The Inside Income Service launched an internet device Monday to assist U.S. withholding brokers adjust to their reporting and withholding obligations for IRS Kind 1042-S (Overseas Particular person’s U.S. Supply Revenue Topic to Withholding).

The device does a high quality evaluate of knowledge earlier than it’s submitted to the IRS. The IRS famous, nonetheless, that use of the device doesn’t change a withholding agent’s obligations to file Kinds 1042-S with the IRS and furnish a duplicate of the Kind 1042-S to the payee.

Basically, withholding brokers, similar to banks, insurance coverage corporations, universities, leisure venues and resorts, or different monetary establishments are required to file an info return on Kind 1042-S to report quantities paid from U.S. sources to overseas individuals. The definition of a withholding agent consists of any particular person, U.S. or overseas, that has management, receipt or custody of quantities which can be topic to the foundations underneath Inside Income Code Chapter 3 (Withholding of Tax on Nonresident Aliens and Overseas Companies) or Chapter 4 (Taxes to Implement Reporting on Sure Overseas Accounts, i.e. FATCA or the Overseas Account Tax Compliance Act).

IRS headquarters in Washington, D.C.

Andrew Harrer/Bloomberg

“U.S. withholding brokers play an essential position in serving to the IRS administer the tax code so we’re delighted to have the ability to present this device freed from cost to help brokers in assembly their submitting requirement,” stated IRS Massive Enterprise and Worldwide division commissioner Nikole Flax in a press release.

The brand new device will settle for Kind 1042-S information in widespread file codecs that may be generated by most withholding brokers’ again workplace methods. After importing the information, the person will obtain a report indicating errors and potential errors. A tutorial on learn how to use the device is out there for viewing on-line or it may be downloaded.

Though the device identifies information errors, the IRS identified {that a} withholding agent remains to be chargeable for making adjustments to the information on the agent’s system of report earlier than submission to the IRS. The listing of assets beneath will assist brokers perceive and proper errors earlier than submitting Kinds 1042-S.

The device can be utilized as typically as crucial on new or revised information. The IRS stated it has no entry to the customers’ information. Use of the device is voluntary, however the IRS will take into consideration a withholding agent’s use of the device when making enforcement and penalty determinations.

The IRS is asking info reporting and withholding trade consultants and withholding brokers to share details about the brand new device with any withholding brokers who can profit from utilizing it.


  • Kind 1042-S, Directions in PDF or HTML and any latest updates;
  • Kind 1042, Directions in PDF or HTML and any latest updates;
  • Publication 1187 (.pdf),Specs for Digital Submitting of Kind 1042-S, Overseas Particular person’s U.S. Supply Revenue Topic to Withholding; and
  • Publication 515, Withholding of Tax on Nonresident Aliens and Overseas Entities.

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