TaxBandits Knowledge Base

Who Must File Form 1042-S?

Every withholding agent must file Form 1042-S to report amounts paid to foreign persons during the preceding calendar year if those amounts are subject to reporting. A withholding agent includes any person, U.S. or foreign, who has control, receipt, custody, disposal, or payment of U.S.-sourced income subject to withholding.

Withholding agents who are individuals are not required to file if the payment is not part of a trade or business and no withholding was required.

You must file Form 1042-S even if you did not withhold tax under Chapter 3, including when:

• The income is exempt under a U.S. tax treaty or the Internal Revenue Code.
• The income is effectively connected with a U.S. trade or business.
• You refunded the withheld tax to the recipient.

Payments to bona fide residents of U.S. territories may not require Form 1042-S reporting if the recipient is a U.S. citizen, national, or resident alien. If you file Form 1042-S, you must also file Form 1042, the Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.