The Form 1042-S instructions and IRS Publication 1187, “Specifications for Filing Form 1042S, Foreign Person’s U.S. Source Income Subject to Withholding, Electronically” explain valid data for the fields. In order to process forms correctly, the following fields on Form 1042-S must be completed:
• Box 1, Income Code
• Box 2, Gross Income
• Box 5, Tax Rate
• Box 6, Exemption Code
• Box 7, Federal Tax Withheld
• Box 9, Total Tax Withheld
• Box 11, Withholding Agent’s EIN
• Box 12, Withholding Agent’s Name and Address
• Box 13, Recipient’s Name, Recipient Code, and Address
• Box 16, Recipient’s Country Code
Recipient Address should be blank for Recipient Code 20 (unknown recipient). Per Form 1042-S instructions, Box 3, Withholding Allowance and Box 4, Net Income apply only to Income Codes 15-19.
The Form 1042-S instructions explain when no recipient’s Taxpayer Identification Number (TIN) is required in Box 13. For example, no U.S. TIN is required if taxes were withheld at the statutory rate, generally 30 percent, but 14 percent on scholarship and fellowship grants (Income Code 15) paid to recipients in F, J, M, or Q immigration status. The income recipient’s U.S. TIN is generally required if the record indicates an exemption from, or reduction in, the statutory rate. There is a U.S. TIN exception for investment income from publicly traded investments and their related loans. A record lacking the recipient’s required U.S. TIN will result in under withheld tax plus penalties and interest.
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