What are Chapter 3 or Chapter 4 codes in Form 1042-S?

Last modified 2/16/2024 2:01:58 AM EST

On Form 1042-S, Chapter 3 and Chapter 4 codes indicate the withholding tax rules that apply to the payment made to the foreign recipient.

Chapter 3 and Chapter 4 Overview

• Chapter 3 (Sections 1441–1446) applies to withholding on payments to foreign persons based on U.S. tax treaties and sourcing rules.
• Chapter 4 (FATCA - Foreign Account Tax Compliance Act, Sections 1471–1474) applies to withholding on certain foreign financial institutions (FFIs) and non-financial foreign entities (NFFEs) that do not comply with FATCA requirements.