount subject to withholding” under chapter 3.
Step 3: Because the payment is being made to an individual (and not a nonparticipating FFI or an NFFE that is not an excepted NFFE that has
failed to disclose its substantial U.S. owners (or certify that it has no substantial U.S. owners) (see definitions of these terms)), WA
determines that the payment is not subject to chapter 4 withholding. Because the payment is not subject to chapter 4 withholding but is
an amount subject to withholding under chapter 3, WA determines that chapter 3 is the correct chapter indicator. WA will thus enter "3" in
box 3 (chapter indicator).
Note. Although the payment is properly classified as a chapter 3 payment, WA must complete certain boxes on Form 1042-S that pertain to
chapter 4 (see explanations for boxes 4a, 4b, and 13g below).
WA must file a Form 1042-S for A and complete it as follows.
Caution: Be sure to read the instructions for each box or field in its entirety before completing a box or field on Form 1042-S.
WA must provide a unique form identifier in the applicable entry field at the top of Form 1042-S. For additional information, including unique form
identifier requirements, see Unique Form Identifier, earlier.
Box Description Required Entry Comments
WA enters “06” (dividends paid by U.S. corporations—general), which is the appropriate
1 Income code “06” two-digit code from the list of Income Codes provided in Appendix A.
2 Gross income “1000” WA enters the gross amount paid (in whole dollars), including withheld tax.
3 Chapter indicator “3” WA enters “3” to indicate that amounts were withheld pursuant to chapter 3.
WA enters “00” because an amount was withheld under chapter 3 and the tax rate is greater
Chapter 3 exemption than zero and is not due to backup withholding (see the instructions for boxes 3a and 4a,
3a code “00” earlier).
WA enters “30.00” consistent with the formatting specified in the instructions for boxes 3b
3b Chapter 3 tax rate “30.00” and 4b, earlier.
WA enters “15” (payee not subject to chapter 4 withholding), which is the appropriate
two-digit code from the list of Exemption Codes provided in these instructions.
Note. WA uses exemption code 15 because the payment is a withholdable payment, but
has not been withheld upon under chapter 4 because of the payee's chapter 4 status (an
Chapter 4 exemption individual and not a person subject to chapter 4 withholding as explained in the instructions
4a code “15” for boxes 3a and 4a, earlier).
WA enters “00.00” because the amount reported in box 2 is not subject to chapter 4
4b Chapter 4 tax rate “00.00” withholding. See the instructions for boxes 3b and 4b, earlier.
WA leaves box 5 blank because the income code it is reporting in box 1 is not one of the
codes specified in the instructions for which box 5 reporting is required. See the instructions
5 Withholding allowance for box 5, earlier.
6 Net income WA leaves box 6 blank because it did not enter an amount in box 5.
7a Federal tax withheld “300” WA enters “300” (30% of $1,000).
Check if federal tax
withheld was not
deposited with the IRS
because escrow
7b procedures were applied WA does not check the box because it is not using an escrow procedure.
Check if withholding
occurred in subsequent
year with respect to a
7c partnership interest WA does not check the box because it did not withhold in a subsequent year.
Tax withheld by other
8 agents WA leaves box 8 blank because tax was not withheld by other withholding agents.
Overwithheld tax repaid WA leaves box 9 blank because it did not repay overwithheld tax to the recipient under the
to recipient pursuant to reimbursement procedure or the set-off procedure. For more information, see the
9 adjustment procedures instructions for box 9, earlier.
10 Total withholding credit “300” WA enters “300” (combining boxes 7a, 8, and 9).
Tax paid by withholding WA leaves box 11 blank because it withheld on the payment to the recipient (as opposed to
agent (amounts not paying the tax from its own funds). For more information, see the instructions for box 11,
11 withheld) earlier.
Specific
information Although WA's EIN is not specified in this example, this is a required field that WA must
12a Withholding agent's EIN required complete.

- 40 -

Enlarge image

Page 40 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Appendix C (continued)
Box Description Required Entry Comments
WA enters “15” in box 12b and “02” in box 12c because it is a U.S. corporate withholding
Withholding agent's agent that is not a financial institution.
chapter 3 and chapter 4 Note. WA must enter both a chapter 3 and a chapter 4 withholding agent status code
12b–c status codes “15” and “02” regardless of the type of payment being reported.
Withholding agent's
12d name “WA” WA must enter its complete name.
Withholding agent's WA leaves this box blank because a U.S. withholding agent is generally not required to
12e GIIN obtain a GIIN. See Global intermediary identification number and Box 12e, earlier, for details.
Withholding agent's WA enters “US” as the country code because it is a U.S. withholding agent. See the
12f country code “US” instructions for box 12f, earlier.
Withholding agent's
foreign tax identification WA leaves this box blank because it is a U.S. withholding agent and it does not have an FTIN
12g number, if any or a country of residence other than the United States.
Specific Although WA's address is not specified in this example, this is a required field that WA must
Withholding agent's information complete. See Boxes 12d Through 12i, earlier, for requirements.
12h–I address required
13a Recipient's name “A” WA enters the recipient's name.
Specific Although the recipient's country of residency is not specified in this example, this is a
Recipient's country information required field that WA must complete. See the instructions for box 13b, earlier, for
13b code required requirements.
Specific Although the recipient's address is not specified in this example, this is a required field that
information WA must complete. See Boxes 13c and 13d, earlier, for requirements.
13c–d Recipient's address required
The recipient's U.S. TIN is not specified in this example. However, given the facts used in this
example, the recipient's U.S. TIN is generally not required because A is not a type of
recipient described in the instructions for boxes 13e and 13h, earlier, for which this TIN is
required (for example, A is not claiming a reduced rate of, or exemption from, tax under a tax
Recipient's U.S. TIN, if treaty between the recipient's country of residence and the United States). However, WA
13e any must enter the recipient's U.S. TIN if WA knows it or if it was provided to WA on a Form W-8.
WA enters chapter 3 status code “16” (individual), which is the appropriate two-digit code
from the list of chapter 3 status codes provided in Appendix B.
Recipient's chapter 3 Note. A withholding agent must enter a chapter 3 status code for all “amounts subject to
13f status code “16” reporting under chapter 3.”
WA enters chapter 4 status code “23” (individual), which is the appropriate two-digit code
from the list of chapter 4 status codes provided in Appendix B.
Note. A withholding agent must enter a chapter 4 status code for the recipient only if the
payment is a withholdable payment (as is the case in this example) or when a participating
Recipient's chapter 4 FFI or registered deemed-compliant FFI is reporting a chapter 4 withholding rate pool of U.S.
13g status code “23” payees.
WA leaves box 13h blank because it only applies for chapter 4 reporting purposes. See
13h Recipient's GIIN Global intermediary identification number and the instructions for boxes 13e and 13h, earlier.
Recipient's foreign tax
identification number, if The recipient's FTIN is not required because A is not a type of recipient described in the
13i any instructions for box 13i, earlier, for which the FTIN is required.
13j LOB code WA leaves box 13j blank because the recipient is an individual (not an entity).
Recipient's account
13k number WA leaves box 13k blank because WA is not a financial institution.
13l Recipient's date of birth WA leaves box 13l blank because WA is not a financial institution.
Primary withholding
14a–b agent's information WA leaves these boxes blank because tax was not withheld by other withholding agents.
WA leaves these boxes blank because WA is making a direct payment to the recipient and
15a–I Intermediary information there are no other withholding agents.
WA leaves these boxes blank because WA is making a direct payment to the recipient and
16a–e Payer's information there are no other payers involved.
Although not specified in this example, WA enters in these boxes any information relating to
17a–c State income taxes any state income tax withheld.

- 41 -

Enlarge image

Page 41 of 42              Fileid: … orm-1042-s/2025/a/xml/cycle06/source                                                11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Appendix D
Comprehensive example of how to complete Form 1042-S for gambling winnings.

                                                   DIRECT PAYMENT TO BENEFICIAL OWNER
ABC Casino ("WA"), a U.S. corporate withholding agent that is not a financial institution, makes a $10,000 payment of gambling winnings to A, a 
foreign individual who has provided a Form W-8BEN to WA establishing foreign status. The gambling winnings are subject to 30% withholding as 
there is no exemption available under the Internal Revenue Code or applicable treaty. Before completing Form 1042-S, WA takes the following steps. 
Step 1: Because the payment is a payment described under Amounts Subject to Reporting on Form 1042-S, earlier, WA determines it has a Form 
1042-S filing obligation. 
Step 2: Because WA is making a payment of U.S. source FDAP income, WA determines the payment meets the definition of “an amount subject to 
withholding” under chapter 3. Because gambling winnings are not treated as a “withholdable payment” under chapter 4, as it is an excluded 
nonfinancial payment under Regulations section 1.1473-1(a)(4)(iii), WA determines that the payment is not subject to chapter 4 withholding. 
Step 3: Because the payment is not subject to chapter 4 withholding but is an amount subject to withholding under chapter 3, WA determines that 
chapter 3 is the correct chapter indicator. WA will thus enter "3" in box 3 (chapter indicator). 
Note. Although the payment is properly classified as a chapter 3 payment, WA must complete certain boxes on Form 1042-S that pertain to 
chapter 4 (see explanations for boxes 4a, 4b, and 13g below). 
WA must file a Form 1042-S for A and complete it as follows. 
Caution: Be sure to read the instructions for each box or field in its entirety before completing a box or field on Form 1042-S. 
WA must provide a unique form identifier in the applicable entry field at the top of Form 1042-S. For additional information, including unique form 
identifier requirements, see Unique Form Identifier, earlier.
     Box                     Description                      Required Entry                                            Comments 
                                                                                                 WA enters “28” (Gambling winnings), which is the 
                                                                                                 appropriate two-digit code from the list of income codes 
     1                       Income code                      “28”                               provided in Appendix A.
                                                                                                 WA enters the gross amount paid (in whole dollars), 
     2                        Gross income                    “10,000”                           including withheld tax. 
                                                                                                 WA enters “3” to indicate that amounts were withheld 
      3                       Chapter indicator               “3”                                pursuant to chapter 3. 
                                                                                                 WA enters “00” because an amount was withheld under 
                                                                                                 chapter 3 and the tax rate is greater than zero and is 
                                                                                                 not due to backup withholding (see the instructions for 
      3a                  Chapter 3 exemption code            “00”                               boxes 3a and 4a, earlier).
                                                                                                 WA enters “30.00” consistent with the formatting 
      3b                     Chapter 3 tax rate               “30.00”                            specified in the instructions for boxes 3b and 4b, earlier.
                                                                                                 WA enters “16” (excluded nonfinancial payment), which 
                                                                                                 is the appropriate two-digit code from the list of 
      4a                   Chapter 4 exemption code           “16”                               Exemption Codes provided in Appendix B. 
                                                                                                 WA enters “00.00” because the amount reported in 
                                                                                                 box 2 is not subject to chapter 4 withholding. See the 
      4b                      Chapter 4 tax rate              “00.00”                            instructions for boxes 3b and 4b, earlier.
                                                                                                 WA leaves box 5 blank because the income code it is 
                                                                                                 reporting in box 1 is not one of the codes specified in 
                                                                                                 the instructions for which box 5 reporting is required. 
     5                       Withholding allowance                                               See the instructions for box 5, earlier.
                                                                                                 WA leaves box 6 blank because it did not enter an 
     6                       Net income                                                          amount in box 5.
     7a                      Federal tax withheld             “3,000”                            WA enters “3,000” (30% of $10,000).
           Check if federal tax withheld was not 
           deposited with the IRS because escrow                                                 WA does not check the box because it is not using the 
     7b                   procedures were applied                                                escrow procedure.
           Check if withholding occurred in 
           subsequent year with respect to a                                                     WA does not check the box because it did not withhold 
     7c                      partnership interest                                                in a subsequent year.
                                                                                                 WA leaves box 8 blank because tax was not withheld 
     8                    Tax withheld by other agents                                           by other withholding agents.
                                                                                                 WA leaves box 9 blank because it did not repay 
                                                                                                 overwithheld tax to the recipient under the 
           Overwithheld tax repaid to recipient                                                  reimbursement procedure or the set-off procedure. For 
     9     pursuant to adjustment procedures                                                     more information, see the instructions for box 9, earlier. 
     10                      Total withholding credit         “3,000”                            WA enters “3,000” (combining boxes 7a, 8, and 9).
                                                                                                 WA leaves box 11 blank because it withheld on the 
                                                                                                 payment to the recipient (as opposed to paying the tax 
           Tax paid by withholding agent (amounts                                                from its own funds). For more information, see the 
     11                      not withheld)                                                       instructions for box 11, earlier.
                                                                                                 Although WA's EIN is not specified in this example, this 
     12a                     Withholding agent's EIN          Specific information required is a required field that WA must complete.
                                                                                                 WA enters “15” in box 12b and “02” in box 12c because 
                                                                                                 it is a U.S. corporate withholding agent that is not a 
                                                                                                 financial institution. 
                                                                                                 Note. WA must enter both a chapter 3 and a chapter 4 
           Withholding agent's chapter 3 and                                                     withholding agent status code regardless of the type of 
     12b–c                   chapter 4 status codes           “15” and “02”                      payment being reported.

                                                                                                                                                         41

- 42 -

Enlarge image

Page 42 of 42 Fileid: … orm-1042-s/2025/a/xml/cycle06/source 11:29 - 4-Dec-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Appendix D (continued)
Box Description Required Entry Comments
12d Withholding agent's name “ABC Casino” WA must enter its complete name.
WA leaves this box blank because a U.S. withholding agent is generally not required to
obtain a GIIN. See Global intermediary identification number and Box 12e, earlier, for
12e Withholding agent's GIIN details.
Withholding agent's WA enters “US” as the country code because it is a U.S. withholding agent. See the
12f country code “US” instructions for box 12f, earlier.
Withholding agent's
foreign tax identification WA leaves this box blank because it is a U.S. withholding agent and it does not have an
12g number, if any FTIN or a country of residence other than the United States.
Specific
Withholding agent's information Although WA's address is not specified in this example, this is a required field that WA
12h–I address required must complete. See Boxes 12d Through 12i, earlier, for requirements.
13a Recipient's name “A” WA enters the recipient's name.
Specific Although the recipient's country of residency is not specified in this example, this is a
information required field that WA must complete. See the instructions for box 13b, earlier, for
13b Recipient's country code required requirements.
Specific
information Although the recipient's address is not specified in this example, this is a required field
13c–d Recipient's address required that WA must complete. See Boxes 13c and 13d, earlier, for requirements.
The recipient's U.S. TIN is not specified in this example. However, given the facts used in
this example, the recipient's U.S. TIN is generally not required because A is not a type of
recipient described in the instructions for boxes 13e and 13h, earlier, for which this TIN is
required (for example, A is not claiming a reduced rate of, or exemption from, tax under a
tax treaty between the recipient's country of residence and the United States). However,
Recipient's U.S. TIN, if WA must enter the recipient's U.S. TIN if WA knows it or if it was provided to WA on a
13e any Form W-8.
WA enters chapter 3 status code “16” (individual), which is the appropriate two-digit code
from the list of chapter 3 status codes provided in Appendix B.
Recipient's chapter 3 Note. A withholding agent must enter a chapter 3 status code for all “amounts subject to
13f status code “16” reporting under chapter 3.”
WA is not required to provide the chapter 4 status code of the recipient, given that the
payment being reported is not a withholdable payment.
Note. A withholding agent must enter a chapter 4 status code for the recipient only if the
Recipient's chapter 4 payment is a withholdable payment or when a participating FFI or registered
13g status code deemed-compliant FFI is reporting a chapter 4 withholding rate pool of U.S. payees.
WA leaves box 13h blank because it only applies for chapter 4 reporting purposes. See
Global intermediary identification number and the instructions for boxes 13e and 13h,
13h Recipient's GIIN earlier.
Recipient's foreign tax
identification number, if The recipient's FTIN is not required because A is not a type of recipient described in the
13i any instructions for box 13i, earlier, for which the FTIN is required.
13j LOB code WA leaves box 13j blank because the recipient is an individual (not an entity).
Recipient's account
13k number WA leaves box 13k blank because WA is not a financial institution.
13l Recipient's date of birth WA leaves box 13l blank because WA is not a financial institution.
Primary withholding
14a–b agent's information WA leaves these boxes blank because tax was not withheld by other withholding agents.
WA leaves these boxes blank because WA is making a direct payment to the recipient
15a–I Intermediary information and there are no other withholding agents.
WA leaves these boxes blank because WA is making a direct payment to the recipient
16a–e Payer's information and there are no other payers involved.
Although not specified in this example, WA enters in these boxes any information relating
17a–c State income taxes to any state income tax withheld.

PDF file checksum: 3173076082

(Plugin #1/10.13/13.0)