A 1042-S form is a form issued by the IRS used to report payments made to foreign employees or students who are subject to income tax withholding. Anyone who is subject to income tax withholding is still help responsible for turning in a 1042-S form even in the event of a tax exemption or if no payments were issued. The 1042-S form, also known as the Foreign Person’s US Source Income Subject to Withholding, is used to report income and income tax withholding for the most recent taxable year.


Who Needs One?


Foreign employees and international students who are not considered residents, but rather non-resident aliens working in the United States must fill out a 1042-S form because they are subject to income tax withholding. Any document ranging from rent and income to pensions and royalties must be reported on a 1042-S form for each individual non-resident alien.


For students, anything related to university expenses such as scholarships, grants, awards, or fellowships that were not considered part of their income must be reported on a 1042-S form. A 1042-S form can be considered similar to a W-2 form that American employees must fill out with their TIN and SSN, as well as other personal information in order to complete tax filing.


What to Do


The 1042-S form can be filed as a paper copy or electronically, however doing it electronically will keep your record straight and will be much faster to complete. In addition to the general information that could also be found on a W-2 form for Americans, those filling out a 1042-S form must also include the reporting of payments made and amounts withheld under what was previously known as the Foreign Account Tax Compliance Act (FATCA). This general information will usually include material such as taxpayer identification number for foreigners, Social Security Number, date of birth, and other additional information. This is a new addition to the 1042-S form, which was added at the beginning of 2014.


The 1042-S form also requires that the name and employer identification number (EIN) of the withholding agent who withheld the tax from the foreign employee be reported on their 1042-S form. A withholding agent is someone who has control of the income of a foreign employee who is subject to income tax withholding.

Common Mistakes to Avoid


Whether this is your first time filling out a 1042-S form or not, remember to take your time in order to avoid common mistakes. You should read all information so as not to skip over anything important or leave any part blank that could result in a penalty.


Be honest, as failing to report proper income amounts or additional information can also result in a fine or penalty. Lastly, in order to complete your 1042-S reporting form, rely on previous forms that you had filled out for your employer to make the process go a lot easier.


Filing your 1042-S form online is easy with WageFiling. WageFiling is an e-filing website that helps you keep all reports and documents in one place so that you can refer back to old forms and use them to fill out new ones. WageFiling makes it easier to file your taxes and even sends off the forms once they are completed so you do not have to worry about printing them out and mailing them yourself.