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                                                                                                             Department of the Treasury
                                                                                                             Internal Revenue Service
2024

Instructions for Form 1042-S

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

Contents                                                                  Page Future Developments
General Instructions      . . . . . . . . . . . . . . . . . . . . . . . . . 2
                                                                               For the latest information about developments related to 
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2  Form 1042-S and its instructions, such as legislation enacted 
Who Must File     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  after they were published, go to IRS.gov/Form1042S.
Where, When, and How To File              . . . . . . . . . . . . . . . . . 3
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5  What’s New
Amounts Subject to Reporting on Form 1042-S . . . . . .                     9  Reporting of distributions of publicly traded partner-
Amounts That Are Not Subject to Reporting on                                   ships (PTPs). The instructions for boxes 16a through 16e 
Form 1042-S           . . . . . . . . . . . . . . . . . . . . . . . . . .   10 state that a withholding agent for a PTP distribution is 
                                                                               required to provide the applicable information for the PTP in 
Distributions Attributable to Dispositions of U.S. 
                                                                               the payer's box (including code 38) when reporting the 
Real Property Interests by Publicly Traded                                     payment of a PTP distribution using income code 27, 57, or 
Trusts and Qualified Investment Entities                    . . . . . . .   11 58. These instructions have been updated to clarify that the 
Publicly Traded Partnerships (Sections 1446(a)                                 requirement to report the PTP's information with respect to its 
and (f) Withholding Tax)              . . . . . . . . . . . . . . . . . .   11 distribution does not apply to a withholding agent paying a 
Requirement To Withhold           . . . . . . . . . . . . . . . . . . . .   12 PTP distribution to a Qualified Intermediary (QI) when 
Before Completing Form 1042-S               . . . . . . . . . . . . . . .   12 reporting to the QI in reporting pools on Forms 1042-S with 
                                                                               respect to the distribution. Under these instructions, this 
Payments by U.S. Withholding Agents                 . . . . . . . . . . .   13
                                                                               exception also applies to a QI reporting a PTP distribution 
Amounts Paid by QIs       . . . . . . . . . . . . . . . . . . . . . . . .   18 using reporting pools. See Boxes 16a Through 16e, Payer's 
Amounts Paid by Nonqualified Intermediaries and                                Name, TIN, GIIN, and Status Code, later. For this change and 
Flow-Through Entities . . . . . . . . . . . . . . . . . . . .               21 other clarifications for the reporting of PTP distributions, see 
Multiple Withholding Agent Rule             . . . . . . . . . . . . . . .   22 Publicly Traded Partnerships (Sections 1446(a) and (f) 
Penalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23 Withholding Tax), later.
Avoid Common Errors . . . . . . . . . . . . . . . . . . . . . . .           23 Reporting of a GIIN. The 2023 Form 1042-S instructions 
Specific Instructions for Withholding Agents                . . . . . . .   24 contained a note, which stated that if a payment was properly 
                                                                               classified with a chapter 3 indicator in box 3, the withholding 
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . . .             24 agent was not required to enter a GIIN in boxes 12e, 13h, 
Amended Checkbox . . . . . . . . . . . . . . . . . . . . . . . .            24 15e, and 16c. This exception to the reporting of a GIIN has 
Amendment Number          . . . . . . . . . . . . . . . . . . . . . . . .   24 been removed from these instructions. See the instructions 
Box 1, Income Code . . . . . . . . . . . . . . . . . . . . . . . .          24 for the above boxes for when a GIIN is required. See the 
Box 2, Gross Income       . . . . . . . . . . . . . . . . . . . . . . . .   25 instructions for boxes 16a through 16e for when a GIIN is 
                                                                               required for a PTP reported in box 16a.
Box 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
Box 5, Withholding Allowance            . . . . . . . . . . . . . . . . .   28 Reminders
Boxes 7a Through 11, Federal Tax Withheld . . . . . . .                     28 Electronic filing. A withholding agent that is not a financial 
Box 12a, Withholding Agent's Employer                                          institution is required to file Forms 1042-S electronically if it is 
Identification Number (EIN) . . . . . . . . . . . . . . . .                 29 either required to file at least 10 information returns during 
Boxes 12d Through 12i, Withholding Agent's                                     the year or is a partnership with more than 100 partners. See 
Name, GIIN, Country Code, Foreign TIN (if                                      Regulations section 301.6011-2.
any), and Address             . . . . . . . . . . . . . . . . . . . . . .   29 Income code 56.    Income code 56 was added to the 2022 
Boxes 15a Through 15i, Intermediary/                                           Form 1042-S to address section 871(m) transactions 
Flow-Through Entity's Name, Status Code,                                       resulting from combining transactions under Regulations 
Country Code, Address, EIN, GIIN, and                                          section 1.871-15(n) (including as modified by transition relief 
Foreign Tax Identification Number                   . . . . . . . . . . .   32 under Notice 2022-37, 2022-37 I.R.B. 234, available at 
Boxes 16a Through 16e, Payer's Name, TIN, GIIN,                                IRS.gov/irb/2022-37_IRB#NOT-2022-37, when applicable). 
and Status Code           . . . . . . . . . . . . . . . . . . . . . . . .   33 Income code 56 should be used for any dividend equivalent 
Boxes 17a Through 17c, State Income Tax                                        pursuant to a transaction that is a section 871(m) transaction 
Withheld and Related Information                    . . . . . . . . . . .   33 as a result of combining transactions, even if another income 
                                                                               code could apply to the dividend equivalent. See Box 1, 
Amended Forms . . . . . . . . . . . . . . . . . . . . . . . . . . .         33 Income Code, later, for additional information.
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section references are to the Internal Revenue Code unless                     Reliance on proposed regulations reducing burden un-
otherwise noted.                                                               der FATCA and chapter 3.   On December 18, 2018, the IRS 
                                                                               and the Department of the Treasury issued proposed 
                                                                               regulations (REG-132881-17) to reduce taxpayer burden with 

Feb 2, 2024                                                               Cat. No. 64278A

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respect to certain requirements under chapters 3 and 4. The Filing Information Returns Electronically (FIRE) System.
proposed regulations provide that, under section 7805(b)(1) For files submitted on the FIRE System, it is the responsibility
(C), taxpayers may generally rely on the proposed of the filer to check the status within 5 business days to verify
regulations until final regulations are issued. Specifically, for the results of the transmission. The IRS will not mail error
purposes of these instructions, a withholding agent may rely reports for files that are bad. See Pub. 1187, Specifications
on the following provisions in connection with completing for Electronic Filing of Form 1042-S, Foreign Person’s U.S.
Form 1042-S. Source Income Subject to Withholding.
• Withholding and reporting in a subsequent year. A
partnership or trust that is permitted to withhold in a Unique form identifier. Withholding agents must assign a
subsequent year with respect to a foreign partner's or unique identifying number to each Form 1042-S they file. This
beneficiary's share of income for the prior year may identifying number is used, for example, to identify which
designate the deposit of the withholding as attributable to the information return is being corrected or amended when
preceding year and in some cases a partnership is provided multiple information returns are filed by a withholding agent
an extended due date for filing and furnishing Form 1042-S. with respect to the same recipient. The unique identifying
See the instructions for box 7c, later. number cannot be the recipient's U.S. or foreign TIN. The
• Adjustments to overwithholding under the unique identifying number must be numeric. The length of a
reimbursement and set-off procedures. A withholding given identifying number must be exactly 10 digits. The
agent may make adjustments to overwithholding using either identifying number must be unique to each original Form
the reimbursement or set-off procedures until the extended 1042-S filed for the current year. The identifying number can
due date for filing Form 1042-S (unless the Form 1042-S has be used on a new original form in a subsequent year.
already been filed or furnished). Additionally, a withholding List of foreign country codes. Form 1042-S filers must
agent may use the extended due date for filing a Form 1042 use the same list of country codes used on other IRS forms
to claim a credit for any adjustments made to (for example, Forms 926, 1118, 3520, and 8805). This list of
overwithholding. See the instructions for box 9, later. foreign country codes may be found at IRS.gov/
Withholding rates. The rate of withholding under section CountryCodes.
1446(a) by a PTP on a distribution of income effectively
connected to a U.S. trade or business is 21% for corporate Note. Although the list of country codes is maintained by
partners and 37% for all other partners. Modernized e-File, Form 1042-S filers who file electronically
will continue to use the FIRE System. See the instructions for
The rate of withholding by a qualified investment entity Electronic Reporting, later. Also, if applicable, the option to
(QIE) on a distribution to a nonresident alien or foreign file Form 1042-S by paper is still available.
corporation that is treated as gain from the sale or exchange
of a U.S. real property interest by the shareholder is 21%.
General Instructions
Qualified derivatives dealers (QDDs). These instructions
provide guidance on how to report payments on Form 1042-S Purpose of Form
that are made to and by QDDs. See Payments by U.S.
Use Form 1042-S to report income described under Amounts
Withholding Agents and Amounts Paid by QIs, later. For more
Subject to Reporting on Form 1042-S, later, and to report
information on the withholding and reporting requirements
amounts withheld under chapter 3 or chapter 4.
associated with payments made to and by QDDs, see Rev.
Proc. 2022-43, 2022-52 I.R.B. 570, available at IRS.gov/irb/ Use Form 1042-S to report specified federal procurement
2022-52_IRB#RP-2022-43 . See also Notice 2022-37, payments paid to foreign persons that are subject to
2022-37 I.R.B. 234 available at IRS.gov/irb/ withholding under section 5000C.
2022-37_IRB#NOT-2022-37, which extends the phase-in
period provided in Notice 2020-2, 2020-3 I.R.B. 327, Use Form 1042-S to report payments of eligible deferred
available at IRS.gov/irb/2020-03_IRB#NOT-2020-2, for compensation items or distributions from nongrantor trusts to
certain provisions of the section 871(m) regulations for 2 covered expatriates that are subject to withholding under
years (including 2024), including for certain requirements of a section 877A. See Box 1, Income Code, later.
QDD. Use Form 1042-S to report certain distributions that are
Foreign Account Tax Compliance Act (FATCA). Form made by publicly traded trusts and QIEs (as defined under
1042-S reports payments and amounts withheld under the section 897(h)(4)(A)). See Distributions Attributable to
provisions commonly known as FATCA or chapter 4 of the Dispositions of U.S. Real Property Interests by Publicly
Internal Revenue Code (chapter 4) in addition to those Traded Trusts and Qualified Investment Entities, later.
amounts required to be reported under chapter 3 of the Use Form 1042-S to report distributions of effectively
Internal Revenue Code (chapter 3). Form 1042-S requires connected income (ECI) by a PTP or nominee and amounts
the reporting of an applicable exemption to the extent realized paid on certain transfers of PTP interests. See
withholding under chapter 4 did not apply to a payment of Publicly Traded Partnerships (Section 1446(a) and (f)
U.S. source fixed or determinable annual or periodical Withholding Tax), later.
(FDAP) income (including deposit interest) that is reportable
on Form 1042-S. For payments to intermediaries, Every person required to deduct and withhold any tax
flow-through entities, and recipients, Form 1042-S requires ! under chapter 3 or chapter 4 is liable for such tax.
CAUTION
that the chapter 3 status (or classification) and, when the
payment reported is a withholdable payment, the chapter 4 Do not use Form 1042-S to report an item required to be
status, be reported on the form according to the codes reported on any of the following forms.
provided in these instructions. For the requirement of a • Form W-2 (wages and other compensation made to
withholding agent to file a Form 1042-S for chapter 4 employees (other than compensation for dependent personal
purposes, see Regulations section 1.1474-1(d). services for which the beneficial owner is claiming treaty

2 Instructions for Form 1042-S (2024)

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benefits), including wages in the form of group-term life Sunday, or legal holiday in the District of Columbia or where
insurance). the return is to be filed, the due date is the next business day.
• Form 1099 (except if indicated otherwise in these
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. Electronic filing requirement. See Electronic Reporting,
• Form 8966, FATCA Report. Foreign financial institutions later, for information on who is required to file Form 1042-S
(FFIs), sponsoring entities of certain FFIs and other foreign electronically.
entities, and withholding agents are required to report on
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 Extension of time to file. To request an extension of time to
qualifies for the portfolio interest exception from withholding file Forms 1042-S, file Form 8809, Application for Extension
is not required to report the payment if the portfolio interest is of Time To File Information Returns. See the instructions for
paid on a loan that is not connected to the individual's trade Form 8809 at IRS.gov/Form8809 for where to file that form.
or business. However, an individual who is a withholding You should request an extension as soon as you are aware
agent paying an amount that actually has been subject to that an extension is necessary, but no later than the due date
withholding is required to report the payment. Also, an for filing Form 1042-S. By filing Form 8809, you will get an
individual paying an amount on which withholding is required automatic 30-day extension to file Form 1042-S. If you need
must report the payment, whether or not the individual more time, you may submit a second Form 8809 before the
actually withholds. See Multiple Withholding Agent Rule, end of the initial extended due date. See Form 8809 for more
later, for exceptions to reporting when another person has information.
reported the same payment to the recipient. Note that there Recipient copies. You may request an extension of time
may be a payment for tax purposes, even if there is no net to provide the statements to recipients by faxing a letter to:
payment. For example, see Regulations section 1.871-15(i)
for when there is a dividend equivalent. Internal Revenue Service
You must file a Form 1042-S even if you did not withhold Technical Services Operation
tax under chapter 3 because the income was exempt from Attn: Extension of Time Coordinator
tax under a U.S. tax treaty or the Internal Revenue Code, Fax: 877-477-0572
including the exemption for income that is effectively (International 304-579-4105)
connected with the conduct of a trade or business in the
United States, or you released the tax withheld to the The letter must include:
recipient. For exceptions, see Amounts That Are Not Subject 1. Your name,
to Reporting on Form 1042-S, later. 2. Your TIN,
Amounts paid to an individual that is a bona fide resident 3. Your address,
of a U.S. territory are not subject to reporting on Form 1042-S
if the beneficial owner of the income is a U.S. citizen, 4. Type of return (Form 1042-S),
national, or resident alien (such amounts may be subject to 5. A statement that your extension request is for
Form 1099 reporting). providing statements to recipients,
If you file Form 1042-S, you must also file Form 1042, 6. Reason for delay, and
7. The signature of the payer or authorized agent.
! Annual Withholding Tax Return for U.S. Source
CAUTION Income of Foreign Persons. See Form 1042 and its
Your request must be received no later than the date the
instructions for more information.
Forms 1042-S are due to the recipients. If your request for an
extension is approved, generally you will be granted a
Where, When, and How To File maximum of 30 extra days to furnish the recipient statements.
Forms 1042-S, whether filed on paper or electronically, must See Extension to provide statements to recipients in Pub.
be filed with the IRS and be furnished to the recipient of the 515, Withholding of Tax on Nonresident Aliens and Foreign
income by March 15, 2025. If the 15th falls on a Saturday, Entities.

Instructions for Form 1042-S (2024) 3

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See Pub. 1187 for more information about filing If you have tax law questions pertaining to Form 1042-S,
! extension requests electronically instead of on a call 267-941-1000 (not a toll-free number).
CAUTION paper Form 8809.
Additional Information
Electronic Reporting For more information on the withholding of tax, see Pub. 515.
Forms 1042-S must be filed electronically if: To order this publication and other publications and forms,
• You are a person (including a corporation, partnership, call 800-TAX-FORM (800-829-3676). You can download or
individual, trust, or estate) that is required to file 10 or more print some of the forms and publications you may need on
information returns during the year or is a partnership with IRS.gov/Forms. Otherwise, you can go to IRS.gov/
more than 100 partners, or OrderForms to place an order and have forms mailed to you.
• You are a financial institution (whether U.S. or foreign) You should receive your order within 10 business days.
regardless of the number of returns required to be filed.
Record Retention
Electronic submissions are filed using the FIRE System. Withholding agents should retain a copy of the information
The FIRE System operates 24 hours a day, 7 days a week, at returns filed with the IRS, or have the ability to reconstruct the
fire.irs.gov. For more information, see Pub. 1187. data, for at least 3 years after the reporting due date.

The electronic filing requirement also applies to amended Substitute Forms
returns for a withholding agent required to file its original The official Form 1042-S is the standard for substitute forms.
Form 1042-S returns electronically under the above All substitute forms must comply with the rules set forth in
requirements. Pub. 1179, General Rules and Specifications for Substitute
If you file electronically, do not file the same returns Forms 1096, 1098, 1099, 5498, and Certain Other
Information Returns. A substitute of Form 1042-S that is
! on paper. Duplicate filing may cause penalty notices furnished to the recipient (Copy B, C, or D) must conform in
CAUTION to be generated.
format and size to the official IRS form and must contain the
exact same information as the copy filed with the IRS.
Note. Regardless of the above requirements, the IRS However, the size of the form may be adjusted if the
encourages filers to transmit forms electronically. substitute form is presented on a landscape-oriented page
Hardship waiver. To receive a hardship waiver from filing instead of portrait. Only one Form 1042-S may be submitted
Forms 1042-S electronically, submit Form 8508, Request for per page, regardless of orientation. You may be subject to a
Waiver From Filing Information Returns Electronically. Waiver penalty for failure to furnish a correct information return. See
requests should be filed at least 45 days before the due date Penalties, later.
of the returns. See Form 8508 for more information.
Note. A withholding agent is required to provide a recipient
Truncation of TIN Rules with a separate substitute Form 1042-S for each type of
Withholding agents may truncate the recipient's TIN (social payment of income (as determined by the income code in
security number (SSN), individual taxpayer identification box 1).
number (ITIN), or employer identification number (EIN)) on All of the fields on the substitute form must match the
the recipient's copy of Form 1042-S (that is, Copies B, C, and ! copy filed with the IRS and must comply with IRS
D), including a substitute form. To truncate the recipient's CAUTION standards (see Pub. 1179). Any differences between
TIN, only the last four digits of a TIN must be displayed and the substitute form issued to recipients and the copy filed with
the remaining digits must be replaced with either asterisks (*) the IRS will lead to delays in processing the recipient's tax
or Xs. For example, an SSN or ITIN must be truncated on the return. The IRS may disallow claims for refund or credit for
recipient's copy as XXX-XX-nnnn. An EIN must be truncated amounts withheld reported on Form 1042-S if the substitute
as XX-XXXnnnn. form attached to such claims differs from the copy that was
filed with the IRS.
Withholding agents may also truncate a recipient’s foreign
tax identification number (FTIN) on the recipient’s copy of Penalty for filing incorrect substitute form. Privately
Form 1042-S (Copies B, C, and D), including a substitute printed substitute Forms 1042-S must be exact copies of
form. The same rules for truncating a recipient’s U.S. TIN both the format and content of the official Form 1042-S. If you
stated above must be followed if truncating a recipient’s file a substitute for Form 1042-S, Copy A, with the IRS that is
FTIN. not an exact copy of the official Form 1042-S, Copy A, you
may be subject to a penalty for failure to file a correct
Note. The recipient's TIN and FTIN must not be truncated on information return. See Penalties, later.
Copy A filed with the IRS. The withholding agent's EIN
cannot be truncated on any copy. Account-by-Account Reporting by Certain
Need assistance? For additional information and Financial Institutions
instructions on filing Forms 1042-S electronically, extensions A U.S. financial institution or U.S. branch of an FFI
of time to file (Form 8809), and hardship waivers (Form maintaining an account within the United States is required to
8508), see Pub. 1187. You also can call the Information report payments of the same type of income (as determined
Reporting Program at 866-455-7438 (toll free) or by the income code in box 1) made to multiple financial
304-263-8700 (not a toll-free number). Do not call the accounts held by the same recipient on a separate Form
Information Reporting Program for tax law questions. The 1042-S for each account. For this purpose, a financial
Information Reporting Program 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 the instructions for Box 13k, Recipient’s
304-579-4105 (not a toll-free number).

4 Instructions for Form 1042-S (2024)

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Account Number, later, for information on designating each income is all income included in gross income, including
account with a separate account number. interest (as well as original issue discount (OID)), dividends,
rents, royalties, and compensation. Amounts subject to
Combined Reporting Procedures chapter 3 withholding do not include amounts that are not
Rev. Proc. 99-50 provides special procedures for successor FDAP, such as most gains from the sale of property (including
entities to use combined information reporting under market discount and option premiums), as well as other
chapter 3 in certain situations following a merger or specific items of income (such as interest on bank deposits
acquisition. A withholding agent may also use these and short-term OID). See Regulations section 1.1441-2.
procedures for purposes of reporting under chapter 4. Authorized agent. An agent is an authorized agent for
purposes of filing Form 1042 or making tax deposits and
Deposit Requirements payments on behalf of its principal (payer) only if all five of the
For information and rules concerning federal tax deposits, following conditions apply.
see Depositing Withheld Taxes in Pub. 515 or Deposit 1. There is a written agreement between the payer and
Requirements in the Instructions for Form 1042. the person acting as agent.
Definitions 2. A Form 8655, Reporting Agent Authorization, is filed
with the IRS if the agent is filing Form 1042 (in its own name)
Withholding agent. A withholding agent is any person, U.S. on behalf of the payer.
or foreign, that has control, receipt, or custody of an amount
subject to withholding under chapter 3 who can disburse or 3. The books and records and relevant personnel of the
make payments of an amount subject to withholding, or who agent are available to the payer.
makes a withholdable payment under chapter 4. The 4. The payer remains fully liable for the acts of its agent
withholding agent may be an individual, corporation, and does not assert any of the defenses that may otherwise
partnership, trust, association, or any other entity. The term be available.
“withholding agent” also includes, but is not limited to, a 5. If the agent is filing Form 1042 (in its own name) on
qualified intermediary (QI), a nonqualified intermediary (NQI), behalf of the payer, the agent is reported as the withholding
a withholding foreign partnership (WP), a withholding foreign agent in boxes 12a through 12i and information about the
trust (WT), a flow-through entity, a U.S. branch that is treated payer is reported in boxes 16a through 16e of the Form
as a U.S. person under Regulations section 1.1441-1(b)(2) 1042-S.
(iv)(A), a territory FI, a nominee under section 1446, and an
authorized agent. A person may be a withholding agent even A sponsoring entity is a reporting agent with respect to
if there is no requirement to withhold from a payment or if withholdable payments and must fulfill the above conditions
another person has already withheld the required amount to be an authorized agent.
from a payment. For more information on these conditions, see Regulations
In most cases, the U.S. person who pays (or causes to be sections 1.1441-7(c) and 1.1474-1(a)(3)(ii).
paid) the item of U.S. source income to a foreign person (or Beneficial owner. For payments other than those for which
to its agent) must withhold. However, other persons may be a reduced rate of withholding is claimed under an income tax
required to withhold. For example, if a payment is made by a treaty, the beneficial owner of income in most cases is the
QI (whether or not it assumes primary withholding person who is required under U.S. tax principles to include
responsibility) and the QI knows that withholding was not the income in gross income on a tax return. A person is not a
done by the person from which it received the payment, then beneficial owner of income, however, to the extent that
that QI is required to do the appropriate withholding. In person is receiving the income as a nominee, agent, or
addition, withholding must be done by any QI that assumes custodian, or to the extent the person is a conduit whose
primary withholding responsibility under chapters 3 and 4, a participation in a transaction is disregarded. In the case of
WP, a WT, a U.S. branch that agrees to be treated as a U.S. amounts paid that do not constitute income, beneficial
person under Regulations section 1.1441-1(b)(2)(iv)(A), or ownership is determined as if the payment were income.
an authorized agent. Finally, if a payment is made by an NQI Foreign partnerships, foreign simple trusts, and foreign
or a flow-through entity that knows, or has reason to know, grantor trusts are not the beneficial owners of income paid to
that withholding was not done, that NQI or flow-through entity the partnership or trust for chapter 3 purposes. The beneficial
is required to withhold since it also falls within the definition of owners of income paid to a foreign partnership in most cases
a withholding agent. are the partners in the partnership, provided that the partner
Account holder. Generally, the account holder is the person is not itself a partnership, foreign simple or grantor trust,
that holds the account. See Regulations section 1.1471-5(a). nominee, or other agent. The beneficial owner of income paid
to a foreign simple trust (a foreign trust that is described in
Amount realized. An amount realized on the transfer of a
section 651(a)) in most cases is the beneficiary of the trust, if
PTP interest is the amount of gross proceeds (as defined in
the beneficiary is not a foreign partnership, foreign simple or
Regulations section 1.6045-1(d)(5)) paid or credited to a
grantor trust, nominee, or other agent. The beneficial owner
partner or broker (as applicable) that is a transferor of the
of a foreign grantor trust (a foreign trust to the extent that all
interest. The amount realized on a PTP distribution is the
or a part of the income of the trust is treated as owned by the
amount of the distribution reduced by the portion of the
grantor or another person under sections 671 through 679) is
distribution that is attributable to the cumulative net income of
the person treated as the owner of the trust. The beneficial
the partnership (as determined under Regulations section
owner of income paid to a foreign complex trust (a foreign
1.1446(f)-4(c)(2)(iii)).
trust that is not a foreign simple trust or foreign grantor trust)
Amount subject to chapter 3 withholding. Generally, an is the trust itself.
amount subject to chapter 3 withholding is an amount from The beneficial owner of income paid to a foreign estate is
sources within the United States that is FDAP income. FDAP the estate itself.

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A payment to a U.S. partnership, U.S. trust, or U.S. estate foreign central bank of issue, a government of a U.S. territory,
is not subject to withholding under chapter 3 or 4. A U.S. certain retirement funds, and certain entities wholly owned by
partnership, trust, or estate should provide the withholding one or more exempt beneficial owners. In addition, an exempt
agent with a Form W-9, Request for Taxpayer Identification beneficial owner includes any person treated as an exempt
Number and Certification. In most cases, these beneficial beneficial owner under an applicable Model 1 IGA or Model 2
owner rules apply for purposes of section 1446; however, IGA.
there are exceptions.
Exempt recipient. An exempt recipient is any payee that is
1. Chapter 3 withholding rate pool. A payment of a single exempt from the Form 1099 reporting requirements.
type of income, determined in accordance with the income
codes used to file Form 1042-S, that is subject to a single Exempt recipients are not exempt from withholding
rate of withholding and a single chapter 4 exemption code. ! under chapter 3 unless they are U.S. persons or
CAUTION foreign persons entitled to an exemption from
2. Chapter 4 withholding rate pool. A pool of account withholding under chapter 3.
holders or payees provided on an FFI withholding statement
(or a chapter 4 withholding statement) that is described in Expatriate. A person is considered an expatriate if he or she
Regulations section 1.1471-1(b)(20). relinquishes U.S. citizenship or, in the case of a long-term
resident of the United States, ceases to be a lawful
Broker. A broker is a person described in Regulations permanent resident as defined in section 7701(b)(6).
section 1.1446(f)-1(b)(1) when referenced in connection with
a transfer of a PTP interest. Fiscally transparent entity. An entity is treated as fiscally
transparent with respect to an item of income for which treaty
Chapter 3. Chapter 3 (Withholding of Tax on Nonresident benefits are claimed to the extent that the interest holders in
Aliens and Foreign Corporations), excluding sections 1445 the entity must, on a current basis, take into account
and 1446. separately their shares of an item of income paid to the entity,
Disregarded entity. A business entity that has a single whether or not distributed, and must determine the character
owner and is not a corporation under Regulations section of the items of income as if they were realized directly from
301.7701-2(b) is disregarded as an entity separate from its the sources from which realized by the entity. For example,
owner. partnerships, common trust funds, and simple trusts or
grantor trusts in most cases are considered to be fiscally
Disclosing QI. For purposes of section 1446(a) or (f), a QI
transparent with respect to items of income received by them.
that provides with its withholding statement the specific
payee documentation referenced in Regulations section Flow-through entity. For chapter 3 purposes, a
1.1446(f)-4(a)(7)(iii) (for an amount realized) or Regulations flow-through entity is a foreign partnership (other than a WP),
section 1.1446-4(e)(4) (for withholding on a PTP distribution a foreign simple or grantor trust (other than a WT), or, for any
under section 1446(a)) instead of the chapter 3 withholding payments for which a reduced rate of withholding under an
rate pool information otherwise permitted to be included on income tax treaty is claimed, any entity to the extent the entity
the withholding statement. A QI that acts as a disclosing QI is considered to be fiscally transparent under section 894
for a payment must act as a disclosing QI for the entire with respect to the payment by an interest holder's
payment. See the 2023 QI agreement in Rev. Proc. 2022-43 jurisdiction.
for further information. Financial institution. A financial institution generally means
Dividend equivalent. To the extent specified in section an entity that is a depository institution, custodial institution,
871(m) and the regulations thereunder, a dividend equivalent investment entity, or an insurance company (or holding
is a payment (within the meaning of Regulations section company of an insurance company) that issues cash value
1.871-15(i)) that, directly or indirectly, is contingent on, or insurance or annuity contracts. See Regulations section
determined by reference to, the payment of a dividend from 1.1471-5(e).
U.S. sources, including pursuant to a securities lending, Foreign financial institution (FFI). An FFI is an entity
sale-repurchase transaction, a specified notional principal described in Regulations section 1.1471-5(d) or an entity
contract, or a specified equity-linked instrument. treated as a financial institution under an Intergovernmental
Certain other payments made by the withholding agent to Agreement (IGA).
satisfy a tax liability with respect to a dividend equivalent by Deemed-compliant FFI. Under section 1471(b)(2),
the party receiving the dividend equivalent are dividend certain FFIs are deemed to comply with the regulations under
equivalents. See Regulations section 1.871-15(c) for chapter 4 without the need to enter into an FFI agreement
additional information, including the definitions of specified with the IRS. However, certain deemed-compliant FFIs are
notional principal contract and specified equity-linked required to register with the IRS and obtain a GIIN. These
instrument. FFIs are referred to as “registered deemed-compliant
Any section 871(m) amount of a QDD is treated as a FFIs.” See Regulations section 1.1471-5(f)(1). Registered
dividend equivalent. See Rev. Proc. 2022-43 for additional deemed-compliant FFIs also include certain FFIs that satisfy
information, including the definition of a section 871(m) the requirements of an applicable IGA.
amount. Nonparticipating FFI. A nonparticipating FFI is an FFI
Exempt beneficial owner. An exempt beneficial owner that is not a participating FFI, deemed-compliant FFI, or
means a person that is described in Regulations section exempt beneficial owner.
1.1471-6 and includes a foreign government, a political Participating FFI. A participating FFI is an FFI that has
subdivision of a foreign government, a wholly owned agreed to comply with the terms of an FFI agreement with
instrumentality or agency of a foreign government or respect to all branches of the FFI, other than a branch that is
governments, an international organization, a wholly owned a reporting Model 1 FFI or a U.S. branch. The term
agency or instrumentality of an international organization, a “participating FFI” also includes a reporting Model 2 FFI and

6 Instructions for Form 1042-S (2024)

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a QI branch of a U.S. financial institution, unless such branch test or the substantial presence test for the calendar year is a
is a reporting Model 1 FFI. resident alien. Any person not meeting either test is a
nonresident alien individual. Additionally, an alien individual
Foreign person. A foreign person includes a nonresident
who is treated as a nonresident alien pursuant to Regulations
alien individual, a foreign corporation, a foreign partnership, a
section 301.7701(b)-(7) for purposes of figuring out the
foreign trust, a foreign estate, and any other person that is not
individual’s U.S. tax liability, or an alien individual who is a
a U.S. person. The term also includes a foreign branch or
bona fide resident of Puerto Rico, Guam, the Commonwealth
office of a U.S. financial institution or U.S. clearing
of the Northern Mariana Islands, the U.S. Virgin Islands, or
organization if the foreign branch is a QI. A payment to a U.S.
American Samoa is a nonresident alien individual. An
branch of a foreign person is treated as a payment to a
individual will not be treated as a U.S. person for a tax year or
foreign person for purposes of Form 1042-S.
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 his or her U.S. tax liability. See Pub. 519, U.S. Tax
participating FFI (including a reporting Model 2 FFI), Guide for Aliens, for more information on resident and
registered deemed-compliant FFI (including a reporting nonresident alien status.
Model 1 FFI), or other entity for chapter 4 reporting purposes.
Even though a nonresident alien individual married to
Intermediary. An intermediary is a person that acts as a ! a U.S. citizen or resident alien may choose to be
custodian, broker, or nominee, or otherwise as an agent for CAUTION treated as a resident alien for certain purposes (for
another person, regardless of whether that other person is example, filing a joint income tax return), such individual is
the beneficial owner of the amount paid, a flow-through entity, still treated as a nonresident alien for withholding tax
or another intermediary. purposes.
Qualified intermediary (QI). A QI is an intermediary or
eligible entity that is a party to a withholding agreement with Payee. Except as otherwise provided, the payee is the
the IRS. A QI that is a financial institution must have a person to whom a payment is made, regardless of whether
chapter 4 status described in Regulations section such person is the beneficial owner of the amount or treated
1.1441-1(e)(5)(ii). An entity must indicate its status as a QI on as the recipient of the payment for purposes of reporting on
a Form W-8IMY submitted to a withholding agent. Form 1042-S. See Regulations section 1.1471-3(a).
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),
Nonqualified intermediary (NQI). An NQI is any 1.1441-9(b)(3), 1.1446-1(c)(3), and 1.6049-5(d). Also see
intermediary that is not a U.S. person and that is not a QI. Pub. 515. See Regulations section 1.1446(f)-4(a)(2) and (b)
Private arrangement intermediary (PAI). A QI that is an (2) for a broker's requirement to treat a transferor of a PTP
FFI may enter into a contractual agreement with another interest (or broker acting for the transferor) as a foreign
intermediary under which the other intermediary generally person for section 1446(f) purposes absent the broker's
agrees to perform all of the obligations of the QI with respect receipt of a certification of non-foreign status. For a
to the accounts maintained directly by the other intermediary. withholdable payment (defined in Regulations section
See the QI agreement for the requirements of a PAI and a 1.1473-1(a)), the withholding agent must also follow the
QI's agreement with a PAI. presumption rules under Regulations sections 1.1471-3(f)
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.
Excepted NFFE. The term “excepted NFFE” means an Publicly traded partnership (PTP). A PTP is an entity that
NFFE that is described in Regulations section 1.1472-1(c)(1) has the same meaning as in section 7704 and Regulations
and generally includes a publicly traded corporation, certain sections 1.7704-1 through 1.7704-4 but does not include a
affiliated entities related to a publicly traded corporation, PTP treated as a corporation under that section.
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.
Nonresident alien individual. Any individual who is not a An eligible entity is defined in Regulations section
citizen or resident of the United States is a nonresident alien 1.1441-1(e)(6)(ii).
individual. An alien individual meeting either the green card

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To act as a QDD, the home office or branch, as applicable, • A U.S. branch that is not treated as a U.S. person unless
must qualify and be approved for QDD status and must the income is, or is treated as, effectively connected with the
represent itself as a QDD on its Form W-8IMY and separately conduct of a trade or business in the United States.
identify the home office or branch as the recipient on a For chapter 4 purposes, a recipient also includes any of
withholding statement (if required). Each home office or the following.
branch that obtains QDD status is treated as a separate • A recalcitrant account holder not included in a chapter 4
QDD. See Regulations section 1.1441-1(e)(6) and Rev. Proc. reporting pool.
2022-43 for more information. • A QI (other than a disclosing QI).
Qualified securities lender (QSL). A QSL is an FFI that • A WP or WT.
satisfies all of the following. • A PAI.
• It is a bank, custodian, broker-dealer, or clearing • A participating FFI or a registered deemed-compliant FFI
organization that is regulated by the government in its home that is an NQI, NWP, or NWT and provides chapter 4
jurisdiction and that regularly borrows and lends the withholding rate pool information to the extent permissible.
securities of U.S. corporations to unrelated customers. • A participating FFI or deemed-compliant FFI that is the
• It is subject to audit by the IRS under section 7602 or by an beneficial owner, including a nonreporting FFI under a Model
external auditor if it is a QI. 1 or Model 2 IGA.
• It provides to the withholding agent an annual certification • A U.S. branch or territory FI treated as a U.S. person under
of its QSL status. Regulations section 1.1441-1(b)(2)(iv)(A).
• It meets the requirements to qualify as a QSL provided in • An NFFE that is not a flow-through entity or acting as an
Notice 2010-46 for the transition period. See Notice 2010-46 intermediary.
at IRS.gov/irb/2010-24_IRB#NOT-2010-46. While Notice • A foreign partnership or a foreign trust (other than a WP or
2010-46 was obsoleted, Notice 2022-37 permits withholding WT), but only to the extent the income is effectively
agents to apply the transition rules described in Notice connected with its conduct of a trade or business in the
2010-46 for payments made in 2023 and 2024. United States.
• 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.
account. See Regulations section 1.1471-5(g). In the case of a PTP distribution subject to
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
purposes. Specified notional principal contract (SNPC). An SNPC
• A foreign partnership or a foreign trust (other than a WP or is any specified notional principal contract within the meaning
WT), but only to the extent the income is effectively of Regulations section 1.871-15(d).
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 section 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
business in the United States. Territory FI. A territory FI is a financial institution that is
• A disregarded entity other than a hybrid entity claiming incorporated or organized under the laws of any U.S. territory
treaty benefits. and is not an investment entity. See Regulations section
• A foreign trust that is described in section 651(a) (a foreign 1.1471-5(e)(1)(iii) for the definition of investment entity.
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 sale subject to section 1446(f) or for a PTP distribution.

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Additionally, a territory FI may agree to be treated as a U.S. alien individual who is a resident of a country identified in
person for any of these purposes. Rev. Proc. 2021-32, 2021-42 I.R.B. 465, available at
The U.S. branch or territory FI must provide a Form IRS.gov/irb/2021-42_IRB#REV-PROC-2021-32 (or any
W-8IMY evidencing that it is agreeing to be treated as a U.S. superseding revenue procedure that is effective as of
person. January 1, 2024). A payer may elect to report interest
described above paid to any nonresident alien individual by
A U.S. branch that is treated as a U.S. person is reporting all such interest.
! treated as such solely for purposes of determining When completing Form 1042-S, use income code 29 in
CAUTION whether a payment is subject to withholding by the
box 1 and exemption code 02 in box 3a for chapter 3
branch. The branch is, for purposes of information reporting,
purposes, and the applicable chapter 4 exemption code in
a foreign person, and payments to such a branch must be
box 4a (see the instructions for boxes 3a and 4a, later).
reported on Form 1042-S.
• 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
corporate distribution (whether actual or deemed) must be
Withholding certificate. The term “withholding certificate” reported, regardless of any estimate of the part of the
refers to Form W-8 or Form W-9 in most cases. distribution that represents a taxable dividend. Any
distribution, however, that is treated as gain from the
Note. Throughout these instructions, a reference to or redemption of stock is not an amount subject to withholding.
mention of “Form W-8” is a reference to Forms W-8BEN, For information on distributions from the disposition of a U.S.
W-8BEN-E, W-8ECI, W-8EXP, and/or W-8IMY. real property interest paid by a publicly traded trust or a QIE,
Withholding foreign partnership (WP) or withholding see Distributions Attributable to Dispositions of U.S. Real
foreign trust (WT). A WP or WT is a foreign partnership or Property Interests by Publicly Traded Trusts and Qualified
trust that has entered into a withholding agreement with the Investment Entities, later.
IRS in which it agrees to assume primary withholding • Interest. Interest subject to reporting includes the part of a
responsibility for all payments that are made to it for its notional principal contract payment that is characterized as
partners, beneficiaries, or owners under chapter 3 (except for interest.
sections 1445 and 1446(a) or (f)) and under chapter 4. For • Rents.
information on these withholding agreements, see Rev. Proc. • Royalties.
2017-21 at IRS.gov/irb/2017-06_IRB#RP-2017-21 and • Compensation for independent personal services
Regulations section 1.1441-5. performed in the United States.
Nonwithholding foreign partnership (NWP) or • Compensation for dependent personal services
nonwithholding foreign trust (NWT). An NWP or NWT is 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.
• Pension distributions and other deferred income.
Amounts Subject to Reporting on • Most gambling winnings. Proceeds from a wager placed
in blackjack, baccarat, craps, roulette, or big-6 wheel are not
Form 1042-S amounts subject to reporting.
Amounts subject to reporting on Form 1042-S are amounts • Cancellation of indebtedness. Agents must report
from U.S. sources paid to foreign persons (including persons income from the cancellation of indebtedness unless the
presumed to be foreign) or included in a U.S. payee pool that withholding agent is unrelated to the debtor and does not
are reportable under chapters 3 and 4, even if no amount is have knowledge of the facts that give rise to the payment.
deducted and withheld from the payment because of a treaty • Effectively connected income (ECI). ECI includes
or Internal Revenue Code exception to taxation or if any amounts that are (or are presumed to be) effectively
amount withheld was repaid to the payee. Amounts subject to connected with the conduct of a trade or business in the
reporting are amounts from sources within the United States United States even if no withholding certificate is required.
that constitute (a) FDAP income (including deposit interest); Note that bank deposit interest is subject to Form 1042-S
(b) certain gains from the disposal of timber, coal, or reporting if it is ECI or otherwise reportable on Form 1042-S
domestic iron ore with a retained economic interest; and (c) (see Interest on deposits paid to certain nonresident aliens in
gains relating to contingent payments received from the sale this bullet list, earlier). ECI of a PTP distributed to a foreign
or exchange of patents, copyrights, and similar intangible partner or an amount realized subject to reporting under
property. A payment is also subject to reporting if withholding Regulations section 1.1461-1(c)(2)(i)(Q) must be reported on
under chapter 4 is applied (or required to be applied) to the Form 1042-S.
payment. • Notional principal contract income. Income from
notional principal contracts that the payer knows, or must
Amounts subject to reporting on Form 1042-S include, but presume, is effectively connected with the conduct of a U.S.
are not limited to, the following amounts to the extent they are trade or business is subject to reporting using income code
from U.S. sources. 32. The amount to be reported is the amount of cash paid on
• Interest on deposits paid to certain nonresident the contract during the calendar year. Any amount of interest
aliens. Withholding agents must report certain interest determined under the provisions of Regulations section
described in section 871(i)(2)(A) aggregating $10 or more 1.446-3(g)(4) (dealing with interest in the case of a significant
paid with respect to a deposit maintained at an office within nonperiodic payment) is reportable as interest and not as
the United States if such interest is paid to a nonresident

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notional principal contract income. See, however, the 1. Substitute dividends that are dividend equivalents
separate reporting for dividend equivalents, later. (income code 34 or 53).
• Insurance premiums. Insurance premiums from U.S. 2. Dividend equivalents with respect to transactions that
sources (regardless of whether or not the premium payments are section 871(m) transactions as a result of combining
are subject to the section 4371 excise tax) are withholdable transactions under Regulations section 1.871-15(n) (income
payments under chapter 4. If the payment is actually withheld code 56).
upon or should have been withheld upon (but the withholding
agent failed to withhold), such amount must be reported on 3. All other dividend equivalents (income code 40).
Form 1042-S. Insurance premiums from U.S. sources are Note. In the case of a dividend equivalent, because the
amounts subject to chapter 3 withholding (excluding amounts dividend equivalent is determined on a gross basis, there
subject to the section 4371 excise tax that must be reported may be a payment for reporting purposes even when there is
on Form 1042-S). no transfer of funds. See Regulations section 1.871-15(i).
• REMIC excess inclusions. Excess inclusions from • Guarantee of indebtedness. This includes amounts
REMICs (income code 02) and withheld tax must be reported paid, directly or indirectly, for the provision of a guarantee of
on Form 1042-S. A domestic partnership must separately indebtedness issued after September 27, 2010. They must
state a partner's allocable share of REMIC taxable income or be paid by a noncorporate resident or U.S. corporation or by
net loss and the excess inclusion amount on Schedule K-1 any foreign person if the amounts are effectively connected
(Form 1065). If the partnership allocates all or some part of with the conduct of a U.S. trade or business. Report these
its allocable share of REMIC taxable income to a foreign amounts using income code 41.
partner, the partner must include the partner's allocated • Specified federal procurement payments. Report
amount in income as if that amount was received on the specified federal procurement payments subject to
earliest to occur of (1) the date of distribution by the withholding under section 5000C.
partnership, (2) the date the foreign partner disposes of its • PTPs. Certain payments of ECI attributable to PTP
indirect interest in the REMIC residual interest, or (3) the last interests (described earlier) are subject to reporting on Form
day of the partnership's tax year. 1042-S. See Publicly Traded Partnerships (Sections 1446(a)
and (f) Withholding Tax), later, for additional information.
The partnership must withhold tax on the part of the
REMIC amount that is an excess inclusion. Amounts That Are Not Subject to
An excess inclusion allocated to the following foreign Reporting on Form 1042-S
persons must be included in that person's income at the
same time as other income from the entity is included in Interest and OID from short-term obligations. Interest
income. and OID from any obligation payable 183 days or less from
• Shareholder of a real estate investment trust (REIT). the date of original issue are generally not required to be
• Shareholder of a regulated investment company (RIC). reported on Form 1042-S. See, however, the reporting
• Participant in a common trust fund. requirements for deposit interest described in Interest on
• Patron of a subchapter T cooperative organization. deposits paid to certain nonresident aliens in the bullet list
• Students, teachers, and researchers. Amounts paid to under Amounts Subject to Reporting on Form 1042-S, earlier.
foreign students, trainees, teachers, or researchers as Registered obligations targeted to foreign markets.
scholarship or fellowship income, and compensation for Interest on a registered obligation that is targeted to foreign
personal services (whether or not exempt from tax under an markets and that qualifies as portfolio interest is not subject
income tax treaty) must be reported. However, amounts that to reporting if it is paid to a registered owner that is a financial
are exempt from tax under section 117 are not subject to institution or member of a clearing organization and you have
reporting. received the required certifications.
• Amounts paid to foreign governments, foreign central
banks of issue, and international organizations. These Reporting will be required on interest paid on any
amounts are subject to reporting even if they are exempt from ! registered obligation (regardless of whether targeted
chapter 3 withholding under section 892 or 895. CAUTION to foreign markets) if the registered obligation is
• Foreign targeted registered obligations. Interest paid issued after December 31, 2015.
on registered obligations targeted to foreign markets paid by
a U.S. person to a foreign person other than a financial Bearer obligations targeted to foreign markets. Do not
institution or a member of a clearing organization is an file Form 1042-S to report interest not subject to withholding
amount subject to reporting. on bearer obligations if a Form W-8 is not required.
• Original issue discount (OID) from the redemption of Withholding is required on interest paid on any
an OID obligation. The amount subject to reporting is the ! bearer obligations targeted to foreign markets if the
amount of OID actually includible in the gross income of the CAUTION obligation is issued after March 18, 2012. You must
foreign beneficial owner of the income, if known. Otherwise, file Form 1042-S to report this interest paid on an obligation
the withholding agent should report the entire amount of OID issued after that date.
as if the recipient held the instrument from the date of original
issuance. See Pub. 1212, Guide to Original Issue Discount Notional principal contract payments that are not ECI or
(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 (2024)

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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)
Qualified investment entities (QIEs). Special rules apply (income code 27), to report an amount realized on the
to QIEs. A QIE is one of 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 withholding
Look-through rule for QIEs. In most cases, any distribution is at the rate under section 1446(a), report chapter 4
from a QIE to a nonresident alien, foreign corporation, or exemption code 14 (effectively connected income). If
other QIE that is attributable to the QIE’s gain from the sale or 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 in reporting pools to a QI to which
ending on the date of the distribution. A distribution by a REIT you pay the distribution.
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

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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 U.S. A payment will be subject to withholding under either
branch or territory financial institution that is treated as a U.S. chapter 3 or chapter 4 but not both. If the payment is of an
person for the payment. A broker should report the aggregate amount subject to both chapter 3 and chapter 4 withholding,
of the amounts realized from sales of PTP interests paid to chapter 4 withholding takes precedence.
each of 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 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
above) 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 (2024)

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• 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 (2024)                                                                                           13

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(registered deemed-compliant FFI - other) for an FFI treated recipient code 05 (participating FFI-other) as the chapter 4
as deemed-compliant under an IGA, 31 (nonreporting IGA status code. WA must also complete a Form 1042-S for the
FFI), or, for a payment to a QI, 27 (exempt beneficial owner) dividends allocated to the chapter 4, 30% withholding rate
as the chapter 4 status code. A U.S. withholding agent must pool, showing “4” in box 3, chapter 3 exemption code 12
use chapter 4 recipient code 48 (U.S. Payees Pool) when (payee subjected to chapter 4 withholding) in box 3a, “00.00”
reporting a reportable amount allocated to a chapter 4 in box 3b (chapter 3 tax rate), “00” in box 4a (chapter 4
withholding rate pool of U.S. payees of a QI and report the exemption code), and “30.00” in box 4b with QI as the
chapter 3 recipient code 12 (qualified intermediary). A U.S. recipient in box 13a, and recipient code 12 (qualified
withholding agent must not use any chapter 3 pooled intermediary) as the chapter 3 status code, and recipient
reporting code (codes 27 through 32) as such codes are only code 49 (QI-Recalcitrant Pool-General) as the chapter 4
to be used by a withholding agent that is a QI, WP, or WT. status code.
See Amounts Paid by QIs, later, and the instructions for Payments allocated by QIs, or presumed made, to U.S.
boxes 13f and 13g, later. Use of an inappropriate recipient nonexempt recipients. A QI may provide Forms W-9 or
code may cause a notice to be generated. other information regarding U.S. nonexempt recipients that
A QI is generally required to act in such capacity only the QI (or other entity maintaining the account) is required to
report under chapter 61 and for which the QI does not
! for designated accounts for purposes of chapters 3, assume primary Form 1099 reporting responsibility. A QI may
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 also provide information regarding U.S. nonexempt recipients
for other accounts and, if it is an FFI that is receiving a on whom the QI elects to backup withhold under section
withholdable payment, that it is a participating FFI, registered 3406 instead of withholding under chapter 4 on payments
deemed-compliant FFI, or FFI treated as deemed-compliant made to an account holder. If Forms W-9 or other information
under an IGA. A U.S. withholding agent that receives a Form is provided together with information allocating all or a part of
W-8IMY on which the foreign person providing the form the payment to U.S. nonexempt recipients, you must report
indicates that it is not acting as a QI may not treat the foreign income allocable to the U.S. nonexempt recipients on the
person as a recipient except as otherwise provided in these appropriate Form 1099 and not on Form 1042-S even though
instructions. A withholding agent must not use the EIN that a you are paying that income to a QI. The QI may also provide
QI provides in its capacity as such to report payments that information regarding U.S. nonexempt recipients in a
are treated as made to an entity in its capacity as an NQI. In chapter 4 withholding rate pool that the withholding agent
that case, use the GIIN, if any, and EIN that is provided by the must report on Form 1042-S.
entity on its Form W-8IMY in which it claims that it is acting as You may also be required under the presumption rules to
an NQI or flow-through 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 withholding statement that allocates 95% of the payment to a
flow-through entity of wihholdable 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
12 (qualified intermediary) as the chapter 3 status code, and associates a withholding statement that allocates 40% of the
payment to a chapter 3, 15% withholding rate pool and 40%

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

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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 PFFI
a Form W-8BEN-E from FC on which it states that it is the and FC2 is a nonparticipating FFI. The attached withholding
beneficial owner of the income paid to LLC. WA reports the statement allocates 80% of the payment to FC1 and 20% of
interest payment on Form 1042-S showing FC as the the payment to FC2. WA must issue a Form 1042-S for 80%

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of the payment to FP as the recipient using recipient code 26   documentation from a recipient, the withholding agent must 
(hybrid entity making treaty claim) as the chapter 3 status     follow the appropriate presumption rules for that payment 
code, and leaving blank the recipient code for the chapter 4    which, if the payment is a withholdable payment, will 
status code. WA must withhold under chapter 4 on the            generally require the withholding agent to withhold 30% 
remaining 20% of the payment allocated to FC2 and issue a       under chapter 4 because such payment is presumed made to 
Form 1042-S to FC2 as the recipient using recipient code 15     a nonparticipating FFI. See Regulations section 1.1471-3(f)
(corporation) as the chapter 3 status code and recipient code   (5). For this purpose, if the allocation information provided to 
15 (nonparticipating FFI) as the chapter 4 status code and      the withholding agent indicates an allocation of more than 
must 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 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 
                                                                address, TIN (if any), GIIN (if any), and status codes of the 
indicated by its withholding statement and the documentation 
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 flow-through entity that is a nonparticipating FFI, 
recipients to which the payments are remitted. A withholding    the withholding agent must treat the payments as made to an 
agent completing Form 1042-S for a recipient that receives a    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 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 the chapter 4 exemption 
entities that are participating FFIs or registered              code 15 (payee not subject to chapter 4 withholding), the 
deemed-compliant FFIs, the withholding agent must               exempt beneficial owner as the recipient in box 13a, and the 
nevertheless complete Form 1042-S for each chapter 4            name, country code, address, chapter 4 status code, and TIN 
reporting pool to which the payments are allocated and must     (if any) of the nonparticipating FFI in boxes 15a through 15i. 
report, as the recipient, the FFI from whom the recipients      For any remaining portion of the payment, the withholding 
included in the chapter 4 reporting pool directly receive the   agent should complete a Form 1042-S to an unknown 
payment.                                                        recipient as described directly above.
                                                                Pro-rata reporting to NQI. If the withholding agent has 
Example 7. WA, a withholding agent, makes a 
                                                                agreed that an NQI (other than a nonparticipating FFI) may 
withholdable payment of interest to FFI1, a reporting Model 1 
FFI. FFI1 provides WA with a valid Form W-8IMY with which it    provide information allocating a payment to its account 
                                                                holders under the alternative procedure of Regulations 
associates a withholding statement that allocates 80% of the 
payment to FFI2, a participating FFI, and 20% of the payment    section 1.1441-1(e)(3)(iv)(D) (no later than February 14, 
                                                                2025) and the NQI fails to allocate more than 10% of the 
to a pool of nonparticipating FFIs. FFI1 also provides WA with 
FFI2's Form W-8IMY with which it associates a withholding       payment in a withholding rate pool to the specific recipients in 
                                                                the pool or an applicable chapter 4 withholding rate pool, the 
statement that allocates 100% of the payment to recalcitrant 
pool-no U.S. indicia. WA must complete a Form 1042-S for        withholding agent must file a Form 1042-S for each recipient 
                                                                in the pool on a pro-rata basis. The withholding agent must 
the interest allocated to a pool of nonparticipating FFIs with 
FFI1 as the recipient and must complete another Form            check box 15 (pro-rata basis reporting) on each Form 
                                                                1042-S. For example, if there are four account holders in a 
1042-S for the interest allocated to a pool of recalcitrant 
account holders-no U.S. indicia with FFI2 as the recipient.     withholding rate pool that receives a $100 payment and the 
                                                                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 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 
certificate (Form W-8 or W-9) or other valid appropriate        file a Form 1042-S for each recipient for which it has 

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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 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 16e,
FFI or registered deemed-compliant FFI provides a Payer's Name, TIN, GIIN, and Status Code, later, and as
withholding statement allocating all or part of the payment to described in Publicly Traded Partnerships (Sections 1446(a)
a chapter 4 withholding rate pool of U.S. payees along with 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. obligors – this case regardless of the number of NQI account holders. If
general). FP has three partners, A, B, and C, all of whom are the withholding agent agrees to report the NQI account
individuals. FP provides WA with a Form W-8IMY certifying holders on Form 1042-S, however, it may report the amount
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 flow
Example 9. The facts are the same as in Example 8, 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 the chapter 4 pooled
address, status codes, and TIN (if any) of FP should be reporting codes 42 through 48 to allocate payments made to
entered in boxes 15a through 15i. its recalcitrant account holders, payees that are
Example 10. The facts are the same as in Example 9, nonparticipating FFIs, and payees that are U.S. persons. A QI
except that FP is a participating FFI and provides WA with a should not use chapter 4 reporting pool 49 (QI- Recalcitrant
Form W-8IMY certifying that it is reporting its U.S. accounts Pool-General) to report its accounts but may use it to report
under chapter 4 and a withholding statement allocating 33% accounts maintained by another QI. A QI that is an NFFE or
of the payment to a pool of U.S. payees. With respect to the an FFI treated as deemed-compliant under an applicable IGA
U.S. pool of payees, WA must file a Form 1042-S showing FP (as described in Regulations section 1.1441-1(e)(5)(ii)(A))
as the recipient in box 13a and include FP's GIIN, recipient may use 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
a withholding foreign partnership or publicly traded use the chapter 4 pooled reporting codes to report payments
partnership), and recipient code 48 (U.S. payees pool) as the allocable to account holders, payees, or owners of another
chapter 4 status code. WA should enter “3” in box 3 as the participating FFI or registered deemed-compliant FFI that is
chapter indicator, leave boxes 3a and 3b blank, and enter an NQI, NWP, or NWT, and it must provide its chapter 4
exemption code 18 (U.S. payees of a participating FFI or withholding rate pools on its withholding statement. In such
registered deemed-compliant FFI) in box 4a, and “00.00” in case, the QI must include the NQI, NWP, or NWT as the
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 flow-through entity of subject to chapter 3 withholding that are exempt from
amounts realized and PTP distributions. A U.S. chapter 4 withholding and made by the QI directly to foreign
withholding agent making a payment to an NQI that is subject

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

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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 private arrangement intermediaries pay codes of the NQI from whom the recipient directly receives
the dividends they receive from QI to foreign persons that are the payment. In the case of an NQI that is a participating FFI
beneficial owners and direct account holders of PAI1 or PAI2. or registered deemed-compliant FFI, the QI must complete a
All payees are exempt from chapter 4 withholding based on Form 1042-S for the chapter 4 withholding rate pool of the
their respective chapter 4 statuses and the dividends paid NQI provided in a withholding statement associated with its
are subject to a 15% rate of withholding. QI must file a Form Form W-8IMY and must report the NQI as the recipient. In
1042-S for the dividends paid to its own direct account such a case, the QI must include the name and address of
holders that are beneficial owners. QI must also file two the NQI as the recipient and use chapter 4 pool reporting
Forms 1042-S, one for the dividends paid to the direct codes 42 through 48 as the chapter 4 status code and
account holders of each of PAI1 and PAI2. Each of the Forms chapter 3 status code 25 (nonqualified intermediary). If the
1042-S that QI files for payments made to PAI1 and PAI2 NQI fails to provide sufficient allocation information with
must contain the name and address of PAI1 or PAI2, recipient respect to a withholdable payment, the QI must complete a
code 29 (PAI withholding rate pool – general) as the Form 1042-S with the recipient as “Unknown Recipient” using
chapter 3 status code, and a blank chapter 4 status code, chapter 4 status code 29 (unknown recipient) and must
and should use chapter 4 exemption code 15 (payee not include the NQI's information in boxes 15a through 15i.
subject to chapter 4 withholding) in 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 pool –
purposes of chapter 4, a QI that is an FFI may use the U.S. indicia) as the chapter 4 status code.
chapter 4 reporting pool code 47 to allocate payments made Example 15. QI has NQI, a nonqualified intermediary that
to the partnership’s or trust's payees that are nonparticipating is a reporting Model 2 FFI, as an account holder. NQI has two
FFIs and should report the partnership or trust as the account holders, A and B, who receive a withholdable
recipient on Form 1042-S. For chapter 3 purposes, if the payment of U.S. source dividends from QI. A is a
payment is made directly by the partnership or trust to the nonparticipating FFI. NQI treats B as a nonconsenting U.S.
recipient, the QI may use reporting pool code 31 (Agency account under the applicable IGA and is not required to
withholding rate pool - general) or 32 (Agency withholding withhold on payments to B under chapter 4. NQI provides QI
rate pool - exempt organization) as the chapter 3 status code with a valid Form W-8IMY and a complete withholding
(unless the QI is acting as a QDD with respect to the statement that allocates 50% of the dividends paid to A and
payment). However, to the extent required in the QI 50% to B. NQI designates B as an individual exempt from
agreement, the QI must file separate Forms 1042-S for withholding under an IGA but cannot include B in a chapter 4
partners, beneficiaries, or owners of such partnership or trust withholding rate pool of U.S. payees because the payment is
that are indirect partners, beneficiaries, or owners, and for subject to chapter 3 withholding and under the presumption
direct partners, beneficiaries, or owners of such partnership rules of Regulations section 1.1441-1(b)(3) the payment is
or trust that are 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 For chapter 4 purposes and in the case of a flow-through
receives the payment from the NQI. A QI that is completing entity that is a participating FFI or registered
Form 1042-S for a recipient that receives a payment through deemed-compliant FFI (other than a WP or WT), the QI must

20 Instructions for Form 1042-S (2024)

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

Instructions for Form 1042-S (2024)                                                                                            21

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Specified Federal Procurement Payments Made Example 17. NQI, a foreign bank that is a participating
to Foreign Persons FFI, acts as a nonqualified intermediary for four different
foreign persons (A, B, C, and D) who own securities from
Section 5000C imposes a 2% tax on any foreign person that which they receive interest that is a withholdable payment.
receives a specified federal procurement payment. A The interest is paid by a U.S. withholding agent (WA) as
specified federal procurement payment is a payment made to custodian of the securities for NQI. A, B, C, and D each own
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
For purposes of section 5000C, a payer of a specified of interest allocable to A and the $25 of interest allocable to B
federal procurement payment to a foreign person must as portfolio interest and completes Forms 1042-S for A and
complete a Form 1042-S for payments withheld upon in the for B as the recipients. WA includes information relating to
name of the foreign person. Use income code 44 to report NQI in boxes 15a through 15i on the Forms 1042-S for A and
payments subject to withholding under section 5000C. box 2 B. WA subjects the remaining $50 of interest to 30%
should include the amount of the specified federal withholding under chapter 4 and reports the interest on a
procurement payments subject to withholding and box 7 Form 1042-S by treating NQI as the recipient in box 13a and
should include the amount of tax withheld under section uses chapter 3 status code 25 (nonqualified intermediary),
5000C. chapter 4 status code 43 (recalcitrant pool – U.S. indicia),
“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, 4b, or any box for a chapter 3 or 4 claim for refund and NQI has not filed a collective refund
status code. In boxes 13a through 13d, include the name and claim on behalf of C and D for the tax withheld under
the address of the foreign person withheld upon. If known, chapter 4 on the payment (see Regulations section
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 flow-through entity that knows, or has reason to withholding agent rule does not apply to the dividend paid 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.

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box 4b (chapter 4 tax rate). See the instructions for box 3b, boxes must be completed if the nature of the payment
later. requires it.
• If the amount reported in box 2 is a withholdable payment,
Penalties you must also enter information in boxes 4a, 4b, and 13g. If
The following penalties apply to the person required to file the amount reported in box 2 is an amount subject to
Form 1042-S. The penalties apply to both paper filers and chapter 3 withholding, you must enter information in boxes
electronic filers. 12b, 12c, and 13f.
Late filing of correct Form 1042-S. A penalty may be • If the amount reported in box 2 is not subject to chapter 4
withholding or is not a withholdable payment, you must enter
imposed for failure to file each correct and complete Form
“00.00” in box 4b and provide the applicable exemption code
1042-S when due (including extensions), unless you can
in box 4a.
show that the failure was due to reasonable cause and not
willful neglect. The penalty, based on when you file a correct • If the amount reported in box 2 is a withholdable payment
and an amount subject to chapter 3 withholding and the tax
Form 1042-S, is the following.
rate in box 4b is 00.00, you must enter information in boxes
• $60 per Form 1042-S if you correctly file within 30 days
3a and 3b. If the rate entered in box 4b is 30.00, you may
after the required filing date; the maximum penalty is
enter information in boxes 3a and 3b.
$664,500 per year ($232,500 for a small business). A small
business, for this purpose, is defined as having average • If you are a QI, WP, or WT that is pool reporting for its
direct account holders only, either a chapter 3 status code
annual gross receipts of $5 million or less for the 3 most
(box 13f) or chapter 4 status code (box 13g) is required.
recent tax years (or for the period of its existence, if shorter)
ending before the calendar year in which the Forms 1042-S • If the recipient in box 13 or entity in box 15 is a
participating FFI, registered deemed-compliant FFI,
are due.
sponsored FFI, direct reporting NFFE, or sponsored direct
• $130 per Form 1042-S if you correctly file more than 30
reporting NFFE, you must enter the entity's GIIN or the GIIN
days after the due date but by August 1; the maximum
of the sponsoring entity in box 13h or 15e (to the extent that
penalty is $1,993,500 per year ($664,500 for a small
you may rely on a sponsored entity's GIIN under the
business).
chapter 4 regulations or an applicable IGA for withholding
• $330 per Form 1042-S if you file after August 1 or you do
purposes).
not file correct Forms 1042-S; the maximum penalty is
$3,987,000 per year ($1,329,000 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 $660 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 $330 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 $3,987,000 for all failures to furnish correct recipient • The gross income you report in box 2 cannot be zero.
statements during a calendar year. If you provide the correct • The income code you report in box 1 must correctly reflect
statement on or before August 1, reduced penalties similar to the type of income you pay to the recipient.
those for failing to file a correct Form 1042-S with the IRS • The withholding agent's name, address, chapters 3 and 4
may be imposed. See Late filing of correct Form 1042-S, status codes, EIN, QI-EIN, WP-EIN, WT-EIN, and GIIN (if
earlier. If you intentionally disregard the requirement to report any) must be reported in boxes 12a through 12i.
correct information, each $330 penalty is increased to the • The recipient's name, address, U.S. TIN (if any), GIIN (if
greater of $660 or 10% of the total amount of items required any), and country code must be reported in boxes 13a
to be reported, with no maximum penalty. through 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.
• The country code that you report in boxes 13b and 15f
Avoid Common Errors must be present and correctly coded and cannot be “US”
To ensure that your Forms 1042-S can be correctly (unless the intermediary identified in line 15 is a U.S. branch
processed, be sure that you do the following. that is not treated as a U.S. person). Additionally, do not use
• Carefully read the information provided in Pub. 515 and “OC” except as specifically allowed in these instructions.
these instructions. • For direct account holders, you must report the recipient's
• Comply with the requirements in Pub. 1187 if you are an account number in box 13k. You may also be required to
electronic filer. report the recipient's FTIN, an LOB code (for an entity
• Complete all required fields. At a minimum, you must claiming treaty benefits), and the recipient's date of birth in
provide your unique form identifier at the top of the form as boxes 13j and 13l (see the instructions for box 13j and
well as the information requested in boxes 1, 2, 3, 7a, 12a, box 13l, later).
12b, 12c, 12d, 12f, 12h, 12i, 13a, 13b, 13c, and 13d. Other • The exemption code you report in box 3a must correctly
identify the proper tax status for the type of income you pay to

Instructions for Form 1042-S (2024) 23

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the recipient. The exemption code you report in box 4a must number can be used on a new original form in a subsequent
correctly identify the proper tax status for the type of income year.
you pay to the recipient or if exemption code 15 is used
(payee not subject to chapter 4 withholding), the chapter 4 Amended Checkbox
status code of the recipient must correctly reflect this See Amended Forms, later.
exemption.
• When reporting to Unknown Recipients, ensure that 30% Amendment Number
tax is withheld for amounts subject to chapter 3 or 4 If you are filing an amended Form 1042-S, you must provide
withholding, remitted to the IRS, and correctly reported on an amendment number. The amendment number must be
Form 1042-S. In such cases, the recipient's name should be numeric and the length must be exactly one digit. Each time
"Unknown Recipient." The recipient's chapter 3 and 4 status that you amend the same form (as determined by the unique
codes should also reflect "Unknown Recipient," and the form identifier), you must provide the amendment number in
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 generally is 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.
Unique Form Identifier obligors-general).
A withholding agent must provide a unique form identifier 5. Use code 24 (qualified investment entity (QIE)
number on each Form 1042-S that it files in the box provided distributions of capital gains) for distributions of capital gains
at the top of 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. or foreign TIN. 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

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7. Use code 33, 34, 35, 53, or 54 for all substitute withheld during the current calendar year that you are not
payment transactions. For more information, see Regulations depositing pursuant to the escrow procedure, see the
sections 1.861-2(a)(7) and 1.861-3(a)(6). For payments of instructions for box 7, later.
interest or substitute interest made by a withholding agent to 14. Use code 52 (dividends paid on certain actively traded
a QI that assumes primary withholding responsibilities for or publicly offered securities), 53 (substitute
substitute interest, the withholding agent and the QI should payments-dividends paid from certain actively traded or
use code 33 or 54. For payments of substitute dividends, a publicly offered securities), 51 (interest paid on certain
withholding agent should use code 34 or 53. See Rev. Proc. actively traded or publicly offered securities), 54 (substitute
2022-43 for more information on when a QI assumes primary payments-interest from certain actively traded or publicly
withholding responsibilities for substitute interest or dividend offered securities), and 13 (royalties paid on certain publicly
equivalents. offered securities) if the income paid is described in
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. or foreign TIN. 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 2022-37, when applicable) (a “combined 18. Income code 23 (other income) should be used only to
transaction”), use code 56 (dividend equivalents under IRC report U.S. source FDAP income that is not reportable under
section 871(m) as a result of applying the combined any other available income code.
transaction rules). For all other dividend equivalents, use If you paid more than one type of income to or on behalf of
code 40 (other dividend equivalents under IRC section the same recipient, you must complete a separate Form
871(m)). 1042-S for each income type.
11. Use code 41 (guarantee of indebtedness) for certain
guarantee of indebtedness payments. These are amounts Note. Although income codes are provided for short-term
paid for the provision of a guarantee of indebtedness that OID and notional principal contract income, those items are
was issued after September 27, 2010. not always subject to reporting on Form 1042-S. For example,
short-term OID may need to be reported by an NQI or
12. Use either code 42 (earnings as an artist or athlete – flow-through entity if those amounts are paid to foreign
no central withholding agreement) or 43 (earnings as an artist persons and another withholding agent backup withheld on
or athlete – central withholding agreement) for payments to those amounts under the presumption rules. Notional
an artist or athlete. A central withholding agreement is Form principal contract income is reportable if it is effectively
13930, Application for Central Withholding Agreement, plus connected with the conduct of a trade or business in the
additional information specified in the instructions for such United States or results in the payment of interest under
form, that is entered into by the artist or athlete, a designated Regulations section 1.446-3(g)(4) or a dividend equivalent
withholding agent, and the IRS. For more details, see Pub. under section 871(m) and the regulations thereunder (for
515. which a Form 1042-S is required). For more information, see
13. Use code 50 (income previously reported under the regulations under chapter 3 and Pub. 515.
escrow procedure) with respect to a recalcitrant account
holder of a dormant account for which a participating FFI Box 2, Gross Income
reported the income on Form 1042-S in a prior calendar year For each income type, enter the gross amount you paid (in
but for which the participating FFI was not required to deposit whole dollars) to or on behalf of the recipient during the
the tax withheld or determined that withholding was not calendar year, including withheld tax. See, however, the
required until the current calendar year under an applicable instructions for boxes 16a through 16e, later, for when you
escrow procedure. For additional information on the escrow must issue a separate Form 1042-S (or several Forms
procedure for dormant accounts, see Regulations section 1042-S) for income attributable to a PTP distribution. The
1.1471-4(b)(6). Also use code 50 for income reported on a following other special procedures apply to the reporting of
Form 1042-S in a prior calendar year for which tax withheld gross income.
was not deposited pursuant to the escrow procedure for • You must report the entire amount of a corporate
undetermined amounts of income and such withheld tax is distribution made with respect to stock even if you elect to
now required to be deposited in the current calendar year. reduce the amount of withholding on the distribution because
For additional information on the escrow procedure for all or a part of the distribution is nontaxable or represents a
undetermined amounts of income, see Regulations section capital gain dividend.
1.1441-3(d)(1). For instructions on reporting amounts

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

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Chapter 4 Exemption Codes withholding or subject to a reduced rate of withholding, and
the account holder requests a corrected form, you must
A withholding agent should use exemption code 13 submit a Form 1042-S providing the correct information. In
(grandfathered payment) for chapter 4 purposes only if the this situation, you must:
withholding agent makes a payment under a grandfathered • Indicate the correct rate of withholding that should have
obligation (as defined in Regulations section 1.1471-2(b)(2)) been applied to the income in boxes 3b or 4b;
and exemption code 13 is the only exemption code that • Enter the appropriate exemption codes, if any, in boxes 3a
applies. If another exemption code applies, it should be used and 4a;
instead of exemption code 13. • Enter the actual amount of U.S. federal tax withheld by the
other withholding agent in box 8;
A withholding agent should use exemption code 15 (payee • Provide the name and address of the actual recipient in
not subject to chapter 4 withholding) for chapter 4 purposes if boxes 13a through 13d along with the other required
the payment is a withholdable payment (as defined in information for the recipient;
Regulations section 1.1473-1(a)) but has not been withheld • Provide the name and EIN of the other withholding agent
upon under chapter 4 because of the payee's chapter 4 that actually withheld and deposited the tax (primary
status. Also, if the withholding agent applies the 90-day grace withholding agent) in boxes 14a and 14b; and
period for a withholdable payment following a change in • Report the account holder's U.S. TIN, if provided.
circumstances, use exemption code 15 (payee not subject to If you submit Form 1042-S as described above, you
chapter 4 withholding). ! must also submit Form 1042 and issue a Form
CAUTION 1042-S to each recipient (including any unknown
A withholding agent should use exemption code 16 recipient or U.S. payee) of the income to which withholding
(excluded nonfinancial payment) for chapter 4 purposes for was applied.
payments described in Regulations section 1.1473-1(a)(4)
(iii). However, the withholding agent should only use Special instructions for use of chapter 3 exemption co-
exemption code 16 if it is the only exemption code that des. If an amount was withheld under chapter 4, you may
applies. If another exemption code applies, it should be used also include a chapter 3 exemption code and tax rate in
instead of exemption code 16. boxes 3a and 3b to show the rate that would otherwise apply
as if the payment had been later determined to be exempt
A withholding agent should use exemption code 17 from withholding under chapter 4. This may be done, for
(foreign entity that assumes primary withholding example, to assist the beneficial owner in pursuing a claim for
responsibility) for chapter 4 purposes only if it makes a refund. In such a case, enter “4” as the chapter indicator in
payment to a QI that assumes primary withholding box 3 to show that withholding was applied under chapter 4.
responsibility, a WP, or a WT.
Boxes 3b and 4b, Chapter 3 and Chapter 4 Tax
A withholding agent should use exemption code 18 (U.S.
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 report “30.00” in box 3b. See Example 18, earlier, under
(Other–payment not subject to chapter 4 withholding) for Multiple Withholding Agent Rule. The tax rate on dividends
chapter 4 purposes if the payment is exempt from chapter 4 paid to a corporation created or organized in, or under the
withholding and no other chapter 4 exemption code applies. law of, the Commonwealth of Puerto Rico may be 10%,
A withholding agent should also use exemption code 21 rather than 30%. See Pub. 515 for more information.
(Other–payment not subject to chapter 4 withholding) when In the case of a specified federal procurement payment
using income code 37 (return of capital) to report subject to section 5000C withholding, the correct rate of
nondividend payments. 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

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treaty or the Internal Revenue Code, enter “00.00.” If the tax (ii) and/or 1.1441-3(d) must check box 7b (federal tax
rate is less than 10%, enter a zero before the tax rate (for withheld was not deposited with the IRS because escrow
example, “04.00” for 4%). procedures were applied). A withholding agent reporting
payments pursuant to the escrow procedure must report
If you withheld at more than one tax rate for a specific
such payments on separate Forms 1042-S. Box 7b must only
! type of income that you paid to the same recipient, be checked when using the escrow procedures as specified
CAUTION you must file a separate Form 1042-S for each
above.
amount to which a separate rate was applied.
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
also an amount subject to chapter 3 withholding and tax is
00.00 10.00 24.00 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
report the tax withheld under chapter 3.
04.00 12.50 27.50
Box 7c. Check box 7c if you are a partnership that received
04.90 14.00 28.00 an amount subject to withholding during the 2024 calendar
04.95 15.00 30.00 year (preceding year) and you are withholding on the amount
includible in a foreign partner’s share after March 15 of the
05.00 17.50 37.00
subsequent year (2025). Only check this box if you
07.00 20.00 designated the deposit as attributable to the preceding year
08.00 21.00 (2024). In such a case, the partnership will be required to
report the associated income and tax withheld on Forms
1042 and 1042-S for the preceding year. If a partnership
Exception for central withholding agreements. If you are withholds on a foreign partner’s share of income after March
the designated withholding agent who has entered into a 15 of the subsequent year, the due date for filing and
central withholding agreement and you report an amount in furnishing the applicable Form(s) 1042-S is September 15 of
box 2 using income code 43 (earnings as an artist or athlete – the subsequent year (2025). For example, if a partnership
central withholding agreement), you must enter a tax rate in withholds on April 1, 2025, with respect to a foreign partner’s
box 3b and you must include a chapter 4 exemption code 16 share of undistributed income for the 2024 calendar year, the
(excluded nonfinancial payment) in box 4a. partnership may designate the deposit as made for 2024 and
report the liability and tax withheld on the 2024 Form 1042
Box 5, Withholding Allowance
and the 2024 Form 1042-S for the partner. The partnership
This box should be completed only if the income code must also ensure that its chapter 3 status code on such forms
reported in box 1 is 16 (scholarship or fellowship grants), 17 properly reflects its status as a partnership (including as a
(compensation for independent personal services), 18 WP). The extended deadline of September 15, 2024, is also
(compensation for dependent personal services), 19 applicable when a partnership is reporting on Form 1042-S
(compensation for teaching), 20 (compensation during an allocation of income made after March 15 of the
studying and training), or 42 (earnings as an artist or subsequent year to a foreign partner for the prior year, but no
athlete-no central withholding agreement), and there is a withholding is required on the income. In such a case, box 7c
valid treaty claim that provides an exemption from must also be checked even if there is no withholding. For
withholding up to a specific amount. Report the amount more information, see proposed regulations issued on
exempt from withholding here. This box should not be used December 18, 2018 (REG-132881-17).
for reporting a personal exemption. If you are a designated
withholding agent that has entered into a central withholding Box 8. If you are a withholding agent filing a Form 1042-S to
agreement with the IRS, leave this box blank and report the report income that has already been subject to withholding by
gross amount paid to the recipient in box 2. See Pub. 515 for another withholding agent, enter the amount actually
more information. withheld by the other agent(s) in box 8.
Box 9, Overwithheld tax repaid to recipient pursuant to
Box 6, Net Income adjustment procedures. This box should be completed
Complete this box only if you entered an amount in box 5. only if you repaid a recipient under the reimbursement or
Otherwise, leave it blank. set-off procedure during the 2025 calendar year in
accordance with the requirements of Regulations section
Boxes 7a Through 11, Federal Tax 1.1461-2(a)(2) or (3) (for withholding under chapter 3), or
Withheld Regulations section 1.1474-2(a)(3) or (4) (for withholding
under chapter 4).
Box 7a. Enter the total amount of U.S. federal tax you If you repaid the recipient under the reimbursement or
actually withheld in box 7a under chapter 3 or 4. If you did not set-off procedure during the 2024 calendar year, do not
withhold any tax, enter “-0-.” complete box 9. Instead, reduce the amount of withholding
Box 7a must be completed in all cases, even if no tax reported in box 7a.
! has been deposited. In most cases, an intermediary or flow-through entity
CAUTION
should not enter an amount in box 9 unless it is a QI that
Box 7b. A withholding agent that withheld tax during the represented on its Form W-8IMY that it is assuming primary
calendar year and that was not required to deposit with the withholding responsibility or is a WP or WT.
IRS the tax withheld during the calendar year pursuant to the
escrow procedure under Regulations sections 1.1471-2(a)(5)

28 Instructions for Form 1042-S (2024)

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The adjustment for amounts overwithheld applies to Note. Withholding agents that are U.S. governmental entities
! partnerships, brokers, or nominees required to or U.S. tax-exempt entities, including colleges and
CAUTION withhold under sections 1446(a) and (f) starting in universities, and other U.S. tax-exempt entities under the
2023. Internal Revenue Code other than under section 501(c), may
use chapter 3 status code 20 (Tax exempt organization
Note. If the withholding agent meets the above (Section 501(c) entities)) for box 12b.
requirements, the withholding agent may make adjustments
to overwithholding using either the reimbursement or set-off Note. A withholding agent should in general select the
procedure until the extended due date for filing Form 1042-S chapter 3 status code that most closely applies with its status
(or, if earlier, the date on which the Form 1042-S is either filed based on the available codes. For example, if a U.S. financial
or furnished). Additionally, a withholding agent may use the institution (which checks chapter 4 status code 01, as such,
extended due date for filing a Form 1042 to claim a credit for unless it is a foreign branch) is a corporation, it should use
any adjustments made to overwithholding. chapter 3 status code 15 (Corporation).

Box 10. Enter in box 10 the combined amounts reported in Boxes 12d Through 12i, Withholding
box 7a (federal tax withheld), box 8 (tax withheld by other
agents), and box 9 (overwithheld tax repaid to recipient Agent's Name, GIIN, Country Code,
pursuant to adjustment procedures). Foreign TIN (if any), and Address
Example. If the box 7a amount is $600, the box 8 amount Enter your name and address in the appropriate boxes. If
is $120, and the box 9 amount is ($50), the box 10 amount your post office does not deliver mail to the street address
will equal $670. and you have a P.O. box, show the box number instead of the
street address.
Box 10 must be completed in all cases, even if no tax
! has been deposited. Note. On statements furnished to individual recipients of
CAUTION
U.S. source deposit interest, in addition to your name and
Box 11, Tax paid by withholding agent (amounts not address, you must include the telephone number of a person
withheld). Enter the total amount of tax paid by you and not to contact. This number must provide direct access to an
withheld from the payment to the recipient. The amounts individual who can answer questions about the statement.
reported in box 11 should be the amounts paid by the The telephone number is not required on Copy A of paper
withholding agent from its own funds rather than through forms or on electronically filed forms.
withholding from the payment to the recipient. Any amount Box 12e, Withholding agent's GIIN. The GIIN provided, if
reported in this box must not be included in box 10. any, should be the GIIN issued to the branch of, or
disregarded entity owned by, the participating FFI or
Box 12a, Withholding Agent's registered deemed-compliant FFI that is making the
Employer Identification Number (EIN) payment.
You are required to enter your EIN. However, if you are filing Box 12f, Country code. You must enter the code (from the
Form 1042-S as a QI, WP, or WT, enter your QI-EIN, WP-EIN, list at IRS.gov/CountryCodes) for the country for which you
or WT-EIN. The withholding agent's EIN cannot be are resident under that country's tax laws. Enter “OC” (other
truncated. country) only when the country of residence does not appear
on the list.
If you don’t have an EIN, you may apply for one online by
visiting IRS.gov/businesses/small-businesses-self-employed/ Note. If the withholding agent is a U.S. person or a foreign
employer-id-numbers. If you are outside the United States, branch of a U.S. person, enter “US” in box 12f (even though
you may also apply for an EIN by calling 267-941-1099 (not a “US” is not a code on the list at IRS.gov/CountryCodes).
toll-free number). You may also apply for an EIN by faxing or
mailing Form SS-4 to the IRS. File amended Forms 1042-S Boxes 13a Through 13d, Recipient's
when you receive your EIN.
Name, Country Code, and Address
To get a QI-EIN, WP-EIN, or WT-EIN, submit Form SS-4 Box 13a, Recipient's name. Enter the complete name of
with your application for that status. (See the definitions for the recipient in box 13a.
Qualified intermediary (QI) and Withholding foreign • If you do not know the name of the recipient, or are
partnership (WP) or withholding foreign trust (WT) under required to use the recipient status codes for an unknown
Definitions, earlier, for more information.) recipient, enter “Unknown Recipient.” Also enter "Unknown
Recipient" if you pay an amount realized subject to section
Boxes 12b and 12c, Withholding 1446(f) withholding to an NQI and you do not agree with the
Agent's Chapter 3 and Chapter 4 NQI to report the NQI's account holders on Form 1042-S.
• If Form 1042-S is being completed by a QI, WP, or WT for
Status Code a chapter 3 withholding rate pool or chapter 4 withholding
Enter the withholding agent status code(s) from the list of pool, enter “Withholding rate pool” if withholding under
Recipient Status Codes in Appendix B, later. You must enter chapter 3 was applied, or, if chapter 4 withholding was
both a chapter 3 and a chapter 4 withholding agent status applied, a description of the chapter 4 reporting pool (for
code regardless of the type of payment being made. If you example, “Nonparticipating FFI Pool”) in box 13a.
are a U.S. financial institution (USFI), indicate your chapter 4 • A withholding agent reporting payments made to a
status code as 01, except when a foreign branch of a USFI participating FFI or registered deemed-compliant FFI with
issues Form 1042-S (in such a case, indicate the chapter 4 respect to a chapter 4 reporting pool must include the name
status code as 50). and address of the FFI in boxes 13a through 13g as well as

Instructions for Form 1042-S (2024) 29

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the FFI's GIIN and country code. The GIIN reported must be these recipients (excluding a recipient receiving a payment
the GIIN of the branch to whom the withholding agent is subject to section 1446(a) or (f) withholding), enter exemption
making the payment. code 01 in box 3a or exemption code 14 in box 4a.
• A QI reporting payments made to a PAI on a withholding • Any foreign person claiming a reduced rate of, or
rate pool basis must include the name and address of the PAI exemption from, tax under a tax treaty between a foreign
in boxes 13a through 13g. country and the United States, unless the recipient provides
• In the case of foreign joint owners, Form 1042-S can only an FTIN (in such case, use box 13i), or unless the income is
list one of the owners as the recipient in box 13a. Form an unexpected payment (as described in Regulations section
1042-S must not be completed with more than one of the 1.1441-6(g)) or consists of dividends and interest from stocks
joint owners as the recipient. and debt obligations that are actively traded; dividends from
• If the recipient is a QI acting as a QDD with respect to the any redeemable security issued by an investment company
payment, enter the name of the QDD (identifying the QDD by registered under the Investment Company Act of 1940
the name used for the QDD on the Form W-8IMY it provides, (mutual fund); dividends, interest, or royalties from units of
which should include a branch identifier, if applicable). beneficial interest in a unit investment trust that are (or were,
• If a disregarded entity (or a branch) that is required to upon issuance) publicly offered and are registered with the
provide a TIN on Form W-8IMY is identified in Part II of the Securities and Exchange Commission under the Securities
Form W-8BEN-E, include the name of the disregarded entity Act of 1933; and amounts paid with respect to loans of any of
(or the jurisdiction of the branch) in a parenthetical after the the above securities. In the latter case, you must use income
name of the recipient. code 13, 51, 52, 53, or 54.
Box 13b, Recipient's country code. You must enter the • Any nonresident alien individual claiming exemption from
tax under section 871(f) for certain annuities received under
code (from the list at IRS.gov/CountryCodes) for the country
qualified plans.
of which the recipient claims residency under that country's
tax laws. Enter “OC” (other country) only when the country of • A foreign organization claiming an exemption from tax
solely because of its status as a tax-exempt organization
residence does not appear on the list or the payment is made
under section 501(c) or as a private foundation.
to an international organization (for example, the United
Nations). If the recipient is unknown, leave box 13b blank and • Any QI other than a disclosing QI (which is not a recipient).
enter "Unknown Recipient" in box 13a, Recipient's name. If • Any WP or WT.
you are making a payment to a QI, QSL, WP, or WT, or if you • Any nonresident alien individual claiming exemption from
withholding on compensation for independent personal
are a QI, QSL, WP, or WT and are making a payment to a QI,
services.
WP, or WT withholding rate pool, enter the country code of
the QI, QSL, WP, or WT. Also, if you are making a payment to • Any U.S. branch of an FFI or territory FI that is treated as a
U.S. person.
a participating FFI or registered deemed-compliant FFI's
chapter 4 reporting pool, enter the country code of the • Any QSL that was paid a substitute dividend.
participating FFI or registered deemed-compliant FFI or In all other cases, if you know the recipient's TIN or if a
branch of or disregarded entity owned by such FFI receiving foreign person provides a TIN on Form W-8, but is not
the withholdable payment and that was listed on Part II of required to do so, you must include the TIN on Form 1042-S.
either the Form W-8BEN-E or W-8IMY. A U.S. TIN is also required on a Form 1042-S used by a
If exemption code 04 (exempt under tax treaty) recipient to claim credit for (or a refund of) the withholding.
! appears in box 3a or if a reduced rate of withholding You must include a GIIN if you are required to collect a
CAUTION based on a tax treaty is entered in box 3b, the
country code entered in box 13b must be a country with GIIN for the recipient under the requirements documenting
which the United States has entered into an income tax the payee under chapter 4. If you make a payment to a
treaty. disregarded entity or branch that is identified in Part II of Form
W-8BEN-E, then report the GIIN of the disregarded entity or
Boxes 13c and 13d, Recipient's address. In most cases, branch provided in that section.
you must enter a foreign address in boxes 13c and 13d.
However, there are limited exceptions. For example, you may Boxes 13f and 13g, Recipient’s
enter a U.S. address when reporting payments of scholarship Chapter 3 and Chapter 4 Status
or fellowship grants (income code 16).
Codes
For addresses outside the United States or its
commonwealths and territories, follow the foreign country's Enter the recipient status code from the list of Recipient
practice for entering the postal code. Status Codes in Appendix B, later. The following special
instructions apply for chapter 3 status codes.
For addresses within the United States, use the U.S. If income code 42 (earnings as an artist or athlete – no
•
Postal Service two-letter abbreviation for the state name. Do central withholding agreement) or 43 (earnings as an artist or
not enter “United States” or “U.S.” athlete – central withholding agreement) is used in box 1, use
If you want to enter the recipient's account number, use recipient code 22 (artist or athlete) instead of recipient code
box 13k. 16 (individual), 15 (corporation), or 08 (partnership other than
withholding foreign partnership or publicly traded
Boxes 13e and 13h, Recipient's U.S. partnership).
TIN and GIIN • If you are making a payment to an NQI or flow-through
entity, in most cases you must use the recipient code that
You must obtain and enter a U.S. TIN for any of the following
applies to the type of recipient who receives the income from
recipients.
the NQI or flow-through entity.
• Any recipient whose income is effectively connected with
the conduct of a trade or business in the United States. For • Use recipient code 08 (partnership other than withholding
foreign partnership or publicly traded partnership) only if you

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are reporting a payment of income that is effectively entity that is a participating FFI or registered
connected with the conduct of a trade or business of an NWP deemed-compliant FFI.
in the United States or that is subject to reporting under • Only use recipient code 15 (nonparticipating FFI) or 30
section 1446(f). You may, however, use recipient code 08 as (recalcitrant account holder) if you are reporting directly to the
the chapter 3 status code if you are using a chapter 4 pooled recipient. See Amounts paid to an NQI or flow-through entity
reporting code with respect to a payment made to an NWP. of withholdable payments, earlier. If you are reporting the
See the instructions later on use of recipient codes when chapter 4 reporting pools of recalcitrant account holders of a
reporting pools. Otherwise, follow the rules that apply to participating FFI, registered deemed-compliant FFI, or QI,
payments to flow-through entities. use codes 42 through 49. Only use chapter 4 reporting pool
• Use recipient code 21 (Unknown Recipient) only if you code 48 (U.S. payees pool) if a participating FFI or registered
have not received a withholding certificate or other deemed-compliant FFI has provided a Form W-8IMY
documentation for a recipient or you cannot determine how certifying that it meets the requirements to include the
much of a payment is reliably associated with a specific account holder in a withholding rate pool of U.S. payees and
recipient, or you pay an amount realized subject to section that is associated with a withholding statement allocating the
1446(f) withholding to an NQI and you do not agree with the payment or a portion of the payment to a chapter 4
NQI to report the NQI's account holders on Form 1042-S. Do withholding rate pool of U.S. payees. Only use chapter 4
not use this code because you cannot determine the reporting pool code 49 (QI-Recalcitrant Pool-General) if you
recipient's status as an individual, corporation, etc. The are reporting recalcitrant account holders of a QI.
regulations under chapter 3 provide rules on how to • Use recipient code 17 (U.S. branch - treated as a U.S.
determine a recipient's status when a withholding agent does person) if you are making a payment to a U.S branch treated
not have the necessary information. as a U.S. person (or recipient code 04 for a Territory FI
• Use recipient code 13 (qualified securities lender – treated as a U.S. person).
qualified intermediary) or 14 (qualified securities lender – • Use recipient code 26 (excepted NFFE – other) if you are
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 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 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 • Use recipient code 33 (U.S. reportable account) if you are
respect to a payment, do not include a chapter 4 status code reporting the recipient's account as a U.S. reportable account
unless making such payment to a PAI or certain partnerships under the terms of a Model 1 IGA and the recipient does not
or trusts. See Amounts Paid to PAIs and Amounts Paid by meet the applicable requirements to be included in a pool of
QIs to Certain Partnerships and Trusts, earlier. U.S. payees because the account holder is subject to
• Use recipient code 35 (qualified derivatives dealer) if you chapter 3 withholding.
make a payment to a QI that is acting as a QDD with respect • Use recipient code 34 (Nonconsenting U.S. account) if you
to the payment. are reporting the recipient's account as a nonconsenting U.S.
• A U.S. withholding agent making a payment to any other account under the terms of a Model 2 IGA and the recipient
QI (other than a disclosing QI) should use recipient code 12 does not meet the applicable requirements to be included in
and recipient code 09 or 11 if it is making a payment to a WP a pool of U.S. payees because the account holder is subject
or WT, respectively. to chapter 3 withholding.
• Use recipient code 05 (U.S. branch-treated as U.S. • Use recipient code 37 (undocumented preexisting
person) if you make a payment to a U.S. branch or territory FI obligation) for an obligation that a withholding agent has not
treated as a U.S. person. documented and the payment being reported was made
before the expiration of the time period allowed for
A chapter 4 status code is required only if the payment documenting the obligation and thus the withholding agent
is a withholdable payment or when a participating FFI or was not required to apply the presumption rules to determine
registered deemed-compliant FFI provides a chapter 4 the payee's chapter 4 status.
withholding rate pool of U.S. payees. The chapter 4 status • Use recipient code 39 (account holder of excluded
code may be determined under the applicable IGA by a financial account) if you are reporting amounts paid with
withholding agent that is an FFI subject to such an respect to an obligation that is excluded from the definition of
agreement. The following special instructions apply for financial account for chapter 4 purposes (see Regulations
chapter 4 status codes. section 1.1471-5(b)(2)).
• If you are making a withholdable payment to a U.S. branch • Use recipient code 41 (NFFE subject to 1472 withholding)
of an FFI, use the applicable chapter 4 status code for the if you are reporting amounts paid to a specific recipient that is
country of residence for an entity that is a participating FFI or an NFFE that you (or another withholding agent) withheld
registered deemed-compliant FFI. Otherwise, use the upon under section 1472 (that is, you are reporting amounts
chapter 4 status code for any other foreign branch of the

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in boxes 7 through 9) unless the NFFE is treated as a 
                                                                 Box 13k, Recipient’s Account Number
recalcitrant account holder under Regulations section 
1.1471-5(g), in which case, use code 30 (recalcitrant account    If you are a financial institution reporting amounts paid to your 
holder).                                                         direct account holder with respect to an account maintained 
• If you received a withholding certificate or other             by you at your U.S. office or U.S. branch, you must report the 
documentation with respect to a withholdable payment from        recipient’s account number in box 13k. If the amount is paid 
an intermediary or flow-through entity that is a participating   through an NQI or flow-through entity, you are not required to 
FFI or deemed-compliant FFI (other than a WP, WT, or QI that     use this box.
assumes primary withholding responsibility) and cannot 
                                                                 Note. A U.S. financial institution or a U.S. branch of an FFI is 
reliably associate the payment with documentation to 
                                                                 required to report payments of the same type of income (as 
determine the payee's chapter 4 status (or with a chapter 4 
                                                                 determined by the income code in box 1) made to multiple 
withholding rate pool), you must report the recipient as 
                                                                 financial accounts held by the same beneficial owner at a 
“Unknown Recipient” and include the entity's information in 
                                                                 U.S. office of such institution on a separate Form 1042-S for 
boxes 15a through 15i (to the extent provided).
                                                                 each account. For this purpose, a financial account is an 
• If you are reporting a chapter 4 pooled reporting code with 
                                                                 account described in Regulations section 1.1471-5(b)(1). 
respect to a withholdable payment to an intermediary or 
                                                                 Report the identifying number assigned to such account (or 
flow-through entity, use the chapter 3 status code for the 
                                                                 its functional equivalent in the absence of an account number 
intermediary or flow-through entity as the recipient code.
                                                                 for the recipient).
• If you are a QI, WP, or WT reporting direct account holders, 
do not include a chapter 3 status code for the recipient if you  Box 13l, Recipient’s Date of Birth
are using a chapter 4 reporting pool code as the recipient’s 
chapter 4 status code.                                           Use box 13l to enter the recipient’s date of birth. The correct 
• If you are making a withholdable payment to a recipient        format if entered is YYYYMMDD (for example, enter 
that is a restricted distributor (as defined in Regulations      “20001205” for a date of birth of December 5, 2000). A 
section 1.1471-5(f)(4)), use recipient code 10 (certified        financial institution making a payment with respect to a 
deemed-compliant FFI - other).                                   financial account (as defined in Regulations section 
                                                                 1.1471-5(b)) maintained at its U.S. office or U.S. branch must 
Box 13i, Recipient's Foreign Tax                                 report the recipient's date of birth (if the recipient is an 
                                                                 individual) to the extent that such recipient has furnished 
Identification Number                                            documentation that provides a date of birth or the recipient's 
Use box 13i to enter the recipient’s identification number       date of birth is identified in any of the withholding agent's 
used in the recipient’s country of residence for tax purposes.   files. See Regulations section 1.1441-1(e)(2)(ii)(B) for more 
                                                                 information regarding a withholding agent's obligation to 
  You must obtain and enter an FTIN for any of the following     obtain and report a recipient's date of birth.
recipients.
• Any foreign person claiming a reduced rate of, or              Boxes 14a and 14b, Primary 
exemption from, tax under a tax treaty between a foreign 
country and the United States if such person did not provide     Withholding Agent's Name and EIN
a U.S. TIN and the income is not the type for which an           If you are an intermediary or flow-through entity reporting 
exemption from the TIN requirement applies (see the              amounts withheld by another withholding agent (the primary 
instructions for boxes 13e and 13h, earlier).                    withholding agent) in box 8, you must provide the name and 
• Any recipient of a payment made with respect to a financial    EIN of the withholding agent that withheld the tax. If multiple 
account (as defined in Regulations section 1.1471-5(b))          withholding agents withheld amounts reported on the same 
maintained at your U.S. office or branch, if you are a financial Form 1042-S, report the name of any one of the withholding 
institution, to the extent that such recipient has furnished a   agents that withheld amounts. Otherwise, leave blank.
withholding certificate that provides an FTIN, or you obtain 
the FTIN under the alternative procedures described in           Box 15, Pro-Rata Basis Reporting 
Regulations section 1.1441-1(e)(2)(ii)(B), or the recipient's 
                                                                 Checkbox
FTIN is identified in any of your electronically searchable 
information. See Regulations section 1.1441-1(e)(2)(ii) for      Withholding agents must check box 15 to notify the IRS that 
more information regarding a withholding agent's obligation      an NQI that used the alternative procedures of Regulations 
to obtain and report a recipient's FTIN.                         section 1.1441-1(e)(3)(iv)(D) failed to properly comply with 
                                                                 those procedures. See Pro-rata reporting to NQI, earlier, for 
Box 13j, LOB Code                                                additional information.
If you are making a payment for which a beneficial owner that 
                                                                 Boxes 15a Through 15i, Intermediary/
is an entity has claimed a reduced rate of withholding under 
an income tax treaty and has provided documentation that         Flow-Through Entity's Name, Status 
establishes the limitation on benefits (LOB) article under 
which the beneficial owner qualifies, enter the applicable       Code, Country Code, Address, EIN, 
LOB code from Appendix B, later. See the Instructions for        GIIN, and Foreign Tax Identification 
Form W-8BEN-E for a description of each of the LOB codes. 
If you are a QI, WP, or WT reporting a chapter 3 pool for        Number
which a reduced rate of withholding under an income tax          If you are reporting amounts subject to reporting for chapter 3 
treaty applies, do not include an LOB code.                      or 4 purposes paid to a recipient whose withholding 
                                                                 certificates or other documentation has been submitted to 
                                                                 you (or should have been submitted to you) with a Form 
                                                                 W-8IMY provided by an intermediary or flow-through entity, 

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you must include the name and address of the intermediary withholding included on each form. Therefore, the total
or flow-through entity with whose Form W-8IMY the amounts reported on Forms 1042-S in box 2 (gross income)
recipient's Form W-8 or other documentation is associated. resulting from the distribution may, in some cases, exceed the
You must also include the intermediary or flow-through actual amount of the distribution.

entity's chapter 3 and chapter 4 status codes and, if any, the Boxes 17a Through 17c, State Income
TIN and GIIN of the intermediary or flow-through entity when
provided or required to be collected by the withholding agent. Tax Withheld and Related Information
If the intermediary or flow-through entity completed Part II of Include in these boxes information relating to any state
Form W-8IMY, then report the GIIN provided in that section. If income tax withheld.
you are making a payment to a U.S. branch not treated as a
U.S. person that has certified that it is applying the rules in Amended Forms
Regulations section 1.1471-4(d)(2)(iii)(C) (in order to avoid If you filed a Form 1042-S with the IRS and later discover you
being withheld upon under chapter 4), use chapter 4 made an error on it, you must correct it as soon as possible.
intermediary code 18 (U.S. branch - not treated as a U.S. To correct a previously filed Form 1042-S, you will need to file
person (reporting under section 1471)). an amended Form 1042-S. The amended form must have the
same unique form identifier as the original form that is being
Note. A withholding agent that is an intermediary or amended. You must check the “Amended” box and provide
flow-through entity will leave these boxes blank unless it is the amendment number. The amendment number must be
making the payment to an intermediary or flow-through entity. numeric and the length must be exactly one digit. Each time
Box 15f, Country code. You must enter the country code that you amend the same form (as determined by the unique
(from the list at IRS.gov/CountryCodes) for the country where form identifier), you must provide the amendment number in
the intermediary or flow-through entity is located. the box provided on the form (using “1” for the first
amendment and increasing sequentially for each subsequent
Box 15g, Intermediary or flow-through entity's foreign
amendment).
tax identification number. Use box 15g to enter the
intermediary or flow-through entity's identifying number used
in the country of residence for tax purposes. Box 15g is If you provide an amended Form 1042-S to a
optional. ! recipient, you must also file the amended form with
CAUTION the IRS.
Boxes 16a Through 16e, Payer's
Do not file an amended return if you provided Form
Name, TIN, GIIN, and Status Code 1042-S to the recipient (Copies B, C, and D) and need to
See the definition of authorized agent, earlier, under make corrections to such form prior to filing with the IRS. In
Definitions. Include the payer's name, TIN, and GIIN if such a case, you should file an original Form 1042-S with the
different from the withholding agent shown in boxes 12a, 12d, correct information. Do not check the “Amended” box or
and 12e. indicate any amendment number. Provide a copy of the
If payment is being made by a transfer agent or a paying corrected Form 1042-S to the recipient. Note that the copies
agent acting as a withholding agent on behalf of a payer, of the Form 1042-S provided to the recipients (Copies B, C,
enter the chapters 3 and 4 status codes applicable to the and D) must match the copy of the Form 1042-S that is filed
status of the payer in boxes 16d and 16e. with the IRS.
If you are a nominee that is the withholding agent for the If any information you correct on Form(s) 1042-S changes
amount of a PTP distribution subject to withholding under the information you previously reported on Form 1042, you
section 1446(a) (reporting income code 27), enter the PTP's must also correct the Form 1042 by filing an amended return.
information in boxes 16a through 16e. However, you must To do this, see the Form 1042 instructions.
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 If you are not filing electronically, follow these steps to
the distribution. This includes information in your securities amend a previously filed Form 1042-S.
master file (or similar document), or that is reported in a Step 1. Prepare a paper Form 1042-S.
qualified notice issued by the PTP during the year of the
distribution. A nominee should also enter the PTP information • Enter all the correct information on the form, including the
when using income code 58 (undetermined income) to report recipient name and address, money amounts, and codes.
a PTP distribution or when using income code 57 to report an • Enter an “X” in the “Amended” box at the top of the form
amount realized attributable to a PTP distribution. and enter the amendment number.
Amended checkbox. Enter an “X” in the “Amended”
Note. You must issue a separate Form 1042-S to complete checkbox of Copies A, B, C, D, and E only if you are
boxes 16a through 16e for each PTP that makes a amending a Form 1042-S you previously filed with the IRS.
distribution of any of these types of income to the recipient. You must provide statements to recipients showing the
This requirement does not apply to a withholding agent or QI corrections as soon as possible regardless of the change to
when reporting on a Form 1042-S using reporting pools. the Form 1042-S.
A PTP may report the same amount of a PTP distribution
Step 2. File the amended paper Form 1042-S with a Form
on a qualified notice as subject to both section 1446(f)
1042-T. See the Form 1042-T instructions for information on
withholding and other chapter 3 or 4 withholding (such as
filing these forms.
under section 1446(a)). See Regulations sections
1.1446-4(b)(4) and 1.1446(f)-4(c)(2)(iii). In this case, you If you fail to correct Form(s) 1042-S, you may be
must report the same amount on separate Forms 1042-S, ! subject to a penalty. See Penalties, earlier.
with the appropriate income code and associated amount of CAUTION

Instructions for Form 1042-S (2024) 33

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unless the form displays a valid OMB control number. Books
Privacy Act and Paperwork Reduction Act Notice. We or records relating to a form or its instructions must be
ask for the information on this form to carry out the Internal retained as long as their contents may become material in the
Revenue laws of the United States. Sections 1441, 1442, administration of any Internal Revenue law. Generally, tax
1446 (for PTPs), 1471, and 1472 require withholding agents returns and return information are confidential, as required by
to report and pay over to the IRS taxes withheld from certain section 6103.
U.S. source income. Form 1042-S is used to report the
amount of income and withholding to the payee. Form 1042 The time needed to complete and file this form will vary
is used to report the amount of withholding that must be paid depending on individual circumstances. The estimated
over to the IRS. Section 6109 requires you to provide your average time is 34 minutes.
identification number. Routine uses of this information
include giving it to the Department of Justice for civil and If you have comments concerning the accuracy of these
criminal litigation, and to cities, states, the District of time estimates or suggestions for making this form simpler,
Columbia, and U.S. commonwealths and territories for use in we would be happy to hear from you. You can send us
administering their tax laws. We may also disclose this comments from IRS.gov/FormComments. Or you can write to
information to other countries under a tax treaty, to federal Internal Revenue Service, Tax Forms and Publications, 1111
and state agencies to enforce federal nontax criminal laws, or Constitution Ave. NW, IR-6526, Washington, DC 20224. Do
to federal law enforcement and intelligence agencies to not send the form to this address. Instead, see Where, When,
combat terrorism. If you fail to provide this information in a and How To File, earlier.
timely manner, you may be liable for penalties and interest.
You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act

34 Instructions for Form 1042-S (2024)

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Index
 
                                     Foreign country codes   2
A                                    Foreign financial institution    6       Q
Account holder    5                  Foreign person   7                       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 33,         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     22
                                     Net income    28                         Specified notional principal 
C                                                                              contract    8
                                     Non-exempt recipient   7
Chapter 3 or 4 status code   29 30,  Nonfinancial foreign entity      7       Specified U.S. person  8
Chapter indicator   26               Nonparticipating FFI 6                   Substantial U.S. owner  8
Combined reporting    5              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  4                non-recipients  16
  Hardship waiver   4                Payments to recipients  13               V
Excepted nonfinancial foreign        Penalties 23                             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    32
                                                                              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

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

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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 or 
03        Income is not from U.S. sources                                             Publicly Traded Partnership
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
                                                                                      Pooled Reporting Codes12
                                                                            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 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.

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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 Account13
05 Participating FFI – Other 40 Passive NFFE reported by FFI14
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-General15
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

13 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.
14 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.
15 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.

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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 a "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 (UFI) in the applicable entry field at the top of Form 1042-S. For additional information, including UFI
requirements, see the instructions for 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 would
12a Withholding agent's EIN required complete.

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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 would
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 would 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 would 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 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.

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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 a "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 (UFI) in the applicable entry field at the top of Form 1042-S. For additional information, including UFI 
requirements, see the instructions for 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 would 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.

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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 would 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 would 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 would 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.

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