Tax & Accounting Blog

Form 1042-S Information Reporting to Non-U.S. Persons Part 3: Form 1042-S Codes

ONESOURCE, ONESOURCE Nonresident Alien Taxation, Tax Information Reporting, Trust Tax, Uncategorized March 18, 2013

Unlike Form 1099 reporting, there is only one Form 1042-S information return, which is used for many types of income recipients and many income types. The recipients and income types must be identified on Form 1042-S by the appropriate Recipient Code and Income Code respectively. If an exemption from withholding has been allowed, the reason for the exemption must be indicated by the Exemption Code. For example, an exemption from tax under an applicable tax treaty provision is indicated by Exemption Code 04. If the tax rate is reduced but not eliminated, however, the Exemption Code must be 00 according to Form 1042-S instructions. These codes and their definitions are listed with the Form 1042-S. These lists must be provided with the recipient copies of Form 1042-S. The lists are also included in the instructions for Form 1042-S along with a Country Code list.