2021.02 What’s new on 1042-S forms

There are no major changes for QI when filling in the 1042-s forms for 2020.

1042-s printable form

Three new features have been introduced in the paper format. The first is the possibility, for a partnership or a trust, to withhold and report in a subsequent year, designating a specific deposit of the withholding as attributable to the preceding year.

The second new feature concerns the updating of the Chapter 3 Status Code. Codes 01 (US Withholding Agent – FI), 02 (US Withholding Agent – Other) and 34 (US Withholding Agent – Foreign branch of FI) are no longer valid. Instead, codes 36 (Foreign Government – Integral Part) and 37 (Foreign Government – Controlled Entity) have been added. Finally, for code 19, the description has been updated from “Government or International Organization” to “International Organization.”

The third new feature is the possibility of inserting the “US” code in box 12f (Country Code) if the withholding agent is a U.S. person or a foreign branch of a U.S. person.

1042-S electronic file for FIRE platform

The three changes above are also incorporated into the electronic format of the form.

If the withholding agent is a partnership or a trust that is permitted to withhold in a subsequent year, it must enter the code “1” in the “W records”, at position 883.

Instead, the new Chapter 3 Status Code can be inserted in the “W records”, at position 533-534 (Withholding Agent’s Chapter 3 Status Code) and in the “Q records” at positions:

786-787 (Recipient’s Chapter 3 Status Code)
850-851 (Intermediary’s or FTE’s Chapter 3 Status Code)
984-985 (Payer’s Chapter 3 Status Code)

Finally, the US code can be inserted in the “W records”, at position 258-259.

You can download the latest IRS publications “Instructions for Form 1042-S” and “Publication 1187” from this page.