(Last updated: 28 Jan 2026)
Preparing a 1042-S isn’t an easy task, and to make matters worse, filing incorrectly can lead to penalties, fines and unnecessary stress.
But not to worry, today we will address some of the most common questions associated with filing a 1042-S: What is a 1042-S? How do I know what income to report? What deadlines should I be aware of when filing a 1042-S? Should I be aware of any recent changes to the document?
In this blog post, we’ll explain everything you need to know about the 1042-S!
Table of Contents Show
What is a 1042-S form used for?
Form 1042-S (Foreign Person’s U.S. Source Income Subject to Withholding) is used to report any payments made to foreign persons.
Forms 1042-S and 1042 (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons) are IRS tax forms that deal specifically with payments to nonresident aliens and other foreign persons.
What is the difference between Form 1042 and 1042-S?
The main difference between form 1042 and 1042-S is that form 1042-S is used to report payments made to foreign persons, while 1042 deals with determining how much tax will be withheld on certain income of nonresident aliens and other foreign persons.
Who must file 1042-S?
If you are a U.S. person, business, or institution that provides an income to non-citizen workers, you will need to file an information return, Form 1042-S, to report amounts paid to them.
The form is relevant to all payments made to non-resident aliens that are subject to tax withholding – so this includes foreign partnerships, foreign corporations, foreign estates, and foreign trusts. It’s also relevant for schools and universities in the U.S.
If your institution’s employees are non-U.S. citizens, it’s your responsibility to file on their behalf. This might be a cafeteria worker or a college tutor for example. A copy of the Form 1042-S must also be sent to the nonresident alien individual.
A separate Form 1042-S must be issued in the following cases:
- For each recipient, whether or not any tax was withheld.
- For each category of income paid to the same recipient.
- For each applicable tax rate, if more than one rate was applied to the same type of income paid to the same recipient.
A Form 1042 summarizes the information reported on a 1042-S, which you issue to your students and employees. It reports the liability of the withholding agent on the tax they have withheld or should have withheld.
You are informing the IRS of the total cumulative amount of payments which you have paid to a non-U.S. person during the tax year.
There are certain income codes for 1042-s forms that will also alleviate potential confusion on whether or not you need to file.
For example the following income codes are relevant to form 1042-s.
- 1042-S income code 01 – Interest paid by U.S. obligors—general.
- 1042-S income code 06 – Dividends paid by U.S. corporations—general
- 1042-S income code 16 – Scholarship or fellowship grants
- 1042-S income code 42 – Earnings as an artist or athlete – no central withholding agreement
- 1042-S income code 43 – Earnings as an artist or athlete – central withholding agreement
How do I determine if an income should be reported on a 1042-S?
Form 1042-S allows us to report any payments you pay to a foreign person.
However, it’s crucial for the payroll office to understand what kind of income should be reported on a 1042-S.
If you have any concerns about this, don’t worry! Sprintax Calculus is here to help you make sense of it all.
Schedule a Free Demo for Sprintax Calculus
What income should I report on a 1042-S?
For income to be reportable on a 1042-S, it must have been earned in the U.S. by a foreign person or qualify as income exempt under a tax treaty or other IRC provision applicable to non-U.S. persons’ income.
Do report:
- Payments such as interest and dividends
- Scholarships and grants (except payments for tuition made to a degree candidate)
- Rents, royalties, and licensing fees, provided they are from U.S. sources
Don’t report:
Payment for goods, inventory, equipment, raw materials, or similar items.
Income from these sources should not be reported when paid to a foreign person.
When is the deadline for filing Form 1042-S ?
Form 1042-S must be filed with the IRS by 15 March following the end of the tax year. If 15 March is a non-working day, the deadline is the first working day after 15 March.
Note: Since 15 March falls on a Sunday this year, the deadline is 16 March 2026.
You also must provide a copy of Form 1042-S to each payee by 15 March of the year following the payment year.
Can you get an extension for a 1042-S?
Filers may request an automatic 30-day extension by filing Form 8809 (Application for Extension of Time to File Information Returns) no later than 15 March of the next tax year. A second extension may be requested with Form 8809, but approval is not automatic.
It is possible to request a third or fourth extension but unfortunately, the chances of receiving a response or approval for more than two extensions are slim to none.
Furnishing a recipient (payee) copy
The due date is 15 March of the year after the tax year of payment. The filer must provide their students directly with a copy of the form.
The IRS implemented a new process for requesting an extension of time to furnish copies of Form 1042-S to recipients using Form 15397 – Application for Extension of Time to Furnish Recipient Statements.
Can Form 1042-S be filed electronically?
All financial institutions (including investment funds) must file Forms 1042-S electronically through the Filing Information Returns Electronically (FIRE) system, regardless of how many forms they file.
Other entities that file 10 or more forms must file electronically as well. The IRS will confirm within five business days that the transmission was successful.
For FIRE system information check IRS Publication 1187 for guidance.
Information Return Intake System (IRIS) is available for e-filing 1042-S forms since 1 January, 2026. During 2026 both FIRE and IRIS will accept 1042-S forms.
However, starting 1st of January 2027, FIRE system will be retired and the only system where 1042-S forms will be e-filed will be IRIS.
In terms to use IRIS you may need a software solution that is approved for e-filing 1042-S forms to IRS.
You can use Sprintax Calculus to automatically generate your 1042-S.
Filing with Calculus saves you the time and stress of managing all of your employees’ tax obligations individually.
To date, over 450 organizations in the U.S. have chosen us to help manage the taxation of their nonresident employees!
How to correctly file a 1042-S
There are certain mandatory fields that you must fill in, in order to correctly file a 1042-S but it’s also important to note that you must assign each form a unique 10-digit numeric identifier number for each 1042-S that you prepare.
If you pay different types of income to a single payee – say for example you’re paying them interest and dividends – you will need to fill out two separate 1042-S forms because you have two different income types. Even though it’s the same payee, you need two separate identifiers.
This unique identifier is required if you need to make an amendment to the Form 1042-S, otherwise it would be impossible for the IRS to distinguish between forms and understand which form you are amending.
What are the fines and penalties for incorrectly filing?
Unless you can prove that you did not file a 1042-S due to a reasonable cause, instead of willful neglect, you will likely be hit with fines and penalties.
Remember, if you need more time, you can apply for an extension of time to file the forms.
For 1042-S forms that are due in 2026, the penalty for failure to file by the deadline, or not filing the form at all, is a maximum of $340 per form.
This fine is increased to $680 (if greater, 10% of the full amount still required to be reported, with no maximum figure) if you intentionally do not report the correct information.
Which fields are mandatory for a 1042-S?
There are a number of fields that are mandatory on the form but which fields you fill in will often depend on the person whom you’re filing for and their own unique personal circumstances.
Our tax determination software performs these checks and the population of the forms.
Learn more about Sprintax Calculus.
What else should I know about the form?
Over the years, there have been some changes made to the 1042-S. Changes on the boxes include:
- Boxes 7b and 10 have been updated with clarifying language
- Boxes 9 and 11 have been switched and clarifying language has been updated
- Limitation on Benefits (LOB) Treaty Category code for individuals (code 01) has been removed
- Box 13j should be left blank for payments made to an individual who is claiming treaty benefits.
- Box 13i now has its own row (*note: Format is YYYY/MM/DD)
New items on 2025 1042-S form:
- New box 7d. A new checkbox has been added to indicate a Form 1042-S is being filed to revise an amount subject to withholding in a withholding rate pool to report to a specific recipient.
- New chapter 3 status code 40. A new chapter 3 status code was added for any partnership that is, or has a branch that is, a qualified derivatives dealer (QDD) for use when reporting allocations to its partners with respect to QDD items
- New Chapter 3 status code 41. A new chapter 3 status code was added for a U.S. government entity or tax-exempt entity (other than a section 501(c) entity) such as a college or university.
- New income codes 59, 60, and 61. New income codes were added for consent fees, loan syndication fees, and settlement payments. These income codes are optional for 2025.
- Country codes. “US” is now a valid country code entry in box 12f (withholding agent) or 13b (recipient).
Need help with preparation for filing 1042-S?
In order to transmit 1042-S informational text files electronically through the Filing Information Returns Electronically (FIRE) system, you must have suitable software, a service provider, or an in-house programmer that will create the file in the proper format per IRS requirements and record layouts found in publication 1187.
That’s where Sprintax can help you out!
Sprintax Calculus is a tax determination software solution that creates compliant tax documents for you.
You can use your own Transmitter Control Code (TCC) or you can choose Sprintax to be a transmitter for you.
Sprintax Calculus is here to assist you with the more complicated aspects of tax filing prep by simplifying nonresident taxes.
Sprintax Calculus means compliant, stress-free tax returns.
Connect with Sprintax today to schedule a free demo for your international office.
