Inst. Form 1042-S (2026) — Instructions for Form 1042-S (2026)

# Future Developments

For the latest information about developments related to Form 1042-S and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form1042S.

# What's New

Credit forward framework. After December 31, 2024, withholding agents (including a QSL) may no longer use the credit forward framework set forth in Notice 2010-46, 2010-24 I.R.B. 757, for substitute dividends paid in a series of security loans or stock repurchase agreements. See FAQ 26 under the General compliance section of FATCA - FAQs general, available at IRS.gov/FATCAFAQsGeneral. Address fields. We separated the address fields into individual entry boxes. Chapter 3 exemption codes. A chapter 3 exemption code is now required in all cases where the tax withheld is less than 30%. For example, if you are reporting payments of scholarship or fellowship grants that are subject to a 14% withholding tax under section 1441(a), you must report chapter 3 exemption code 02 (exempt or reduced withholding under IRC) in box 3a. See Boxes 3a and 4a for more information. Filing Information Returns Electronically (FIRE) system being retired. FIRE is set to retire for tax year 2026 and will not be available for submissions for filing season 2027 (forms due in 2027). The Information Returns Intake System (IRIS) will be the only intake system for information returns currently received through FIRE. For more information on e-filing or IRIS, go to IRS.gov/InfoReturns. Information Returns Intake System (IRIS). The IRS has developed IRIS, an online portal that allows taxpayers to e-file information returns and will replace FIRE for e-filing Forms 1042-S. IRIS will also let you file corrections and request automatic extensions. IRIS will be available beginning January 1, 2026, and must be used to e-file 2026 Forms 1042-S (due March 15, 2027). Either IRIS or FIRE may be used to e-file 2025 Forms 1042-S (due March 15, 2026). For more information, go to IRS.gov/IRIS.

# Reminders

Income codes 59, 60, and 61. The income codes for consent fees, loan syndication fees, and settlement payments will remain optional for 2026. Reliance on proposed regulations reducing burden under FATCA and chapter 3. On December 18, 2018, the IRS and the Department of the Treasury issued proposed regulations (REG-132881-17) to reduce taxpayer burden with respect to certain requirements under chapters 3 and 4. The proposed regulations provide that, under section 7805(b)(1)(C), taxpayers may generally rely on the proposed regulations until final regulations are issued. Specifically, for purposes of these instructions, a withholding agent may rely on the following provisions in connection with completing Form 1042-S. Withholding and reporting in a subsequent year. A partnership or trust that is permitted to withhold in a subsequent year with respect to a foreign partner's or beneficiary's share of income for the prior year may designate the deposit of the withholding as attributable to the preceding year and in some cases a partnership is provided an extended due date for filing and furnishing Form 1042-S. See the instructions for box 7c, later. Adjustments to overwithholding under the reimbursement and set-off procedures. A withholding agent may make adjustments to overwithholding using either the reimbursement or set-off procedures until the extended due date for filing Form 1042-S (unless the Form 1042-S has already been filed or furnished). Additionally, a withholding agent may use the extended due date for filing a Form 1042 to claim a credit for any adjustments made to overwithholding. See the instructions for box 9, later. Withholding rates. The rate of withholding under section 1446(a) by a publicly traded partnership (PTP) on a distribution of income effectively connected to a U.S. trade or business is 21% for corporate partners and 37% for all other partners. The rate of withholding by a qualified investment entity (QIE) on a distribution to a nonresident alien or foreign corporation that is treated as gain from the sale or exchange of a U.S. real property interest by the shareholder is 21%. Qualified derivatives dealers (QDDs). These instructions provide guidance on how to report payments on Form 1042-S that are made to and by QDDs. See Payments by U.S. Withholding Agents and Amounts Paid by QIs , later. For more information on the withholding and reporting requirements associated with payments made to and by QDDs, see Rev. Proc. 2022-43, 2022-52 I.R.B. 570, available at IRS.gov/irb/2022-52_IRB#RP-2022-43. See also Notice 2024-44, 2024-25 I.R.B. 1737, available at IRS.gov/irb/2024-25_IRB#NOT-2024-44, which extends the phase-in period provided in Notice 2022-37, 2022-37 I.R.B. 234, available at IRS.gov/irb/2022-37_IRB#NOT-2022-37, for certain provisions of the section 871(m) regulations for 2 years (including 2026), including for certain requirements of a QDD. Foreign Account Tax Compliance Act (FATCA). Form 1042-S reports payments and amounts withheld under the provisions commonly known as FATCA or chapter 4 of the Internal Revenue Code (chapter 4) in addition to those amounts required to be reported under chapter 3 of the Internal Revenue Code (chapter 3). Form 1042-S requires the reporting of an applicable exemption to the extent withholding under chapter 4 did not apply to a payment of U.S. source fixed or determinable annual or periodical (FDAP) income (including deposit interest) that is reportable on Form 1042-S. For payments to intermediaries, flow-through entities, and recipients, Form 1042-S requires that the chapter 3 status (or classification) and, when the payment reported is a withholdable payment, the chapter 4 status, be reported on the form according to the codes provided in these instructions. For the requirement of a withholding agent to file a Form 1042-S for chapter 4 purposes, see Regulations section 1.1474-1(d). Unique form identifier. Withholding agents must assign a unique identifying number to each Form 1042-S they file. This identifying number is used, for example, to identify which information return is being corrected or amended when multiple information returns are filed by a withholding agent with respect to the same recipient. The unique identifying number cannot be the recipient's U.S. taxpayer identification number (TIN) or foreign tax identification number (FTIN). The unique identifying number must be numeric. The length of a given identifying number must be exactly 10 digits. The identifying number must be unique to each original Form 1042‐S filed for the current year. The identifying number can be used on a new original form in a subsequent year. List of country codes. Form 1042-S filers must use the same list of country codes used on other IRS forms (for example, Forms 926, 1118, 3520, and 8805). This list of country codes may be found at IRS.gov/CountryCodes.

# Purpose of Form

Use Form 1042-S to report income described under Amounts Subject to Reporting on Form 1042-S , later, and to report amounts withheld under chapter 3 or chapter 4. Use Form 1042-S to report specified federal procurement payments paid to foreign persons that are subject to withholding under section 5000C. Use Form 1042-S to report payments of eligible deferred compensation items or distributions from nongrantor trusts to covered expatriates that are subject to withholding under section 877A. See Box 1 , later. Use Form 1042-S to report certain distributions that are made by publicly traded trusts and QIEs (as defined under section 897(h)(4)(A)). See Distributions Attributable to Dispositions of U.S. Real Property Interests by Publicly Traded Trusts and Qualified Investment Entities , later. Use Form 1042-S to report distributions of effectively connected income (ECI) by a PTP or nominee and amounts realized paid on certain transfers of PTP interests. See Publicly Traded Partnerships (Section 1446(a) and (f) Withholding Tax) , later. Caution: Every person required to deduct and withhold any tax under chapter 3 or chapter 4 is liable for such tax. Do not use Form 1042-S to report an item required to be reported on any of the following forms. Form W-2 (wages and other compensation made to employees (other than compensation for dependent personal services for which the beneficial owner is claiming treaty benefits), including wages in the form of group-term life insurance). Form 1099 (except if indicated otherwise in these instructions). Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons; or Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax. Withholding agents otherwise required to report a distribution partly on a Form 8288-A or Form 8805 and partly on a Form 1042-S may instead report the entire amount on Form 8288-A or Form 8805. Form 8966, FATCA Report. Foreign financial institutions (FFIs), sponsoring entities of certain FFIs and other foreign entities, and withholding agents are required to report on Form 8966 certain account holders and payees. An FFI or withholding agent may also be required to file Form 1042-S to report payments of U.S. source FDAP income made to such persons and to report tax deducted and withheld, if any.

# Who Must File

Every withholding agent (defined in Definitions , later) must file an information return on Form 1042-S to report amounts paid during the preceding calendar year that are described under Amounts Subject to Reporting on Form 1042-S , later. However, withholding agents who are individuals are not required to report a payment on Form 1042-S if they are not making the payment as part of their trade or business and no withholding is required to be made on the payment. For example, an individual making a payment of interest that qualifies for the portfolio interest exception from withholding is not required to report the payment if the portfolio interest is paid on a loan that is not connected to the individual's trade or business. However, an individual who is a withholding agent paying an amount that actually has been subject to withholding is required to report the payment. Also, an individual paying an amount on which withholding is required must report the payment, whether or not the individual actually withholds. See Multiple Withholding Agent Rule, later, for exceptions to reporting when another person has reported the same payment to the recipient. Note that there may be a payment for tax purposes, even if there is no net payment. For example, see Regulations section 1.871-15(i) for when there is a dividend equivalent. You must file a Form 1042-S even if you did not withhold tax under chapter 3 because the income was exempt from tax under a U.S. tax treaty or the Internal Revenue Code, including the exemption for income that is effectively connected with the conduct of a trade or business in the United States, or you released the tax withheld to the recipient. For exceptions, see Amounts That Are Not Subject to Reporting on Form 1042-S , later. Amounts paid to an individual that is a bona fide resident of a U.S. territory are not subject to reporting on Form 1042-S if the beneficial owner of the income is a U.S. citizen, national, or resident alien (such amounts may be subject to Form 1099 reporting). Caution: If you file Form 1042-S, you must also file Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. See Form 1042 and its instructions for more information.

# Where, When, and How To File

Forms 1042-S, whether filed on paper or electronically, must be filed with the IRS and be furnished to the recipient of the income by March 15 of the following calendar year. If the 15th falls on a Saturday, Sunday, or legal holiday in the District of Columbia or where the return is to be filed, the due date is the next business day. Copy A is filed with the IRS. Send all paper Forms 1042-S with Form 1042-T, Annual Summary and Transmittal of Forms 1042-S, to the address in the Form 1042-T instructions. You must use Form 1042-T to transmit paper Forms 1042-S. Use a separate Form 1042-T to transmit each type of Form 1042-S. See Payments by U.S. Withholding Agents, later, and the Form 1042-T instructions for more information. Electronic filing requirement. See Electronic Reporting , later, for information on who is required to file Form 1042-S electronically. Tip: Attach only Copy A to Form 1042-T. Provide Copies B, C, and D to the recipient of the income. All copies must match the copy filed with the IRS. Any differences between the copy of the form issued to recipients and the copy filed with the IRS will lead to delays in processing the recipient's tax return. The IRS may disallow claims for refund or credit for amounts withheld reported on Form 1042-S if the form attached to such claims differs from the copy that was filed with the IRS. With respect to a withholdable payment, the recipient copy should be provided to the intermediary or flow-through entity named as a recipient with respect to a chapter 4 reporting pool, if applicable. Extension of time to file. To request an extension of time to file Forms 1042-S, file Form 8809, Application for Extension of Time To File Information Returns. See the instructions for Form 8809 at IRS.gov/Form8809 for where to file that form. You should request an extension as soon as you are aware that an extension is necessary, but no later than the due date for filing Form 1042-S. By filing Form 8809, you will get an automatic 30-day extension to file Form 1042-S. If you need more time, you may submit a second Form 8809 before the end of the initial extended due date. See Form 8809 for more information.

# Recipient copies.

You may request a one-time 30-day extension to furnish copies of Forms 1042-S to the recipients using Form 15397, Application for Extension of Time to Furnish Recipient Statements. This form must be sent by fax to: Internal Revenue Service Technical Services Operation Attn: Extension of Time Coordinator Fax: 877-477-0572 (International fax: 304-579-4105) Your request must be received no later than the date the Forms 1042-S must be furnished to the recipients. If your request for an extension is approved, generally you will be granted a maximum of 30 extra days to furnish the recipient copies. See Extension to provide statements to recipients in Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

# Electronic Reporting

Forms 1042-S must be e-filed if: You are a person (including a corporation, partnership, individual, trust, or estate) that is required to file 10 or more information returns during the year; or You are a partnership with more than 100 partners; or You are a financial institution (whether U.S. or foreign) regardless of the number of returns required to be filed. Beginning January 1, 2026, you can use IRIS to e-file 2025 Forms 1042-S (due March 15, 2026). Prior year Forms 1042-S would still be required to be e-filed using FIRE until this system is retired, which is expected to happen on December 31, 2026. After December 31, 2026, IRIS will be required to e-file Forms 1042-S. For more information, go to IRS.gov/IRIS. A withholding agent required to e-file its original Form 1042-S returns under the above requirements must also e-file any amended Form 1042-S returns during the calendar year. Caution: If you e-file, do not file the same returns on paper. Duplicate filing may cause penalty notices to be generated. Note: Regardless of the above requirements, the IRS encourages filers to e-file. Hardship waiver. To receive a hardship waiver from e-filing Forms 1042-S, submit Form 8508, Application for a Waiver from Electronic Filing of Information Returns. Waiver requests should be filed at least 45 days before the due date of the returns. See Form 8508 for more information.

# Truncation of TIN Rules

Withholding agents may truncate the recipient's TIN (social security number (SSN), individual taxpayer identification number (ITIN), or employer identification number (EIN)) on the recipient's copy of Form 1042‐S (that is, Copies B, C, and D), including a substitute form. To truncate the recipient's TIN, only the last four digits of a TIN must be displayed and the remaining digits must be replaced with either asterisks (*) or Xs. For example, an SSN or ITIN must be truncated on the recipient's copy as XXX‐XX‐nnnn. An EIN must be truncated as XX‐XXXnnnn. Withholding agents may also truncate a recipient's FTIN on the recipient's copy of Form 1042‐S (Copies B, C, and D), including a substitute form. The same rules for truncating a recipient's U.S. TIN stated above must be followed if truncating a recipient's FTIN. Note: The recipient's TIN and FTIN must not be truncated on Copy A filed with the IRS. The withholding agent's EIN cannot be truncated on any copy. Need assistance? For additional information and instructions on e-filing Forms 1042-S, extensions of time to file (Form 8809), and hardship waivers (Form 8508), go to IRS.gov/IRIS. You can also call the IRIS help desk at 866-937-4130 (toll free) or 470-769-5100 (not a toll-free number). Do not call the IRIS help desk for tax law questions. If you have tax law questions pertaining to Form 1042-S, call 267-941-1000 (not a toll-free number).

# Additional Information

For more information on the withholding of tax, see Pub. 515. This publication can only be seen online at IRS.gov/Pub. 515. You can download or print some of the forms and publications you may need at IRS.gov/Forms. Otherwise, you can place an order online at IRS.gov/OrderForms or by calling 800-TAX-FORM (800-829-3676) to have forms and publications mailed to you. You should receive your order within 10 business days.

# Record Retention

Withholding agents should retain a copy of the information returns filed with the IRS, or have the ability to reconstruct the data, for at least 3 years after the reporting due date.

# Substitute Forms

The official Form 1042-S is the standard for substitute forms. All substitute forms must comply with the rules set forth in Pub. 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns. A substitute of Form 1042-S that is furnished to the recipient (Copy B, C, or D) must conform in format and size to the official IRS form and must contain the exact same information as the copy filed with the IRS. However, the size of the form may be adjusted if the substitute form is presented on a landscape-oriented page instead of portrait. Only one Form 1042-S may be submitted per page, regardless of orientation. You may be subject to a penalty for failure to furnish a correct information return. See Penalties , later. Note: A withholding agent is required to provide a recipient with a separate substitute Form 1042-S for each type of payment of income (as determined by the income code in box 1). Caution: All of the fields on the substitute form must match the copy filed with the IRS and must comply with IRS standards (see Pub. 1179). Any differences between the substitute form issued to recipients and the copy filed with the IRS will lead to delays in processing the recipient's tax return. The IRS may disallow claims for refund or credit for amounts withheld reported on Form 1042-S if the substitute form attached to such claims differs from the copy that was filed with the IRS.

# Penalty for filing incorrect substitute form.

Privately printed substitute Forms 1042-S must be exact copies of both the format and content of the official Form 1042-S. If you file a substitute for Form 1042-S, Copy A, with the IRS that is not an exact copy of the official Form 1042-S, Copy A, you may be subject to a penalty for failure to file a correct information return. See Penalties , later.

# Account-by-Account Reporting by Certain Financial Institutions

A U.S. financial institution or U.S. branch of an FFI maintaining an account within the United States is required to report payments of the same type of income (as determined by the income code in box 1) made to multiple financial accounts held by the same recipient on a separate Form 1042-S for each account. For this purpose, a financial account is an account described in Regulations section 1.1471-5(b)(1). See Box 13o, later, for information on designating each account with a separate account number.

# Combined Reporting Procedures

Rev. Proc. 99-50 provides special procedures for successor entities to use combined information reporting under chapter 3 in certain situations following a merger or acquisition. A withholding agent may also use these procedures for purposes of reporting under chapter 4.

# Deposit Requirements

For information and rules concerning federal tax deposits, see Depositing Withheld Taxes in Pub. 515 or Deposit Requirements in the Instructions for Form 1042.

# Definitions

Withholding agent. A withholding agent is any person, U.S. or foreign, that has control, receipt, or custody of an amount subject to withholding under chapter 3 who can disburse or make payments of an amount subject to withholding, or who makes a withholdable payment under chapter 4. The withholding agent may be an individual, a corporation, a partnership, a trust, an association, or any other entity. The term "withholding agent" also includes, but is not limited to, a qualified intermediary (QI), a nonqualified intermediary (NQI), a withholding foreign partnership (WP), a withholding foreign trust (WT), a flow-through entity, a U.S. branch that is treated as a U.S. person under Regulations section 1.1441-1(b)(2)(iv)(A), a territory FI, a nominee under section 1446, and an authorized agent. A person may be a withholding agent even if there is no requirement to withhold from a payment or if another person has already withheld the required amount from a payment. In most cases, the U.S. person who pays (or causes to be paid) the item of U.S. source income to a foreign person (or to its agent) must withhold. However, other persons may be required to withhold. For example, if a payment is made by a QI (whether or not it assumes primary withholding responsibility) and the QI knows that withholding was not done by the person from which it received the payment, then that QI is required to do the appropriate withholding. In addition, withholding must be done by any QI that assumes primary withholding responsibility under chapters 3 and 4, a WP, a WT, a U.S. branch that agrees to be treated as a U.S. person under Regulations section 1.1441-1(b)(2)(iv)(A), or an authorized agent. Finally, if a payment is made by an NQI or a flow-through entity that knows, or has reason to know, that withholding was not done, that NQI or flow-through entity is required to withhold because it also falls within the definition of a withholding agent. Account holder. Generally, the account holder is the person that holds the account. See Regulations section 1.1471-5(a). Amount realized. An amount realized on the transfer of a PTP interest is the amount of gross proceeds (as defined in Regulations section 1.6045-1(d)(5)) paid or credited to a partner or broker (as applicable) that is a transferor of the interest. The amount realized on a PTP distribution is the amount of the distribution reduced by the portion of the distribution that is attributable to the cumulative net income of the partnership (as determined under Regulations section 1.1446(f)-4(c)(2)(iii)). Amount subject to chapter 3 withholding. Generally, an amount subject to chapter 3 withholding is an amount from sources within the United States that is FDAP income. FDAP income is all income included in gross income, including interest (as well as original issue discount (OID)), dividends, rents, royalties, and compensation. Amounts subject to chapter 3 withholding do not include amounts that are not FDAP, such as most gains from the sale of property (including market discount and option premiums), as well as other specific items of income (such as interest on bank deposits and short-term OID). See Regulations section 1.1441-2. Authorized agent. An agent is an authorized agent for purposes of filing Form 1042 or making tax deposits and payments on behalf of its principal (payer) only if all five of the following conditions apply. There is a written agreement between the payer and the person acting as agent. A Form 8655, Reporting Agent Authorization, is filed with the IRS if the agent is filing Form 1042 (in its own name) on behalf of the payer. The books and records and relevant personnel of the agent are available to the payer. The payer remains fully liable for the acts of its agent and does not assert any of the defenses that may otherwise be available. If the agent is filing Form 1042 (in its own name) on behalf of the payer, the agent is reported as the withholding agent in boxes 12a through 12m and information about the payer is reported in boxes 16a through 16e of the Form 1042-S. A sponsoring entity is a reporting agent with respect to withholdable payments and must fulfill the above conditions to be an authorized agent. For more information on these conditions, see Regulations sections 1.1441-7(c) and 1.1474-1(a)(3)(ii). Beneficial owner. For payments other than those for which a reduced rate of withholding is claimed under an income tax treaty, the beneficial owner of income in most cases is the person who is required under U.S. tax principles to include the income in gross income on a tax return. A person is not a beneficial owner of income, however, to the extent that person is receiving the income as a nominee, agent, or custodian, or to the extent the person is a conduit whose participation in a transaction is disregarded. In the case of amounts paid that do not constitute income, beneficial ownership is determined as if the payment were income. Foreign partnerships, foreign simple trusts, and foreign grantor trusts are not the beneficial owners of income paid to the partnership or trust for chapter 3 purposes. The beneficial owners of income paid to a foreign partnership in most cases are the partners in the partnership, provided that the partner is not itself a partnership, foreign simple or grantor trust, nominee, or other agent. The beneficial owner of income paid to a foreign simple trust (a foreign trust that is described in section 651(a)) in most cases is the beneficiary of the trust, if the beneficiary is not a foreign partnership, foreign simple or grantor trust, nominee, or other agent. The beneficial owner of a foreign grantor trust (a foreign trust to the extent that all or a part of the income of the trust is treated as owned by the grantor or another person under sections 671 through 679) is the person treated as the owner of the trust. The beneficial owner of income paid to a foreign complex trust (a foreign trust that is not a foreign simple trust or foreign grantor trust) is the trust itself. The beneficial owner of income paid to a foreign estate is the estate itself. A payment to a U.S. partnership, trust, or estate is not subject to withholding under chapter 3 or 4. A U.S. partnership, trust, or estate should provide the withholding agent with a Form W-9, Request for Taxpayer Identification Number and Certification. In most cases, these beneficial owner rules apply for purposes of section 1446; however, there are exceptions. Chapter 3 withholding rate pool. A payment of a single type of income, determined in accordance with the income codes used to file Form 1042-S, that is subject to a single rate of withholding and a single chapter 4 exemption code. Chapter 4 withholding rate pool. A pool of account holders or payees provided on an FFI withholding statement (or a chapter 4 withholding statement) that is described in Regulations section 1.1471-1(b)(20). Broker. A broker is a person described in Regulations section 1.1446(f)-1(b)(1) when referenced in connection with a transfer of a PTP interest. Chapter 3. Chapter 3 (Withholding of Tax on Nonresident Aliens and Foreign Corporations), excluding sections 1445 and 1446. Disregarded entity. A business entity that has a single owner and is not a corporation under Regulations section 301.7701-2(b) is disregarded as an entity separate from its owner. Disclosing QI. For purposes of section 1446(a) or (f), a QI that provides with its withholding statement the specific payee documentation referenced in Regulations section 1.1446(f)-4(a)(7)(iii) (for an amount realized) or Regulations section 1.1446-4(e)(4) (for withholding on a PTP distribution under section 1446(a)) instead of the chapter 3 withholding rate pool information otherwise permitted to be included on the withholding statement. A QI that acts as a disclosing QI for a payment must act as a disclosing QI for the entire payment. See the 2023 QI agreement in Rev. Proc. 2022-43 for further information. Dividend equivalent. To the extent specified in section 871(m) and the regulations thereunder, a dividend equivalent is a payment (within the meaning of Regulations section 1.871-15(i)) that, directly or indirectly, is contingent on, or determined by reference to, the payment of a dividend from U.S. sources, including pursuant to a securities lending, sale-repurchase transaction, a specified notional principal contract, or a specified equity-linked instrument. Certain other payments made by the withholding agent to satisfy a tax liability with respect to a dividend equivalent by the party receiving the dividend equivalent are dividend equivalents. See Regulations section 1.871-15(c) for additional information, including the definitions of specified notional principal contract and specified equity-linked instrument. Any section 871(m) amount of a QDD is treated as a dividend equivalent. See Rev. Proc. 2022-43 for additional information, including the definition of a section 871(m) amount. Exempt beneficial owner. An exempt beneficial owner means a person that is described in Regulations section 1.1471-6 and includes a foreign government, a political subdivision of a foreign government, a wholly owned instrumentality or agency of a foreign government or governments, an international organization, a wholly owned agency or instrumentality of an international organization, a foreign central bank of issue, a government of a U.S. territory, certain retirement funds, and certain entities wholly owned by one or more exempt beneficial owners. In addition, an exempt beneficial owner includes any person treated as an exempt beneficial owner under an applicable Model 1 IGA or Model 2 IGA. Expatriate. A person is considered an expatriate if they relinquish U.S. citizenship or, in the case of a long-term resident of the United States, cease to be a lawful permanent resident as defined in section 7701(b)(6). Fiscally transparent entity. An entity is treated as fiscally transparent with respect to an item of income for which treaty benefits are claimed to the extent that the interest holders in the entity must, on a current basis, take into account separately their shares of an item of income paid to the entity, whether or not distributed, and must determine the character of the items of income as if they were realized directly from the sources from which realized by the entity. For example, partnerships, common trust funds, and simple trusts or grantor trusts in most cases are considered to be fiscally transparent with respect to items of income received by them. Flow-through entity. For chapter 3 purposes, a flow-through entity is a foreign partnership (other than a WP), a foreign simple or grantor trust (other than a WT), or, for any payments for which a reduced rate of withholding under an income tax treaty is claimed, any entity to the extent the entity is considered to be fiscally transparent under section 894 with respect to the payment by an interest holder's jurisdiction. Financial institution. A financial institution generally means an entity that is a depository institution, a custodial institution, an investment entity, or an insurance company (or holding company of an insurance company) that issues cash value insurance or annuity contracts. See Regulations section 1.1471-5(e). Foreign financial institution (FFI). An FFI is an entity described in Regulations section 1.1471-5(d) or an entity treated as a financial institution under an Intergovernmental Agreement (IGA). Foreign person. A foreign person includes a nonresident alien individual, a foreign corporation, a foreign partnership, a foreign trust, a foreign estate, and any other person that is not a U.S. person. The term also includes a foreign branch or office of a U.S. financial institution or U.S. clearing organization if the foreign branch is a QI. A payment to a U.S. branch of a foreign person is treated as a payment to a foreign person for purposes of Form 1042-S. Global intermediary identification number (GIIN). The GIIN is the identification number that is assigned to a participating FFI (including a reporting Model 2 FFI), a registered deemed-compliant FFI (including a reporting Model 1 FFI), or another entity for chapter 4 reporting purposes. Intermediary. An intermediary is a person that acts as a custodian, broker, or nominee, or otherwise as an agent for another person, regardless of whether that other person is the beneficial owner of the amount paid, a flow-through entity, or another intermediary. Nonfinancial foreign entity (NFFE). An NFFE is a foreign entity or an entity incorporated or organized under the laws of any U.S. territory that is not a financial institution. Nominee. See Regulations section 1.1446-4(b)(3) and Publicly Traded Partnerships (Sections 1446(a) and (f) Withholding Tax), later, for persons that may act as a nominee for a PTP distribution. Nonexempt recipient. A nonexempt recipient is any person who is not an exempt recipient under chapter 61. Payee. Except as otherwise provided, the payee is the person to whom a payment is made, regardless of whether such person is the beneficial owner of the amount or treated as the recipient of the payment for purposes of reporting on Form 1042-S. See Regulations section 1.1471-3(a). Presumption rules. For withholdable payments and for amounts subject to withholding under chapter 3, the presumption rules are those rules that a withholding agent must follow to determine the status of a beneficial owner or payee (for example, as a U.S. person or a foreign person) when it cannot reliably associate a payment with valid documentation. See, for example, Regulations sections 1.1441-1(b)(3), 1.1441-4(a), 1.1441-5(d) and (e), 1.1441-9(b)(3), 1.1446-1(c)(3), and 1.6049-5(d). Also see Pub. 515. See Regulations section 1.1446(f)-4(a)(2) and (b)(2) for a broker's requirement to treat a transferor of a PTP interest (or broker acting for the transferor) as a foreign person for section 1446(f) purposes absent the broker's receipt of a certification of non-foreign status. For a withholdable payment (defined in Regulations section 1.1473-1(a)), the withholding agent must also follow the presumption rules under Regulations sections 1.1471-3(f) and, for an FFI, 1.1471-4(c)(4)(i) to determine the chapter 4 status of the payee when it cannot reliably associate a payment with valid documentation. Publicly traded partnership (PTP). A PTP is an entity that has the same meaning as in section7704 and Regulations sections 1.7704-1 through 1.7704-4 but does not include a PTP treated as a corporation under that section. PTP distribution. A PTP distribution is a distribution made by a PTP. PTP interest. A PTP interest is an interest in a PTP if the interest is publicly traded on an established securities market or is readily tradable on a secondary market (or the substantial equivalent thereof). Qualified derivatives dealer (QDD). A QDD is a QI that is an eligible entity that agrees to meet the requirements of Regulations section 1.1441-1(e)(6)(i) and the QI agreement. An eligible entity is defined in Regulations section 1.1441-1(e)(6)(ii). To act as a QDD, the home office or branch, as applicable, must qualify and be approved for QDD status and must represent itself as a QDD on its Form W-8IMY and separately identify the home office or branch as the recipient on a withholding statement (if required). Each home office or branch that obtains QDD status is treated as a separate QDD. See Regulations section 1.1441-1(e)(6) and Rev. Proc. 2022-43 for more information. Qualified securities lender (QSL). A QSL is an FFI that satisfies all of the following. It is a bank, custodian, broker-dealer, or clearing organization that is regulated by the government in its home jurisdiction and that regularly borrows and lends the securities of U.S. corporations to unrelated customers. It is subject to audit by the IRS under section 7602 or by an external auditor if it is a QI. It provides to the withholding agent an annual certification of its QSL status. It meets the requirements to qualify as a QSL provided in Notice 2010-46 for the transition period. See Notice 2010-46 at IRS.gov/irb/2010-24_IRB#NOT-2010-46. While Notice 2010-46 was obsoleted, Notice 2024-44 permits withholding agents to apply the QSL transition rules described in Parts III, C-E of Notice 2010-46, for payments made in 2025 and 2026 that, however, do not include the credit forward provisions of the notice. See the instructions for box 8, later. Recalcitrant account holder. Generally, a recalcitrant account holder is an account holder of a participating or registered deemed-compliant FFI that failed to provide the documentation required under chapter 4 to determine the account holder's status or to report the account as a U.S. account. See Regulations section 1.1471-5(g). Specified notional principal contract (SNPC). An SNPC is any specified notional principal contract within the meaning of Regulations section 1.871-15(d). Specified U.S. person. A specified U.S. person is any U.S. person other than a person identified in Regulations section 1.1473-1(c). Substantial U.S. owner. A substantial U.S. owner is a specified U.S. person described in Regulations section 1.1473-1(b). For purposes of filing this form, a reporting Model 2 FFI reporting an account held by a passive NFFE should substitute the term "controlling person that is a specified U.S. person" for "substantial U.S. owner" and refer to the applicable Model 2 IGA for the definition of controlling person. A territory NFFE that is not an excepted NFFE determines its substantial U.S. owners by applying the 10% threshold in Regulations section 1.1473-1(b)(1). Territory FI. A territory FI is a financial institution that is incorporated or organized under the laws of any U.S. territory and is not an investment entity. See Regulations section 1.1471-5(e)(1)(iii) for the definition of investment entity. Withholdable payment. A withholdable payment is generally any payment of U.S. source FDAP income, subject to certain exceptions. For exceptions and additional information, see Pub. 515 and Regulations section 1.1473-1(a). Withholding foreign partnership (WP) or withholding foreign trust (WT). A WP or WT is a foreign partnership or trust that has entered into a withholding agreement with the IRS in which it agrees to assume primary withholding responsibility for all payments that are made to it for its partners, beneficiaries, or owners under chapter 3 (except for sections 1445 and 1446(a) or (f)) and under chapter 4. For information on these withholding agreements, see Rev. Proc. 2017-21, available at IRS.gov/irb/2017-06_IRB#RP-2017-21, and Regulations section 1.1441-5.

# Caution:

Exempt recipient. An exempt recipient is any payee that is exempt from the Form 1099 reporting requirements. Caution: Exempt recipients are not exempt from withholding under chapter 3 unless they are U.S. persons or foreign persons entitled to an exemption from withholding under chapter 3.

# Deemed-compliant FFI.

Under section 1471(b)(2), certain FFIs are deemed to comply with the regulations under chapter 4 without the need to enter into an FFI agreement with the IRS. However, certain deemed-compliant FFIs are required to register with the IRS and obtain a global intermediary identification number (GIIN). These FFIs are referred to as "registered deemed-compliant FFIs." See Regulations section 1.1471-5(f)(1). Registered deemed-compliant FFIs also include certain FFIs that satisfy the requirements of an applicable IGA.

# Nonparticipating FFI.

A nonparticipating FFI is an FFI that is not a participating FFI, deemed-compliant FFI, or exempt beneficial owner.

# Participating FFI.

A participating FFI is an FFI that has agreed to comply with the terms of an FFI agreement with respect to all branches of the FFI, other than a branch that is a reporting Model 1 FFI or a U.S. branch. The term "participating FFI" also includes a reporting Model 2 FFI and a QI branch of a U.S. financial institution, unless such branch is a reporting Model 1 FFI.

# Qualified intermediary (QI).

A QI is an intermediary or eligible entity that is a party to a withholding agreement with the IRS. A QI that is a financial institution must have a chapter 4 status described in Regulations section 1.1441-1(e)(5)(ii). An entity must indicate its status as a QI on a Form W-8IMY submitted to a withholding agent. A branch of a financial institution may not act as a QI in a country that does not have approved know-your-customer (KYC) rules. Countries having approved KYC rules are listed at IRS.gov/Businesses/International-Businesses/List-of-Approved-KYC-Rules. Branches that operate in non-KYC approved jurisdictions as intermediaries are required to act as NQIs. See the Instructions for Form W-8IMY for more information.

# Nonqualified intermediary (NQI).

An NQI is any intermediary that is not a U.S. person and that is not a QI.

# Private arrangement intermediary (PAI).

A QI that is an FFI may enter into a contractual agreement with another intermediary under which the other intermediary generally agrees to perform all of the obligations of the QI with respect to the accounts maintained directly by the other intermediary. See the QI agreement for the requirements of a PAI and a QI's agreement with a PAI.

# Excepted NFFE.

The term "excepted NFFE" means an NFFE that is described in Regulations section 1.1472-1(c)(1) and generally includes a publicly traded corporation, certain affiliated entities related to a publicly traded corporation, certain territory entities, active NFFEs, and entities excluded from the definition of FFI (excluded FFIs) described in Regulations section 1.1471-5(e)(5).

# Caution:

Nonresident alien individual. Any individual who is not a citizen or resident of the United States is a nonresident alien individual. An alien individual meeting either the green card test or the substantial presence test for the calendar year is a resident alien. Any person not meeting either test is a nonresident alien individual. Additionally, an alien individual who is treated as a nonresident alien pursuant to Regulations section 301.7701(b)-(7) for purposes of figuring out the individual's U.S. tax liability, or an alien individual who is a bona fide resident of Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, or American Samoa is a nonresident alien individual. An individual will not be treated as a U.S. person for a tax year or any portion of a tax year that the individual is a dual-resident taxpayer who is treated as a nonresident alien for purposes of figuring their U.S. tax liability. See Pub. 519, U.S. Tax Guide for Aliens, for more information on resident and nonresident alien status. Caution: Even though a nonresident alien individual married to a U.S. citizen or resident alien may choose to be treated as a resident alien for certain purposes (for example, filing a joint income tax return), such individual is still treated as a nonresident alien for withholding tax purposes.

# Caution:

Recipient. For chapter 3 purposes (including sections 1445 and 1446), a recipient includes any of the following. A beneficial owner of income. A QI other than a disclosing QI. A WP or WT. A U.S. branch that is treated as a U.S. person under Regulations section 1.1441-1(b)(2)(iv)(A) or for section 1446 purposes. A foreign partnership or a foreign trust (other than a WP or WT), but only to the extent the income is effectively connected with its conduct of a trade or business in the United States (except as indicated below for a grantor trust). A payee who is not known to be the beneficial owner, but who is presumed to be a foreign person under the presumption rules. A PAI. A partner receiving a distribution of ECI from a PTP or nominee. A QSL. For chapter 3 purposes (including sections 1445 and 1446), a recipient does not include any of the following. An NQI or disclosing QI. A nonwithholding foreign partnership (NWP) if the income is not effectively connected with its conduct of a trade or business in the United States. A disregarded entity other than a hybrid entity claiming treaty benefits. A foreign trust that is described in section 651(a) (a foreign simple trust) if the income is not effectively connected with the conduct of a trade or business in the United States. A foreign trust to the extent that all or a part of the trust is treated as owned by the grantor or other person under sections 671 through 679 (a foreign grantor trust). A U.S. branch that is not treated as a U.S. person unless the income is, or is treated as, effectively connected with the conduct of a trade or business in the United States. For chapter 4 purposes, a recipient also includes any of the following. A recalcitrant account holder not included in a chapter 4 reporting pool. A QI (other than a disclosing QI). A WP or WT. A PAI. A participating FFI or a registered deemed-compliant FFI that is an NQI, an NWP, or a nonwithholding foreign trust (NWT) and provides chapter 4 withholding rate pool information to the extent permissible. A participating FFI or deemed-compliant FFI that is the beneficial owner, including a nonreporting FFI under a Model 1 or Model 2 IGA. A U.S. branch or territory FI treated as a U.S. person under Regulations section 1.1441-1(b)(2)(iv)(A). An NFFE that is not a flow-through entity or acting as an intermediary. A foreign partnership or a foreign trust (other than a WP or WT), but only to the extent the income is effectively connected with its conduct of a trade or business in the United States. A partner or beneficiary of a flow-through entity that is an NFFE (other than a WP or WT). A nonparticipating FFI that is a beneficial owner. An exempt beneficial owner that is not a flow-through entity or acting as an intermediary. Caution: In the case of a PTP distribution subject to withholding under section 1446(a), if another partnership or a trust (other than a grantor trust) receives the distribution, the partnership or trust is the recipient for chapter 3 purposes. For chapter 4 purposes, a recipient is generally the same person that is a recipient for chapter 3 purposes.

# Caution:

U.S. branch treated as a U.S. person. A U.S. branch may agree to be treated as a U.S. person if it meets the requirements described in the regulations under chapter 3. See Regulations section 1.1441-1(b)(2)(iv)(A). A U.S. branch may also agree to be treated as a U.S. person for purposes of a sale subject to section 1446(f) or for a PTP distribution. Additionally, a territory FI may agree to be treated as a U.S. person for any of these purposes. The U.S. branch or territory FI must provide a Form W-8IMY showing that it is agreeing to be treated as a U.S. person. Caution: A U.S. branch that is treated as a U.S. person is treated as such solely for purposes of determining whether a payment is subject to withholding by the branch. The branch is, for purposes of information reporting, a foreign person, and payments to such a branch must be reported on Form 1042-S.

# Note:

Withholding certificate. The term "withholding certificate" refers to Form W-8 or Form W-9 in most cases. Note: Throughout these instructions, a reference to or mention of "Form W-8" is a reference to Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and/or W-8IMY.

# Nonwithholding foreign partnership (NWP) or nonwithholding foreign trust (NWT).

An NWP or NWT is any partnership or trust (other than a complex trust) that is not a U.S. person and that is not a WP or WT.

# Amounts Subject to Reporting on Form 1042-S

Amounts subject to reporting on Form 1042-S are amounts from U.S. sources paid to foreign persons (including persons presumed to be foreign) or included in a U.S. payee pool that are reportable under chapters 3 and 4, even if no amount is deducted and withheld from the payment because of a treaty or Internal Revenue Code exception to taxation or if any amount withheld was repaid to the payee. Amounts subject to reporting are amounts from sources within the United States that constitute (a) FDAP income (including deposit interest); (b) certain gains from the disposal of timber, coal, or domestic iron ore with a retained economic interest; and (c) gains relating to contingent payments received from the sale or exchange of patents, copyrights, and similar intangible property. A payment is also subject to reporting if withholding under chapter 4 is applied (or required to be applied) to the payment. Amounts subject to reporting on Form 1042-S include, but are not limited to, the following amounts to the extent they are from U.S. sources. Interest on deposits paid to certain nonresident aliens. Withholding agents must report certain interest described in section 871(i)(2)(A) aggregating $10 or more paid with respect to a deposit maintained at an office within the United States if such interest is paid to a nonresident alien individual who is a resident of a country identified in Rev. Proc. 2024-42, 2024-52 I.R.B. 1433, available at IRS.gov/irb/2024-52_IRB#REV-PROC-2024-42 (or any superseding revenue procedure that is effective as of January 1, 2026). A payer may elect to report interest described above paid to any nonresident alien individual by reporting all such interest. When completing Form 1042-S, use income code 29 in box 1 and exemption code 02 in box 3a for chapter 3 purposes, and the applicable chapter 4 exemption code in box 4a (see the instructions for boxes 3a and 4a, later). Interest on deposits subject to chapter 4 withholding. Interest on deposits from U.S. sources are withholdable payments and, therefore, may be subject to withholding under chapter 4. If payers withhold tax, they must report the interest and tax on Form 1042-S. Corporate distributions. The entire amount of a corporate distribution (whether actual or deemed) must be reported, regardless of any estimate of the part of the distribution that represents a taxable dividend. Any distribution, however, that is treated as gain from the redemption of stock is not an amount subject to withholding. For information on distributions from the disposition of a U.S. real property interest paid by a publicly traded trust or a QIE, see Distributions Attributable to Dispositions of U.S. Real Property Interests by Publicly Traded Trusts and Qualified Investment Entities, later. Interest. Interest subject to reporting includes the part of a notional principal contract payment that is characterized as interest. Rents. Royalties. Compensation for independent personal services performed in the United States. Compensation for dependent personal services performed in the United States (but only if the beneficial owner is claiming treaty benefits). Annuities. Pension distributions and other deferred income. Most gambling winnings. Proceeds from a wager placed in blackjack, baccarat, craps, roulette, or big-6 wheel are not amounts subject to reporting. Cancellation of indebtedness. Agents must report income from the cancellation of indebtedness unless the withholding agent is unrelated to the debtor and does not have knowledge of the facts that give rise to the payment. Effectively connected income (ECI). ECI includes amounts that are (or are presumed to be) effectively connected with the conduct of a trade or business in the United States even if no withholding certificate is required. Note that bank deposit interest is subject to Form 1042-S reporting if it is ECI or otherwise reportable on Form 1042-S (see Interest on deposits paid to certain nonresident aliens in this bullet list, earlier). ECI of a PTP distributed to a foreign partner or an amount realized subject to reporting under Regulations section 1.1461-1(c)(2)(i)(Q) must be reported on Form 1042-S. Notional principal contract income. Income from notional principal contracts that the payer knows, or must presume, is effectively connected with the conduct of a U.S. trade or business is subject to reporting using income code 32. The amount to be reported is the amount of cash paid on the contract during the calendar year. Any amount of interest determined under the provisions of Regulations section 1.446-3(g)(4) (dealing with interest in the case of a significant nonperiodic payment) is reportable as interest and not as notional principal contract income. See, however, the separate reporting for dividend equivalents, later. Insurance premiums. Insurance premiums from U.S. sources that have cash value (as defined in Regulations section 1.1471-5(b)(3)(vii)(B)) are withholdable payments under chapter 4, regardless of whether the premium payments are subject to the section 4371 excise tax. Withholding agents may treat premiums for insurance contracts that do not have cash value as excluded nonfinancial payments under chapter 4 and, therefore, not as withholdable payments under regulations proposed in REG-132881-17. If the payment is actually withheld upon or should have been withheld upon (but the withholding agent failed to withhold), such amount must be reported on Form 1042-S. Insurance premiums from U.S. sources are amounts subject to chapter 3 withholding that must be reported on Form 1042-S (excluding amounts subject to the section 4371 excise tax that must be reported on Form 1042-S). Real estate mortgage investment conduit (REMIC) excess inclusions. Excess inclusions from REMICs (income code 02) and withheld tax must be reported on Form 1042-S. A domestic partnership must separately state a partner's allocable share of REMIC taxable income or net loss and the excess inclusion amount on Schedule K-1 (Form 1065). If the partnership allocates all or some part of its allocable share of REMIC taxable income to a foreign partner, the partner must include the partner's allocated amount in income as if that amount was received on the earliest to occur of (1) the date of distribution by the partnership, (2) the date the foreign partner disposes of its indirect interest in the REMIC residual interest, or (3) the last day of the partnership's tax year. The partnership must withhold tax on the part of the REMIC amount that is an excess inclusion. An excess inclusion allocated to the following foreign persons must be included in that person's income at the same time as other income from the entity is included in income. Shareholder of a real estate investment trust (REIT). Shareholder of a regulated investment company (RIC). Participant in a common trust fund. Patron of a subchapter T cooperative organization. Note: In the case of a dividend equivalent, because the dividend equivalent is determined on a gross basis, there may be a payment for reporting purposes even when there is no transfer of funds. See Regulations section 1.871-15(i). Students, teachers, and researchers. Amounts paid to foreign students, trainees, teachers, or researchers as scholarship or fellowship income, and compensation for personal services (whether or not exempt from tax under an income tax treaty) must be reported. However, amounts that are exempt from tax under section 117 are not subject to reporting. Amounts paid to foreign governments, foreign central banks of issue, and international organizations. These amounts are subject to reporting even if they are exempt from chapter 3 withholding under section 892 or 895. Foreign targeted registered obligations. Interest paid on registered obligations targeted to foreign markets paid by a U.S. person to a foreign person other than a financial institution or a member of a clearing organization is an amount subject to reporting. OID from the redemption of an OID obligation. The amount subject to reporting is the amount of OID actually includible in the gross income of the foreign beneficial owner of the income, if known. Otherwise, the withholding agent should report the entire amount of OID as if the recipient held the instrument from the date of original issuance. See Pub. 1212, Guide to Original Issue Discount (OID) Instruments. Certain distributions attributable to dispositions of U.S. real property interests. See Distributions Attributable to Dispositions of U.S. Real Property Interests by Publicly Traded Trusts and Qualified Investment Entities , later. Dividend equivalents. Dividend equivalents have been divided into the following three income code reporting categories. Substitute dividends that are dividend equivalents (income code 34 or 53). Dividend equivalents with respect to transactions that are section 871(m) transactions as a result of combining transactions under Regulations section 1.871-15(n) (income code 56). All other dividend equivalents (income code 40). Guarantee of indebtedness. This includes amounts paid, directly or indirectly, for the provision of a guarantee of indebtedness issued after September 27, 2010. They must be paid by a noncorporate resident or U.S. corporation or by any foreign person if the amounts are effectively connected with the conduct of a U.S. trade or business. Report these amounts using income code 41. Specified federal procurement payments. Report specified federal procurement payments subject to withholding under section 5000C. PTPs. Certain payments of ECI attributable to PTP interests (described earlier) are subject to reporting on Form 1042-S. See Publicly Traded Partnerships (Sections 1446(a) and (f) Withholding Tax), later, for additional information.

# Amounts That Are Not Subject to Reporting on Form 1042-S

Interest and OID from short-term obligations. Interest and OID from any obligation payable 183 days or less from the date of original issue are generally not required to be reported on Form 1042-S. See, however, the reporting requirements for deposit interest described in Interest on deposits paid to certain nonresident aliens in the bullet list under Amounts Subject to Reporting on Form 1042-S, earlier. Bearer obligations targeted to foreign markets. Do not file Form 1042-S to report interest not subject to withholding on bearer obligations if a Form W-8 is not required. Caution: Withholding is required on interest paid on any bearer obligations targeted to foreign markets if the obligation is issued after March 18, 2012. You must file Form 1042-S to report this interest paid on an obligation issued after that date. Notional principal contract payments that are not ECI or dividend equivalents. Do not report on Form 1042-S amounts paid on a notional principal contract, other than an SNPC, if the amounts are not effectively connected with the conduct of a trade or business in the United States. All amounts paid on an SNPC that are treated as dividend equivalents should be reported as such on Form 1042-S. Accrued interest and OID. Interest paid on obligations sold between interest payment dates and the part of the purchase price of an OID obligation that is sold or exchanged in a transaction other than a redemption is not subject to reporting unless the sale or exchange is part of a plan, the principal purpose of which is to avoid tax, and the withholding agent has actual knowledge or reason to know of such plan. Certain withholdable payments. Withholdable payments not subject to reporting for chapter 3 purposes (other than bank deposit interest paid to certain nonresident aliens) are not required to be reported if withholding is not applied (or required to be applied) under chapter 4. Certain amounts realized. An amount realized that is excepted from withholding under Regulations section 1.1446(f)-4(b)(3) (less than 10% effectively connected gain by partnership).

# Caution:

Registered obligations targeted to foreign markets. Interest on a registered obligation that is targeted to foreign markets and that qualifies as portfolio interest is not subject to reporting if it is paid to a registered owner that is a financial institution or member of a clearing organization and you have received the required certifications. Caution: Reporting will be required on interest paid on any registered obligation (regardless of whether targeted to foreign markets) if the registered obligation is issued after December 31, 2015.

# Distributions Attributable to Dispositions of U.S. Real Property Interests by Publicly Traded Trusts and Qualified Investment Entities

Publicly traded trusts. In general, when a publicly traded trust makes a distribution to a foreign person attributable to the disposition of a U.S. real property interest, it must withhold tax under section 1445. However, this withholding liability is shifted to the person who pays the distribution to a foreign person (or to the account of the foreign person) if the special notice requirement of Regulations section 1.1445-8(f) and other requirements of Regulations section 1.1445-8(b)(1) are satisfied. The amount subject to withholding for a distribution by a publicly traded trust is determined under the rules of Regulations section 1.1445-5(c)(3). QIEs. Special rules apply to QIEs. A QIE is one of the following. A REIT. A RIC that is treated as a U.S. real property holding corporation (after applying certain rules in section 897(h)(4)(A)(ii)). Look‐through rule for QIEs. In most cases, any distribution from a QIE to a nonresident alien, foreign corporation, or other QIE that is attributable to the QIE's gain from the sale or exchange of a U.S. real property interest is treated as gain recognized by the nonresident alien, foreign corporation, or other QIE from the sale or exchange of a U.S. real property interest. A distribution by a QIE to a nonresident alien or foreign corporation that is treated as gain from the sale or exchange of a U.S. real property interest by the shareholder is subject to withholding at 21%. Certain exceptions apply to the look‐through rule for distributions by QIEs. Any distribution by a QIE with respect to stock regularly traded on an established securities market in the United States is not treated as gain from the sale or exchange of a U.S. real property interest if the shareholder did not own more than 5% of that stock (or 10% of that stock in the case of REITs) at any time during the 1‐year period ending on the date of the distribution. A distribution by a REIT is generally not treated as gain from the sale or exchange of a U.S. real property interest if the shareholder is a qualified shareholder (as described in section 897(k)(3)). These distributions may be included in the shareholder's gross income as a dividend (income code 06) from the QIE, not as long‐term capital gain. In addition, a qualified foreign pension fund or an entity all of the interests of which are held by a qualified foreign pension fund is generally not subject to the look‐through rule for distributions by QIEs for purposes of section 897(h). Use Forms 1042‐S and 1042 to report and pay over the withheld amounts. All other withholding required under section 1445 is reported and paid over using Form 8288, U.S. Withholding Tax Return for Certain Dispositions by Foreign Persons, and Form 8288‐A. For more information on reporting income from real property interests, see U.S. Real Property Interest in Pub. 515.

# Publicly Traded Partnerships (Sections 1446(a) and (f) Withholding Tax)

Although a PTP is a withholding agent for a distribution it makes to its partners, an entity receiving the distribution and acting as a nominee for the distribution is also treated as a withholding agent for the distribution and is required to withhold and report on Form 1042-S with respect to the amounts subject to withholding attributable to the distribution paid to foreign partners of the PTP. A nominee for this purpose is a person holding a PTP interest on behalf of a foreign person and that is a domestic person, a U.S. branch of a foreign corporation treated as a U.S. person for the distribution, or a QI assuming primary withholding responsibility for the distribution. See Regulations section 1.1446-4(b)(3). If you are the nominee for a PTP distribution, enter the PTP's name and other required information in boxes 16a through 16e with respect to the PTP on a Form 1042-S to report the amount of a distribution subject to section 1446(a) (income code 27), to report an amount realized on the distribution under section 1446(f) (income code 57), or when income code 58 applies to the distribution (for income not determinable by the nominee on the distribution), including when the 30% withholding rate under chapter 3 applies under Regulations section 1.1446-4(d). For a payment reported with income code 27 or 57, or income code 58 when withholding is at the rate under section 1446(a), report chapter 4 exemption code 14 (effectively connected income). If withholding is instead applied at a 30% rate on a payment reported with income code 58, report chapter 4 exemption code 21 (other payment not subject to chapter 4 withholding). See Regulations section 1.1446-4(d)(1). For income attributable to the distribution that is subject to withholding under chapter 3 or 4, report using the income code that would otherwise apply to report the payment to the recipient on a Form 1042-S for the year. Thus, unlike for other payments described in this paragraph, you need not associate the income subject to chapter 3 or 4 withholding with the PTP making the distribution for purposes of reporting on an additional Form 1042-S. These reporting requirements apply to a PTP distribution paid to a QI except that you need not associate any income attributable to a PTP distribution with the PTP making the distribution for reporting on Form 1042-S when you report to the QI as the recipient with respect to a withholding rate pool. Tip: As a result of the above reporting for PTP distributions, in certain cases a nominee may need to issue several Forms 1042-S with respect to a foreign partner based on the income codes associated with PTP distributions paid to the partner during the year and (in certain cases) the PTP making the distribution. For purposes of section 1446(f), a broker is generally required to report on Form 1042-S an amount realized from the transfer of a PTP interest that is paid to a foreign partner that is the transferor of the interest or to an NQI (other than when the broker agrees to report the NQI's account holders on Form 1042-S), a QI (other than a disclosing QI), or a U.S. branch or territory FI that is treated as a U.S. person for the payment. A broker should report the aggregate of the amounts realized from sales of PTP interests paid to each of these recipients using income code 57 and chapter 4 exemption code 14 (effectively connected income). For the reporting of amounts attributable to PTP distributions (including distributions subject to section 1446(f) withholding), see boxes 16a through 16e, later. For further information on reporting of amounts realized and PTP distributions paid to QIs, see Payment to QI of PTP distributions or amounts realized, later. For further information on reporting of amounts realized and PTP distributions paid to nonqualified intermediaries, see Amounts paid to an NQI or a flow-through entity of amounts realized and PTP distributions, later. For when an amount realized is reportable on Form 1042-S for section 1446(f) purposes, see Regulations section 1.1461-1(c)(2)(i). Tip: In a case in which a partner that is a U.S. person was treated as a foreign partner for purposes of withholding under section 1446(a) or (f) (including an allocation of a payment to the person made on a withholding statement), a Form 1042-S may be used to report the payment (and withholding) with respect to the U.S. person. The applicable Form 1099 must also be furnished when otherwise required of the withholding agent with respect to the payment but should not report the withholding that was applied under section 1446(a) or (f). For reporting requirements for Form 1099, see the General Instructions for Certain Information Returns. Partnerships (other than PTPs) that have effectively connected gross income allocable to foreign partners must file Form 8804, Annual Return for Partnership Withholding Tax (Section 1446). If these partnerships have effectively connected taxable income allocable to foreign partners, they must also pay a withholding tax under section 1446 and report these amounts on Form 8804 and the partners' allocable shares of these amounts on Form 8805.

# Requirement To Withhold

Chapter 3 withholding. For purposes of sections 1441 and 1442, a withholding agent must withhold 30% of any payment of an amount subject to withholding under chapter 3 (defined earlier) made to a payee that is a foreign person (or is presumed to be a foreign person) unless it can associate the payment with documentation to treat the payment as made to a foreign person entitled to a reduced rate of or exemption from withholding. For more information, see Chapter 3 Responsibilities under Responsibilities of a Withholding Agent To Obtain Form W-8 in the Instructions for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY. Also see Pub. 515. Chapter 4 withholding. For purposes of chapter 4, a withholding agent must withhold 30% of a withholdable payment (defined earlier) made to an FFI that is or is presumed to be a nonparticipating FFI (defined earlier). It also applies to withholdable payments made to certain NFFEs that fail to identify their substantial U.S. owners (or to certify that they have none) under Regulations section 1.1472-1(b). For more information, see Chapter 4 Responsibilities under Responsibilities of a Withholding Agent To Obtain Form W-8 in the Instructions for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, and W-8IMY. Also see Pub. 515. A payment will be subject to withholding under either chapter 3 or chapter 4 but not both. If the payment is of an amount subject to both chapter 3 and chapter 4 withholding, chapter 4 withholding takes precedence.

# Before Completing Form 1042-S

You must complete the following steps before completing Form 1042-S. Step 1. Determine if you have a Form 1042-S filing obligation. If you make a payment described under Amounts Subject to Reporting on Form 1042-S , earlier, you are required to file Form 1042-S for that payment. Note that you may have a Form 1042-S reporting obligation even if withholding is not required. Step 2. Determine whether the payment is: A "withholdable payment" under chapter 4, An "amount subject to withholding under chapter 3," Both a withholdable payment and an amount subject to withholding under chapter 3, or Neither a withholdable payment nor an amount subject to withholding under chapter 3. Be sure to carefully read through the exceptions to "withholdable payment" and the exemptions from withholding or taxation provided under chapter 3 that are included in Pub. 515. Note that reporting and withholding are done either under chapter 3 or chapter 4, not both. However, even if reporting is done under chapter 3, you may be required to provide certain chapter 4 information.

# Note:

Step 3. Determine the chapter indicator to be entered in box 3. The chapter indicator is generally based on whether amounts were withheld (or paid by the withholding agent) under chapter 3 or chapter 4. For example, if the payment is a withholdable payment and it is subject to chapter 4 withholding (see Requirement To Withhold , earlier), enter "4" in box 3. If no withholding was required on the payment, enter "3" in box 3. For additional information, see the instructions for box 3, later. Note: You must always complete boxes 4a (chapter 4 exemption code) and 4b (chapter 4 withholding tax rate) regardless of the chapter indicator entered in box 3. Note: If a payment is a withholdable payment under chapter 4, you must complete boxes 4a (chapter 4 exemption code), 4b (chapter 4 withholding tax rate), and 13k (recipient chapter 4 status code), even if the payment is properly classified with a chapter 3 indicator in box 3. Be sure to complete a separate Form 1042-S for: Each recipient of income, Each income type paid to the same recipient, and Each amount to which a separate tax rate was applied (if you withheld at more than one tax rate for a specific type of income that you paid to the same recipient).

# Payments by U.S. Withholding Agents

In general. U.S. withholding agents making payments described under Amounts Subject to Reporting on Form 1042-S , earlier, must file a separate Form 1042-S for each recipient who receives the income. Furthermore, withholding agents are not permitted to report multiple types of income on a single Form 1042-S (or substitute Form 1042-S) furnished to a recipient or on Copy A filed with the IRS. These filers must use a separate Form 1042-S (or substitute form) for information reportable on a single type of income. See Payments Made to Persons Who Are Not Recipients, later, if the payment is made to a foreign person that is not a recipient.

# Payments to Recipients

Example 1. WA, a U.S. withholding agent, makes a withholdable payment of U.S. source dividends to A, a foreign individual from whom it has received a Form W-8BEN and who is not eligible for a reduced rate of chapter 3 withholding under a treaty. WA must file a Form 1042-S for A, enter "3" in box 3, "06" in box 1 (income code), "00" in box 3a (chapter 3 exemption code), "30.00" in box 3b (chapter 3 tax rate), "15" in box 4a (payee not subject to chapter 4 withholding), "00.00" in box 4b (chapter 4 tax rate), "16" in box 13j (individual), and "23" in box 13k (individual). Tip: See Appendix C for a comprehensive analysis of this Example 1 fact pattern, including a step-by-step guide on how to complete Form 1042-S in its entirety. A U.S. withholding agent making a payment directly to a foreign partner in a PTP and that is either acting as a nominee for a PTP distribution subject to withholding under section 1446(a) or as a broker paying an amount realized subject to reporting on Form 1042-S for section 1446(f) purposes must complete a Form 1042-S and treat the partner as a recipient. Thus, the withholding agent must treat a foreign upper-tier partnership in the PTP or a foreign simple trust as a recipient for reporting of these payments on Form 1042-S. With respect to an upper-tier partnership, the reporting described in the preceding sentence applies regardless of whether the withholding agent determines its withholding on the payment based on the statuses of the partners in the upper-tier partnership (when permitted under applicable regulations to section 1446(a) or (f) for determining the rate of withholding). Note: A withholding agent is required to use chapter 4 reporting pool codes as the chapter 4 status code in the case of withholdable payments made to: A QI that does not assume primary withholding responsibility; A participating FFI or registered deemed-compliant FFI that is an NQI, NWP, or NWT; or An NQI, NWP, or NWT (other than a nonparticipating FFI) that provides a pool of nonparticipating FFIs, if the QI, NQI, NWP, or NWT provides chapter 4 withholding rate pool information in the withholding statement associated with its Form W-8IMY. See Amounts paid to an NQI or a flow-through entity of withholdable payments, later, and the presumption rules under Regulations section 1.1471-3(f) when such information is not provided for a withholdable payment made to an entity. Substitute dividends paid to qualified securities lenders (QSLs). A withholding agent that makes payments of substitute dividends to a QSL should complete Form 1042-S treating the QSL as the recipient. Use income code 34 or 53. Use recipient code 13 (qualified securities lender—qualified intermediary) or 14 (qualified securities lender—other) as the chapter 3 status code and include the applicable chapter 4 status code of the QSL. The withholding agent is not required to withhold on a substitute dividend payment if it receives, at least annually, a certificate from the QSL that includes a statement with the following information. The recipient of the substitute dividend is a QSL. With respect to the substitute dividend it receives from the withholding agent, the QSL states that it will withhold and remit or pay the proper amount of U.S. gross-basis tax. If the withholding agent receives a certificate from the QSL that includes a statement that contains the above information, use chapter 3 exemption code 11. If the QSL is also a QI with primary withholding responsibility, use chapter 3 exemption code 11 and not exemption code 06 for chapter 3 purposes. Amounts paid to certain U.S. branches or territory FIs. A U.S. withholding agent making a payment to a U.S. branch of an FFI or NFFE completes Form 1042-S as follows. If a withholding agent makes a payment to a U.S. branch that has provided the withholding agent with a Form W-8IMY stating that it has agreed to be treated as a U.S. person, the U.S. withholding agent treats the U.S. branch as the recipient using chapter 3 recipient code 05 (U.S. branch—treated as U.S. person) and chapter 4 recipient code 17 (U.S. branch—treated as U.S. person). If a withholding agent makes a payment to a U.S. branch that has provided a Form W-8IMY to transmit information regarding its chapter 4 reporting pools when the payment is a withholdable payment or the branch provides a chapter 4 withholding rate pool of U.S. payees and, to the extent applicable, recipient specific information for chapter 3 purposes, the U.S. withholding agent must complete a separate Form 1042-S for each chapter 4 reporting pool treating the U.S. branch as the recipient or, for chapter 3 purposes, for each recipient that is a foreign person whose documentation is associated with the U.S. branch's Form W-8IMY. If a payment cannot be reliably associated with recipient documentation, the U.S. withholding agent must complete Form 1042-S in accordance with the presumption rules. If a U.S. branch not treated as a U.S. person fails to certify that it will meet the requirements under Regulations section 1.1471-4(d)(2)(iii)(C), a withholding agent must report the branch as a nonparticipating FFI. If a withholding agent cannot reliably associate a payment with a Form W-8IMY from a U.S. branch, and if a withholding agent has an EIN for the branch, then the payment may be reported on a single Form 1042-S treating the U.S. branch as the recipient and reporting the income as ECI. If a withholding agent makes a payment to a territory FI acting as an intermediary or that is a flow-through entity, the withholding agent should report on Form 1042-S using the chapter 3 status codes for payments to U.S. branches (with the code used depending on whether the territory FI agrees to be treated as a U.S. person). If the territory FI agrees to be treated as a U.S. person, the withholding agent should similarly use the chapter 3 exemption code for a U.S. branch treated as a U.S. person. For chapter 4 purposes, the withholding agent should use the applicable chapter 4 status code for a territory FI (with the code used depending on whether the territory FI agrees to be treated as a U.S. person). In any case in which a payment is made to a territory FI described in this paragraph, the withholding agent should report the applicable territory in which the FI is resident for purposes of box 13b (recipient's country code). Amounts paid to a foreign estate. If a U.S. withholding agent makes a payment to a foreign estate, a Form 1042-S must be completed showing the estate as the recipient. Use recipient code 17 (estate) as the chapter 3 status code and the applicable recipient code for the chapter 4 status code. Dual claims. A U.S. withholding agent may make a payment to a foreign entity (for example, a hybrid entity) that is simultaneously claiming an exemption from chapter 4 withholding and a reduced rate of tax under chapter 3 on its own behalf for a part of the payment and an exemption from chapter 4 withholding and a reduced rate of tax under chapter 3 on behalf of persons in their capacity as interest holders in that entity on the remaining part. If the claims are consistent and the withholding agent has accepted the multiple claims, a separate Form 1042-S must be filed for the entity for those payments for which the entity is treated as claiming a reduced rate of withholding, and separate Forms 1042-S must be filed for each of the interest holders for those payments for which the interest holders are claiming a reduced rate of withholding. The Forms 1042-S must include the chapter 4 status of the payee (including the applicable chapter 4 exemption). If the claims are consistent but the withholding agent has not chosen to accept the multiple claims, or if the claims are inconsistent, a separate Form 1042-S must be filed for the person(s) being treated as the recipient(s). Special instructions for U.S. trusts and estates. Report the entire amount of income subject to reporting, regardless of estimates of distributable net income.

# Caution:

Payments directly to beneficial owners or partners. A U.S. withholding agent making a payment subject to withholding under chapter 3 or 4 directly to a beneficial owner must complete Form 1042-S and treat the beneficial owner as the recipient. Boxes 15a through 15m should be left blank. The Form 1042-S must also include the appropriate chapter 3 and chapter 4 exemption codes, if applicable, in boxes 3a and 4a, as well as the appropriate recipient codes for the chapter 3 and chapter 4 status codes for a payment that is a withholdable payment and an amount subject to chapter 3 withholding. A U.S. withholding agent should complete boxes 16a through 16e only if it is completing Form 1042-S as a paying agent acting pursuant to an agreement to act as an authorized agent for filing and reporting Forms 1042 and 1042-S. In the case of foreign joint owners, you may provide a single Form 1042-S made out to the owner whose status you relied upon to determine the applicable rate of withholding (the owner subject to the highest rate of withholding). If, however, any one of the owners requests its own Form 1042-S, you must furnish a Form 1042-S to the person who requests it. If the request is made after a Form 1042-S was filed reporting the payment and tax withheld to only one of the joint owners, you should amend the originally filed Form 1042-S to allocate the payment and tax withheld among the joint owners accordingly and provide copies of the amended forms to each recipient. If more than one Form 1042-S is issued for a single payment, the aggregate amount paid and tax withheld that is reported on all Forms 1042-S cannot exceed the total amounts paid to joint owners and the tax withheld on those payments. In any event, each Form 1042-S can only include the recipient information (boxes 13a through 13h) for one of the beneficial owners. Form 1042-S must not be completed with more than one of the joint owners as the recipient. Caution: In the case of joint owners, Form 1042-S can only list one of the owners as the recipient in box 13a.

# Caution:

Payments to a QI (including a QDD), WP, or WT under chapter 3 or 4. A U.S. withholding agent that makes payments to a QI subject to withholding under chapter 3 or 4 (whether or not the QI assumes primary withholding responsibility), a QI acting as a QDD with respect to a payment, a WP, or a WT should complete Form 1042-S in most cases, treating the QI, QDD, WP, or WT as the recipient. If a payment is being made to a QI that is acting as a QDD with respect to the payment, a U.S. withholding agent should report the QDD as the recipient showing the QDD as the recipient in box 13a (identifying the QDD by the name used for the QDD on the Form W-8IMY it provides, which should include a branch identifier, if applicable) and using recipient code 35 (qualified derivatives dealer) as the chapter 3 status code. See Payments allocated, or presumed made, to U.S. nonexempt recipients , later, for exceptions. A QI that does not assume primary withholding responsibility for chapters 3 and 4 purposes is required to provide information regarding the allocations of income subject to a particular withholding rate to the withholding agent on the withholding statement associated with its Form W-8IMY. In such a case, the U.S. withholding agent must complete a separate Form 1042-S for each withholding rate pool associated with the QI. For purposes of chapter 4, a QI may provide a single pool of recalcitrant account holders (rather than separate pools for each class). In such a case, the withholding agent may use chapter 4 pooled reporting code 49 (QI-recalcitrant pool—general). A QI that assumes primary withholding responsibility, a WP, or a WT is not required to provide withholding rate pool information to a withholding agent but will report such information directly to the IRS. A U.S. withholding agent making a withholdable payment to an FFI that is a QI (that assumes primary withholding responsibility and is not acting as a QDD with respect to the payment), a WP, or a WT must use recipient code 12 (qualified intermediary), 09 (withholding foreign partnership), or 11 (withholding foreign trust) as the chapter 3 status code and must use recipient code 05 (participating FFI—other), 06 (participating FFI—reporting Model 2 FFI), 07 (registered deemed-compliant FFI—reporting Model 1 FFI), 09 (registered deemed-compliant FFI—other) for an FFI treated as deemed-compliant under an IGA, 31 (nonreporting IGA FFI), or, for a payment to a QI, 27 (exempt beneficial owner) as the chapter 4 status code. A U.S. withholding agent must use chapter 4 recipient code 48 (U.S. payees pool) when reporting a reportable amount allocated to a chapter 4 withholding rate pool of U.S. payees of a QI and report the chapter 3 recipient code 12 (qualified intermediary). A U.S. withholding agent must not use any chapter 3 pooled reporting code (codes 27 through 32), as such codes are only to be used by a withholding agent that is a QI, WP, or WT. See Amounts Paid by QIs , later, and the instructions for boxes 13j and 13k, later. Use of an inappropriate recipient code may cause a notice to be generated. Caution: A QI is generally required to act in such capacity only for designated accounts for purposes of chapters 3, 4, and 61. Therefore, such an entity may also provide a Form W-8IMY in which it certifies that it is acting as an NQI for other accounts and, if it is an FFI that is receiving a withholdable payment, that it is a participating FFI, a registered deemed-compliant FFI, or an FFI treated as deemed-compliant under an IGA. A U.S. withholding agent that receives a Form W-8IMY on which the foreign person providing the form indicates that it is not acting as a QI may not treat the foreign person as a recipient except as otherwise provided in these instructions. A withholding agent must not use the EIN that a QI provides in its capacity as such to report payments that are treated as made to an entity in its capacity as an NQI. In that case, use the GIIN, if any, and EIN that is provided by the entity on its Form W-8IMY in which it claims that it is acting as an NQI or a flow-through entity.

# Example 2.

WA, a U.S. withholding agent, makes a withholdable payment of U.S. source dividends to QI, a qualified intermediary that does not assume primary chapters 3 and 4 withholding responsibility and that is a participating FFI. QI provides WA with a valid Form W-8IMY with which it associates a withholding statement that allocates 95% of the payment to a chapter 3, 15% withholding rate pool with a single chapter 4 exemption code, and 5% of the payment to a chapter 4, 30% withholding rate pool of recalcitrant account holders. WA must complete a Form 1042-S for the dividends allocated to the chapter 3, 15% withholding rate pool, showing "3" in box 3, "04" in box 3a (chapter 3 exemption code), "15.00" in box 3b (chapter 3 tax rate), chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) in box 4a, "00.00" in box 4b (chapter 4 tax rate), and QI as the recipient in box 13a along with recipient code 12 (qualified intermediary) as the chapter 3 status code, and recipient code 05 (participating FFI—other) as the chapter 4 status code. WA must also complete a Form 1042-S for the dividends allocated to the chapter 4, 30% withholding rate pool, showing "4" in box 3, chapter 3 exemption code 12 (payee subjected to chapter 4 withholding) in box 3a, "00.00" in box 3b (chapter 3 tax rate), "00" in box 4a (chapter 4 exemption code), and "30.00" in box 4b with QI as the recipient in box 13a, and recipient code 12 (qualified intermediary) as the chapter 3 status code, and recipient code 49 (QI‐recalcitrant pool—general) as the chapter 4 status code.

# Payments allocated by QIs, or presumed made, to U.S. nonexempt recipients.

A QI may provide Forms W-9 or other information regarding U.S. nonexempt recipients that the QI (or other entity maintaining the account) is required to report under chapter 61 and for which the QI does not assume primary Form 1099 reporting responsibility. A QI may also provide information regarding U.S. nonexempt recipients on whom the QI elects to backup withhold under section 3406 instead of withholding under chapter 4 on payments made to an account holder. If Forms W-9 or other information is provided together with information allocating all or a part of the payment to U.S. nonexempt recipients, you must report income allocable to the U.S. nonexempt recipients on the appropriate Form 1099 and not on Form 1042-S even though you are paying that income to a QI. The QI may also provide information regarding U.S. nonexempt recipients in a chapter 4 withholding rate pool that the withholding agent must report on Form 1042-S. You may also be required under the presumption rules to treat a payment made to a QI as made to a payee that is a U.S. nonexempt recipient from which you must withhold on the payment under the backup withholding provisions. In this case, you must report the payment on the appropriate Form 1099. See the General Instructions for Certain Information Returns, available at IRS.gov/1099GeneralInstructions.

# Example 3.

WA, a U.S. withholding agent, makes a withholdable payment of U.S. source dividends to QI, a qualified intermediary and registered deemed-compliant FFI that is a local FFI described in Regulations section 1.1471-5(f)(1)(i)(A). QI provides WA with a valid Form W-8IMY certifying that it is transmitting Forms W-9 for U.S. nonexempt recipients and with which it associates a withholding statement that allocates 95% of the payment to a chapter 3, 15% withholding rate pool with a single chapter 4 exemption code, and 5% of the payment to C, a U.S. individual. QI also provides WA with C's Form W-9. C is a direct account holder of QI and a U.S. citizen that is a resident of QI's local jurisdiction that QI is not required to report under chapter 4 (see Regulations section 1.1471-5(f)(1)(i)(A)) and thus cannot be included in a chapter 4 withholding rate pool of U.S. payees. See Regulations section 1.6049-4(c)(4). WA must complete a Form 1042-S, showing QI as the recipient in box 13a, and WA should use recipient code 12 (qualified intermediary) as the chapter 3 status code and recipient code 09 (registered deemed-compliant FFI—other) as the chapter 4 status code for the dividends allocated to the 15% withholding rate pool. WA must also complete a Form 1099-DIV issued to C reporting the part of the dividend allocated to C.

# Example 4.

WA, a withholding agent, makes a withholdable payment of U.S. source dividends to QI, a qualified intermediary that is a reporting Model 1 FFI. QI provides WA with a valid Form W-8IMY with which it associates a withholding statement that allocates 40% of the payment to a chapter 3, 15% withholding rate pool and 40% to a chapter 3, 30% withholding rate pool. QI does not provide any withholding rate pool information regarding the remaining 20% of the payment. WA must apply the presumption rule to the part of the payment (20%) that has not been allocated. Under the presumption rules of Regulations section 1.1471-3(f) for a withholdable payment made to an entity, 20% of the payment is treated as paid to a nonparticipating FFI. WA must complete three Forms 1042-S. First, a Form 1042-S for dividends subject to 15% withholding, showing "3" in box 3, "04" in box 3a (chapter 3 exemption code), "15.00" in box 3b (chapter 3 tax rate), chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) in box 4a, "00.00" in box 4b (chapter 4 tax rate), QI as the recipient in box 13a, recipient code 12 (qualified intermediary) as the chapter 3 status code, and recipient code 07 (registered deemed-compliant FFI—reporting Model 1 FFI) as the chapter 4 status code (because the payment is a withholdable payment). Second, a Form 1042-S for dividends subject to 30% withholding, showing "3" in box 3, "00" in box 3a (chapter 3 exemption code), "30.00" in box 3b (chapter 3 tax rate), chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) in box 4a, "00.00" in box 4b (chapter 4 tax rate), QI as the recipient in box 13a, recipient code 12 (qualified intermediary) as the chapter 3 status code, and recipient code 07 (registered deemed-compliant FFI—reporting Model 1 FFI) as the chapter 4 status code. Third, a Form 1042-S for dividends subject to 30% withholding, showing "4" in box 3, chapter 3 exemption code 12 (payee subjected to chapter 4 withholding) in box 3a, "00.00" in box 3b (chapter 3 tax rate), "00" in box 4a (chapter 4 exemption code), "30.00" in box 4b (chapter 4 tax rate), "Unknown Recipient" as the recipient name in box 13a, recipient code 21 (unknown recipient) as the chapter 3 status code, and recipient code 29 (unknown recipient) as the chapter 4 status code. Also, QI's name, status codes, country code, address, GIIN, and QI-EIN must be entered in boxes 15a through 15m.

# Tip:

Payment to QI of PTP distributions or amounts realized. A U.S. withholding agent making a payment to a QI that is subject to withholding on a PTP distribution or an amount realized subject to reporting for section 1446(f) purposes should generally treat the QI as the recipient and report as described directly above for a U.S. withholding agent making payments to a QI for chapters 3 and 4 purposes (including when the QI does not assume primary withholding responsibility and provides withholding rate pool information). In a case of a QI acting as a disclosing QI for a payment of a PTP distribution or an amount realized subject to reporting under section 1446(f), however, a U.S. withholding agent should report the account holder of the QI as the recipient and the QI as a disclosing QI (using chapter 3 status code 39 and reporting the QI's information in boxes 15a through 15m, including its QI-EIN). In a case in which a U.S withholding agent makes a payment of a PTP distribution or amount realized through multiple QIs acting as disclosing QIs, the withholding agent should report in boxes 15a through 15m with respect to the disclosing QI maintaining a direct account for the partner in the PTP. For payments of PTP distributions made to a QI, the U.S. withholding agent should report these payments with respect to the PTP making the distribution to the extent required, as discussed in Publicly Traded Partnerships (Sections 1446(a) and (f) Withholding Tax), earlier. Tip: Although a payment to a disclosing QI is reported as made to a specified account holder of the QI (as the recipient), a U.S. withholding agent is required to provide a recipient copy of the Form 1042-S to the disclosing QI maintaining the direct account for the partner in the PTP (in addition to the recipient copy issued to the account holder of the QI receiving the payment).

# Payments Made to Persons Who Are Not Recipients

Disregarded entities and hybrid entities. If a U.S. withholding agent makes a payment to a disregarded entity that is not a hybrid entity making a treaty claim, and receives a valid Form W-8BEN-E or W-8ECI from a foreign person that is the single owner of the disregarded entity, the withholding agent must file a Form 1042-S in the name of the foreign single owner. The TIN on the Form 1042-S, if required, must be the foreign single owner's TIN. However, in box 13l, include the GIIN of the disregarded entity provided in Part II of Form W-8BEN-E if the owner is an FFI. Example 5. WA, a withholding agent, makes a withholdable payment of interest to LLC, a foreign limited liability company that is not an FFI. LLC is wholly owned by FC, a foreign corporation that is an excepted nonfinancial foreign entity. LLC is treated as a disregarded entity. WA has a Form W-8BEN-E from FC on which it states that it is the beneficial owner of the income paid to LLC. WA reports the interest payment on Form 1042-S showing FC as the recipient. The result would be the same if LLC was a domestic entity. A disregarded entity can, however, claim to be the beneficial owner of a payment if it is a hybrid entity claiming treaty benefits. See Form W-8BEN and its instructions for more information. If a disregarded entity claims on a valid Form W-8BEN-E to be the beneficial owner, the U.S. withholding agent must complete a Form 1042-S treating the disregarded entity as a recipient and using recipient code 26 (hybrid entity making treaty claim) as the chapter 3 status code and the applicable recipient code for the chapter 4 status code of the single owner when the payment is a withholdable payment and chapter 4 withholding does not apply. A hybrid entity with multiple owners may also claim treaty benefits. See Form W-8BEN-E and its instructions for more information on documentation requirements that apply in such cases. If a hybrid entity treated as a resident of a treaty country claims treaty benefits on a valid Form W-8BEN-E associated with a withholdable payment (and chapter 4 withholding does not apply with respect to any of its owners to such payment or portion of such payment), the U.S. withholding agent should complete a Form 1042-S treating the hybrid entity as a recipient, use code 26 (hybrid entity making treaty claim) as the chapter 3 recipient status code, and leave blank the chapter 4 recipient status code. To the extent, however, that a portion of a withholdable payment is allocated to an owner of the hybrid entity for which chapter 4 withholding must be applied, the U.S. withholding agent must issue a separate Form 1042-S to such owner using the applicable recipient codes for the owner's chapters 3 and 4 status codes and report the hybrid entity as the intermediary. The withholding agent must do so for each such owner for which chapter 4 withholding applies and must exclude amounts allocable to such owners from the Form 1042-S issued to the hybrid entity. If an owner of a reverse hybrid entity claims treaty benefits on a valid Form W-8BEN-E or W-8BEN (and chapter 4 withholding does not apply with respect to the payment to the reverse hybrid entity), the U.S. withholding agent should issue a Form 1042-S for the portion of the payment allocable to each such owner treating the owner as the recipient, using the applicable recipient codes for the chapters 3 and 4 status codes, and report the reverse hybrid entity as the intermediary in boxes 15a through 15m. In such a case, the U.S. withholding agent must issue a Form 1042-S to the reverse hybrid entity for the remainder of the payment treating such entity as the recipient and using the applicable chapters 3 and 4 status codes. However, if chapter 4 withholding applies with respect to the payment to the reverse hybrid entity, the U.S. withholding agent must instead issue a Form 1042-S to the reverse hybrid entity for the entire payment and withhold accordingly. Example 6. WA, a withholding agent, makes a withholdable payment of interest to FP, a hybrid entity organized in Country X. FP is treated as a partnership under the Internal Revenue Code but is treated as a company resident in Country X for Country X purposes. WA has a Form W-8BEN-E from FP on which it claims treaty benefits. WA also has a Form W-8IMY from FP that includes its chapters 3 and 4 statuses and a W-8BEN-E from each of FP's owners, FC1 and FC2, which certify that FC1 is a participating FFI and FC2 is a nonparticipating FFI. The attached withholding statement allocates 80% of the payment to FC1 and 20% of the payment to FC2. WA must issue a Form 1042-S for 80% of the payment to FP as the recipient using recipient code 26 (hybrid entity making treaty claim) as the chapter 3 status code, and leaving blank the recipient code for the chapter 4 status code. WA must withhold under chapter 4 on the remaining 20% of the payment allocated to FC2 and issue a Form 1042-S to FC2 as the recipient using recipient code 15 (corporation) as the chapter 3 status code and recipient code 15 (nonparticipating FFI) as the chapter 4 status code and must report FP as the intermediary in boxes 15a through 15m. Amounts paid to an NQI or a flow-through entity of withholdable payments. If a U.S. withholding agent makes a payment to an NQI or a flow-through entity (other than a nonparticipating FFI) with respect to a withholdable payment, it must complete a separate Form 1042-S for each recipient on whose behalf the NQI or flow-through entity acts as indicated by its withholding statement and the documentation associated with its Form W-8IMY. If a payment is made through tiers of NQIs or flow-through entities, the withholding agent must nevertheless complete Form 1042-S for the recipients to which the payments are remitted. A withholding agent completing Form 1042-S for a recipient that receives a payment through an NQI or a flow-through entity must include in boxes 15a through 15m of Form 1042-S the name, country code, address, TIN (if any), GIIN (if any), and status codes of the NQI or flow-through entity from whom the recipient directly receives the payment. If, however, a U.S. withholding agent makes withholdable payments to an NQI or a flow-through entity that is a participating FFI or registered deemed-compliant FFI that is allocable to a chapter 4 withholding rate pool as indicated by the FFI's withholding statement, the U.S. withholding agent should complete a separate Form 1042-S for each chapter 4 reporting pool (that is, pool of recalcitrant account holders, pool of nonparticipating FFIs, or pool of payees that are U.S. persons) treating the participating FFI or registered deemed-compliant FFI as the recipient and must include the GIIN and chapter 3 status code of the FFI and the applicable chapter 4 reporting pool code as the chapter 4 status code. If a payment is made through tiers of NQIs or flow-through entities that are participating FFIs or registered deemed-compliant FFIs, the withholding agent must nevertheless complete Form 1042-S for each chapter 4 reporting pool to which the payments are allocated and must report, as the recipient, the FFI from whom the recipients included in the chapter 4 reporting pool directly receive the payment. Example 7. WA, a withholding agent, makes a withholdable payment of interest to FFI1, a reporting Model 1 FFI. FFI1 provides WA with a valid Form W-8IMY with which it associates a withholding statement that allocates 80% of the payment to FFI2, a participating FFI, and 20% of the payment to a pool of nonparticipating FFIs. FFI1 also provides WA with FFI2's Form W-8IMY with which it associates a withholding statement that allocates 100% of the payment to recalcitrant pool-no U.S. indicia. WA must complete a Form 1042-S for the interest allocated to a pool of nonparticipating FFIs with FFI1 as the recipient and must complete another Form 1042-S for the interest allocated to a pool of recalcitrant account holders—no U.S. indicia with FFI2 as the recipient. If a U.S. withholding agent makes a withholdable payment to an NQI or a flow-through entity that is a participating FFI or deemed-compliant FFI, and cannot reliably associate the payment, or any part of the payment, with a withholding statement, or to the extent required, a valid withholding certificate (Form W-8 or W-9) or other valid appropriate documentation from a recipient, the withholding agent must follow the appropriate presumption rules for that payment which, if the payment is a withholdable payment, will generally require the withholding agent to withhold 30% under chapter 4 because such payment is presumed made to a nonparticipating FFI. See Regulations section 1.1471-3(f)(5). For this purpose, if the allocation information provided to the withholding agent indicates an allocation of more than 100% of the payment, then no part of the payment should be considered to be associated with a Form W-8, Form W-9, or other appropriate documentation. The Form 1042-S should be completed by entering "Unknown Recipient" in box 13a and recipient code 21 (unknown recipient) as the chapter 3 status code and recipient code 29 (unknown recipient) as the chapter 4 status code. Also, the name, country code, address, TIN (if any), GIIN (if any), and status codes of the FFI should be entered in boxes 15a through 15m. If a U.S. withholding agent makes a withholdable payment to an NQI or a flow-through entity that is a nonparticipating FFI, the withholding agent must treat the payments as made to an unknown recipient regardless of whether it can reliably associate the payment, or any part of the payment, with a valid withholding certificate (Form W-8 or W-9) or other valid appropriate documentation from a recipient (see Regulations section 1.1471-3(d)(8)). The withholding agent should complete a Form 1042-S showing "Unknown Recipient" in box 13a and recipient code 21 (unknown recipient) as the chapter 3 status code and recipient code 29 (unknown recipient) as the chapter 4 status code. Also, the name, country code, address, chapter 4 status code, and TIN (if any) of the nonparticipating FFI should be entered on Form 1042-S in boxes 15a through 15m. If, however, an NQI or a flow-through entity that is a nonparticipating FFI provides documentation described in Regulations section 1.1471-3(d)(8)(ii) to establish that the withholdable payment or a portion of the payment is beneficially owned by an exempt beneficial owner, then the withholding agent should complete a Form 1042-S for each exempt beneficial owner showing chapter 4 exemption code 15 (payee not subject to chapter 4 withholding); the exempt beneficial owner as the recipient in box 13a; and the name, country code, address, chapter 4 status code, and TIN (if any) of the nonparticipating FFI in boxes 15a through 15m. For any remaining portion of the payment, the withholding agent should complete a Form 1042-S to an unknown recipient as described directly above. Example 8. FP is an NWP (flow-through entity) that is a certified deemed-compliant FFI. FP receives from WA, a U.S. withholding agent, a withholdable payment of interest described by income code 01 (interest paid by U.S. obligors—general). FP has three partners, A, B, and C, all of whom are individuals. FP provides WA with a Form W-8IMY certifying that it is transmitting Forms W-9 for U.S. nonexempt recipients and Forms W-8BEN from A and B and a Form W-9 from C, a U.S. nonexempt recipient. In addition, FP provides a complete withholding statement in association with its Form W-8IMY that allocates the interest payments among A, B, and C. WA must file two Forms 1042-S, one each for A and B, treating FP as the intermediary in boxes 15a through 15m. WA should also file a Form 1099-INT for C. Example 9. The facts are the same as in Example 8, except that FP does not provide any documentation from its partners. Because WA cannot reliably associate the withholdable payment of interest with documentation from a payee, it must apply the presumption rules of Regulations section 1.1471-3(f) to treat the interest as paid to a nonparticipating FFI. A Form 1042-S should be completed by entering "4" in box 3, "Unknown Recipient" in box 13a, recipient code 21 (unknown recipient) as the chapter 3 status code, and recipient code 29 (unknown recipient) as the chapter 4 status code. Also, the name, country code, address, status codes, and TIN (if any) of FP should be entered in boxes 15a through 15m. Example 10. The facts are the same as in Example 9, except that FP is a participating FFI and provides WA with a Form W-8IMY certifying that it is reporting its U.S. accounts under chapter 4 and a withholding statement allocating 33% of the payment to a pool of U.S. payees. With respect to the U.S. pool of payees, WA must file a Form 1042-S showing FP as the recipient in box 13a and include FP's GIIN, recipient code 08 as the chapter 3 status code (partnership other than withholding foreign partnership, publicly traded partnership, or partnership QDD), and recipient code 48 (U.S. payees pool) as the chapter 4 status code. WA should enter "3" in box 3 as the chapter indicator, leave boxes 3a and 3b blank, and enter exemption code 18 (U.S. payees of a participating FFI or registered deemed-compliant FFI) in box 4a, and "00.00" in box 4b. Amounts paid to an NQI or a flow-through entity of amounts realized and PTP distributions. A U.S. withholding agent making a payment to an NQI that is subject to withholding on a PTP distribution other than under section 1446 should generally report the NQI and the recipient of the distribution on Form 1042-S in accordance with the requirements applicable to withholdable payments made to NQIs (described earlier). In the case, of a PTP distribution paid to a flow-through entity, however, the withholding agent should report the flow-through entity as the recipient for an amount subject to section 1446(a) unless it is a grantor trust (with the trust grantors or owners treated as the recipients). In either case, the U.S. withholding agent must provide a Form 1042-S that is associated with the PTP distribution to the extent that PTP information is required to be included on Form 1042-S in accordance with Boxes 16a Through 16e, later, and as described under Publicly Traded Partnerships (Sections 1446(a) and (f) Withholding Tax), earlier. A U.S. withholding agent making a payment to an NQI of an amount realized subject to reporting for purposes of section 1446(f) (including on a PTP distribution) should generally treat the recipient as an unknown recipient because section 1446(f) withholding applies to an NQI without regard to the statuses of its account holders receiving the amount realized. A single Form 1042-S may be issued to the NQI in this case regardless of the number of NQI account holders. If the withholding agent agrees to report the NQI account holders on Form 1042-S, however, it may report the amount realized and withholding applied under section 1446(f) with respect to each NQI account holder on Form 1042-S. See the instructions for Form W-8IMY for the requirements for such an agreement (including that the withholding agent issue a recipient copy of the Form 1042-S to the NQI with respect to each Form 1042-S issued to an NQI account holder for an amount realized). A U.S. withholding agent making a payment to a flow-through entity of an amount realized reportable on Form 1042-S must report the flow-through entity as the recipient except to the extent it is treated as a grantor trust (in which case the trust's grantor or owner is the recipient).

# Pro-rata reporting to NQI.

If the withholding agent has agreed that an NQI (other than a nonparticipating FFI) may provide information allocating a payment to its account holders under the alternative procedure of Regulations section 1.1441-1(e)(3)(iv)(D) (no later than February 14, 2026) and the NQI fails to allocate more than 10% of the payment in a withholding rate pool to the specific recipients in the pool or an applicable chapter 4 withholding rate pool, the withholding agent must file a Form 1042-S for each recipient in the pool on a pro-rata basis. The withholding agent must check box 15 (pro-rata basis reporting) on each Form 1042-S. For example, if there are four account holders in a withholding rate pool that receives a $100 payment and the NQI fails to allocate more than $10 of the payment, the withholding agent must file four Forms 1042-S, one for each account holder in the pool, showing $25 of the income to each and box 15 checked. If, instead, the NQI fails to timely allocate 10% or less of the payment in a withholding rate pool to the specific recipients in a pool, the withholding agent must file a Form 1042-S for each recipient for which it has allocation information and report the unallocated part of the payment on a Form 1042-S as made to an "unknown recipient." In this case, the withholding agent does not check box 15 on any of the Forms 1042-S.

# Payments allocated, or presumed made, to U.S. nonexempt recipients.

You may be given Forms W-9 or other information regarding U.S. nonexempt recipients from an NQI or a flow-through entity together with information allocating all or a part of the payment to U.S. nonexempt recipients. You must report income allocable to a U.S. nonexempt recipient on the appropriate Form 1099 and not on Form 1042-S, even though you are paying that income to an NQI or a flow-through entity. If, however, a participating FFI or registered deemed-compliant FFI provides a withholding statement allocating all or part of the payment to a chapter 4 withholding rate pool of U.S. payees along with the certification provided on Form W-8IMY required for reporting such pool (as described in Regulations section 1.1471-3(c)(3)(iii)(B)), you must report the income allocable to such pool on Form 1042-S.

# Amounts Paid by QIs

# Caution:

In general. For purposes of chapter 4, a QI must complete a Form 1042-S for payments withheld under chapter 4 determined in accordance with the income codes used to file Form 1042-S. A QI that is a participating FFI or registered deemed-compliant FFI may use chapter 4 pooled reporting codes 42 through 48 to allocate payments made to its recalcitrant account holders, payees that are nonparticipating FFIs, and payees that are U.S. persons. A QI should not use chapter 4 reporting pool 49 (QI‐recalcitrant pool—general) to report its accounts but may use it to report accounts maintained by another QI. A QI that is an NFFE or FFI treated as deemed-compliant under an applicable IGA (as described in Regulations section 1.1441-1(e)(5)(ii)(A)) may use chapter 4 reporting pool code 47 to report payments allocable to a pool of nonparticipating FFIs. A QI may also use the chapter 4 pooled reporting codes to report payments allocable to account holders, payees, or owners of another participating FFI or registered deemed-compliant FFI that is an NQI, NWP, or NWT, and it must provide its chapter 4 withholding rate pools on its withholding statement. In such case, the QI must include the NQI, NWP, or NWT as the recipient in box 13a and the applicable recipient code for such entity as the chapter 3 status code. For payments subject to chapter 3 withholding that are exempt from chapter 4 withholding and made by the QI directly to foreign beneficial owners (or that are treated as paid directly to beneficial owners), the QI may report on the basis of chapter 3 reporting pools, in most cases. A QI may not report on the basis of reporting pools in the circumstances described under Recipient-by-Recipient Reporting by QIs , later. For payments not subject to chapter 4 withholding, a QI may use a single chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) and a single chapter 3 reporting pool code 27 (withholding rate pool—general) as the chapter 3 status code for all reporting pools, except for amounts paid to foreign tax-exempt recipients for which chapter 3 reporting pool code 28 should be used. Note, however, that a QI should use recipient code 28 only for pooled account holders that have claimed an exemption based on their tax-exempt status and not some other exemption (tax treaty or other Internal Revenue Code section). If a QI uses a chapter 3 pooled reporting code (because chapter 4 withholding does not apply and the QI is not allocating the payment to a U.S. pool of payees), it should leave blank the recipient code for the chapter 4 status code. Example 11. QI, a qualified intermediary and participating FFI, has four direct account holders, A and B, foreign individuals, and X and Y, foreign corporations. The withholdable payments made to these direct account holders are exempt from chapter 4 withholding because of the chapter 4 status of each account holder. A and X are residents of a country with which the United States has an income tax treaty and have provided documentation that establishes that they are entitled to a lower treaty rate of 15% on withholding of dividends from U.S. sources. B and Y are not residents of a treaty country and are subject to 30% withholding on dividends. QI receives U.S. source dividends on behalf of its four customers. QI must file one Form 1042-S for the 15% withholding rate pool. This Form 1042-S must show income code 06 (dividends paid by U.S. corporations—general) in box 1, "04" in box 3a (chapter 3 exemption code), "15.00" in box 3b (chapter 3 tax rate), chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) in box 4a, "00.00" in box 4b (chapter 4 tax rate), "Withholding rate pool" in box 13a (recipient's name), chapter 3 reporting pool code 27 (withholding rate pool—general) as the chapter 3 status code, and a blank chapter 4 status code. QI must also file one Form 1042-S for the 30% withholding rate pool that contains the same information as the Form 1042-S filed for the 15% withholding rate pool, except that it will show "30.00" in box 3b (chapter 3 tax rate). Example 12. The facts are the same as in Example 11, except that Y is an organization that has tax-exempt status in the United States and in the country in which it is located, and B is a recalcitrant account holder with U.S. indicia. QI must file three Forms 1042-S. One Form 1042-S (for amounts allocable to A and X) will contain the same information as in Example 11. The second Form 1042-S (for amounts allocable to Y) will contain information for the withholding rate pool consisting of the amounts paid to Y. This Form 1042-S will show income code 06 (dividends paid by U.S. corporations—general) in box 1, exemption code 02 (exempt or reduced withholding under IRC) in box 3a, "00.00" in box 3b (chapter 3 tax rate), chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) in box 4a, "00.00" in box 4b (chapter 4 tax rate), "Zero rate withholding pool-exempt organizations" or similar designation in box 13a (recipient's name), chapter 3 code 28 (withholding rate pool—exempt organization) in box 13j, and a blank chapter 4 status code in box 13k. The third Form 1042-S will contain information for the recalcitrant pool consisting of amounts paid to B. This Form 1042-S will show income code 06 (dividends paid by U.S. corporations-general) in box 1, code 12 (payee subjected to chapter 4 withholding) in box 3a (chapter 3 exemption code), "00.00" in box 3b (chapter 3 tax rate), "00" in box 4a (chapter 4 exemption code), "30.00" in box 4b (chapter 4 tax rate), "recalcitrant pool—U.S. indicia" or similar designation in box 13a (recipient's name), chapter 4 recipient code 43 (recalcitrant pool—U.S. indicia) as the chapter 4 status code in box 13k, and a blank chapter 3 status code in box 13j. Caution: Under the terms of its QI agreement with the IRS, a QI that is an FFI may be required to report the amounts paid to U.S. nonexempt recipients on Form 1099 or Form 8966 using the name, address, and TIN of the payee to the extent those items of information are known. These amounts must be reported on Form 1042-S if allocated to a chapter 4 withholding rate pool of U.S. payees. A QI acting as a QDD must separately report on Forms 1042-S payments that it makes in its QDD capacity. The QI should report the name of the QDD that makes the payment as the withholding agent in box 12d (following the naming protocol used for applying to be a QDD) and should use withholding agent code 35 as the chapter 3 status code. Similarly, if the QDD is a partnership or branch of a partnership, that QDD must separately report allocations to its partners of QDD items on Forms 1042-S, entering the name of the QDD as the withholding agent in box 12d (following the naming protocol). Caution: A QI acting as a QDD with respect to a payment may only use chapter 3 pooled reporting codes 27 and 28.

# Amounts Paid to PAIs

In most cases, a QI must report payments subject to withholding under chapter 3 or 4 made to each PAI (defined under Definitions , earlier) as if the PAI's direct account holders were its own. For purposes of chapter 4, a QI that is a participating FFI, a registered deemed-compliant FFI, or an FFI treated as deemed-compliant under an applicable IGA (as described in Regulations section 1.1441-1(e)(5)(ii)(A)) may use chapter 4 reporting pool code 47 to allocate payments made to the PAI's payees that are nonparticipating FFIs, and may treat the PAI as the recipient on Form 1042-S with respect to each such pool. For chapter 3 purposes, if the payment is made directly by the PAI to the recipient, the QI may report the payment on a pooled basis. A QI may not, however, report on a pooled basis as described in the preceding sentence when acting as a QDD because, under the QI agreement, a QI may not enter into a private arrangement with any account holder for which it acts as a QDD. A separate Form 1042-S is required for each withholding rate pool of each PAI (unless the QI is acting as a QDD with respect to the payment). However, the QI must include the name and address of the PAI and use pooled reporting code 29 (PAI withholding rate pool—general) or 30 (PAI withholding rate pool—exempt organization) as the chapter 3 status code. If the PAI is providing recipient information from an NQI or a flow-through entity, the QI may not report the payments on a pooled basis for chapter 3 purposes. Instead, it must follow the same procedures as a U.S. withholding agent making a payment to an NQI or a flow-through entity. Example 13. QI, a qualified intermediary, pays U.S. source dividends to direct account holders that are foreign persons and beneficial owners. It also pays a part of the U.S. source dividends to two private arrangement intermediaries, PAI1 and PAI2. The PAIs pay the dividends they receive from QI to foreign persons that are beneficial owners and direct account holders of PAI1 or PAI2. All payees are exempt from chapter 4 withholding based on their respective chapter 4 statuses and the dividends paid are subject to a 15% rate of withholding. QI must file a Form 1042-S for the dividends paid to its own direct account holders that are beneficial owners. QI must also file two Forms 1042-S, one for the dividends paid to the direct account holders of each of PAI1 and PAI2. Each of the Forms 1042-S that QI files for payments made to PAI1 and PAI2 must contain the name and address of PAI1 or PAI2, recipient code 29 (PAI withholding rate pool—general) as the chapter 3 status code, and a blank chapter 4 status code, and should use chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) in box 4a.

# Amounts Paid by QIs to Certain Partnerships and Trusts

A QI that is applying the special pool reporting allowance provided in the QI agreement for certain partnerships or trusts (Agency Option) must file separate Forms 1042-S reflecting reporting pools for each partnership or trust that has provided reporting pool information in its withholding statement. A QDD cannot use the Agency Option. For purposes of chapter 4, a QI that is an FFI may use chapter 4 reporting pool code 47 to allocate payments made to the partnership's or trust's payees that are nonparticipating FFIs and should report the partnership or trust as the recipient on Form 1042-S. For chapter 3 purposes, if the payment is made directly by the partnership or trust to the recipient, the QI may use reporting pool code 31 (agency withholding rate pool—general) or 32 (agency withholding rate pool—exempt organization) as the chapter 3 status code (unless the QI is acting as a QDD with respect to the payment). However, to the extent required in the QI agreement, the QI must file separate Forms 1042-S for partners, beneficiaries, or owners of such partnership or trust that are indirect partners, beneficiaries, or owners, and for direct partners, beneficiaries, or owners of such partnership or trust that are intermediaries or flow-through entities.

# Recipient-by-Recipient Reporting by QIs

If a QI is not permitted to report on the basis of reporting pools, it must follow the same rules that apply to a U.S. withholding agent. For chapter 3 purposes, a QI may not report the following payments on a reporting pool basis, but rather must complete Form 1042-S for each appropriate recipient and must provide the applicable chapter 4 exemption code. Payments made by QIs to another QI, QDD, QSL, WP, or WT. The QI must complete a Form 1042-S treating the other QI, QDD (when a QI is acting as a QDD with respect to a payment), QSL, WP, or WT as the recipient. A QI must not treat a QI as a recipient, however, when the other QI is acting as a disclosing QI. See Payment to QI of PTP distributions or amounts realized, earlier, for information on reporting of PTP distributions and amounts realized paid to disclosing QIs. Payments made to an NQI (including an NQI that is an account holder of a PAI). For chapter 3 purposes, the QI must complete a Form 1042-S for each recipient who receives the payment from the NQI. A QI that is completing Form 1042-S for a recipient that receives a payment through an NQI must include in boxes 15a through 15m the name, country code, address, TIN (if any), GIIN (if any), and status codes of the NQI from whom the recipient directly receives the payment. In the case of an NQI that is a participating FFI or registered deemed-compliant FFI, the QI must complete a Form 1042-S for the chapter 4 withholding rate pool of the NQI provided in a withholding statement associated with its Form W-8IMY and must report the NQI as the recipient. In such a case, the QI must include the name and address of the NQI as the recipient and use chapter 4 pool reporting codes 42 through 48 as the chapter 4 status code, and chapter 3 status code 25 (nonqualified intermediary). If the NQI fails to provide sufficient allocation information with respect to a withholdable payment, the QI must complete a Form 1042-S with the recipient as "Unknown Recipient" using chapter 4 status code 29 (unknown recipient) and must include the NQI's information in boxes 15a through 15m. Example 14. QI, a qualified intermediary, has NQI, a nonqualified intermediary that is a participating FFI, as an account holder. NQI has two account holders, A and B, both recalcitrant account holders with U.S. indicia who receive a withholdable payment of U.S. source dividends from QI. NQI provides QI with a valid Form W-8IMY and a complete withholding statement that allocates the dividends paid to NQI to recalcitrant pool—U.S. indicia for both A and B. QI must complete one Form 1042-S reporting NQI as the recipient and using reporting pool code 43 (recalcitrant pool—U.S. indicia) as the chapter 4 status code. Example 15. QI has NQI, a nonqualified intermediary that is a reporting Model 2 FFI, as an account holder. NQI has two account holders, A and B, who receive a withholdable payment of U.S. source dividends from QI. A is a nonparticipating FFI. NQI treats B as a nonconsenting U.S. account under the applicable IGA and is not required to withhold on payments to B under chapter 4. NQI provides QI with a valid Form W-8IMY and a complete withholding statement that allocates 50% of the dividends paid to A and 50% to B. NQI designates B as an individual exempt from withholding under an IGA but cannot include B in a chapter 4 withholding rate pool of U.S. payees because the payment is subject to chapter 3 withholding and, under the presumption rules of Regulations section 1.1441-1(b)(3), the payment is presumed made to an unknown, undocumented foreign payee. QI must complete two Forms 1042-S. One Form 1042-S must show NQI as the recipient and use reporting pool code 47 (nonparticipating FFI pool). The second Form 1042-S must show the recipient as "Unknown Recipient," NQI's information in boxes 15a through 15m, chapter 4 exemption code 19 (exempt from withholding under IGA), chapter 4 status code 34 (nonconsenting U.S. account), chapter 3 status code 21 (unknown recipient), and 30% withholding under chapter 3 for the payment allocated to B as a presumed foreign person under chapter 3.

# Tip:

Payments made by QIs to a flow-through entity. The QI must complete a Form 1042-S for each recipient who receives the payment from the flow-through entity for purposes of chapters 3 and 4. A QI that is completing a Form 1042-S for a recipient that receives a payment through a flow-through entity must include in boxes 15a through 15m the name, country code, address, TIN (if any), GIIN (if any), and status codes of the flow-through entity from which the recipient directly receives the payment. For chapter 4 purposes and in the case of a flow-through entity that is a participating FFI or registered deemed-compliant FFI (other than a WP or WT), the QI must complete a Form 1042-S for each chapter 4 withholding rate pool provided in the withholding statement associated with the Form W-8IMY of the flow-through entity. The QI must include the name, address, and GIIN of the flow-through entity as the recipient and the applicable chapter 3 status code for the flow-through entity and use pooled reporting codes 42 through 48 as the chapter 4 status code. Example 16. QI, a qualified intermediary, has FP, a nonwithholding foreign partnership that is a registered deemed-compliant FFI, as an account holder. QI pays interest that is a withholdable payment described by income code 01 (interest paid by U.S. obligors—general) to FP. FP has three partners, A, B, and C, all of whom are exempt from withholding under chapter 4 based on their respective chapter 4 statuses. FP provides QI with a Form W-8IMY with which it associates the Forms W-8BEN from each of A, B, and C. In addition, FP provides a complete withholding statement in association with its Form W-8IMY that allocates the interest payments among A, B, and C. QI must file three Forms 1042-S, one each for A, B, and C. The Forms 1042-S must show information relating to FP in boxes 15a through 15m along with the chapters 3 and 4 status codes and chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) for A, B, and C. Tip: See section 8 of the 2023 QI agreement in Rev. Proc. 2022-43 for information on Form 1042-S reporting requirements when QIs make payments of PTP distributions or amounts realized, or when a QI acting as a QDD is a partnership required to report on Form 1042-S with respect to its foreign partners. For when a QI pays a PTP distribution or amount realized to a partner through more than one disclosing QI and the QI is required to issue a Form 1042-S under section 8 of the 2023 QI agreement to report the payment, see Payment to QI of PTP distributions or amounts realized, earlier, for the disclosing QI to which the QI is required to issue a recipient copy of Form 1042-S.

# Amounts Paid by WPs and WTs

In general. For chapter 4 purposes, payments that are made by a WP or WT that is a participating FFI or a registered deemed-compliant FFI directly to its partners, owners, or beneficiaries that are recalcitrant account holders, payees that are nonparticipating FFIs, and payees that are U.S. persons may be reported on the basis of chapter 4 reporting pools. A WP or WT may also use the chapter 4 pooled reporting codes to report payments allocable to account holders, payees, or owners of another participating FFI or registered deemed-compliant FFI that is an NQI, NWP, or NWT and provides its chapter 4 withholding rate pools on its withholding statement when the WP or WT applies section 9.03 of its agreement to such entity. In such case, the WP or WT must include the NQI, NWP, or NWT as the recipient in box 13a. If a WP or WT has not made a pooled reporting election for chapter 3 purposes, a WP or WT must file a separate Form 1042-S for each direct partner, beneficiary, or owner that is exempt from chapter 4 withholding and to whom the WP or WT distributes, or in whose distributive share is included, an amount subject to withholding under chapter 3, in the same manner as a U.S. withholding agent. However, if the WP or WT has made a pooled reporting election in its WP or WT agreement, the WP or WT may instead report payments to such direct partners, beneficiaries, or owners on the basis of chapter 3 reporting pools and file a separate Form 1042-S for each reporting pool. For payments not subject to chapter 4 withholding, a WP or WT may use a single chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) and a single chapter 3 reporting pool code 27 (withholding rate pool—general) as the chapter 3 status code for all chapter 3 reporting pools, except for amounts paid to foreign tax-exempt recipients for which a separate recipient code 28 must be used. For this purpose, a foreign tax-exempt recipient includes any organization that is not subject to withholding and is not liable to tax in its country of residence because it is a charitable organization, pension fund, or foreign government. See the WP and WT agreements for when a WP and WT can pool report payments to an indirect partner, a beneficiary, or an owner. See section 9 of the WP or WT agreement.

# Amounts Paid by NQIs and Flow-Through Entities

An NQI and a flow-through entity are withholding agents and must file Forms 1042-S for amounts paid to recipients. However, an NQI or a flow-through entity is not required to file Form 1042-S if it is not required to file Form 1042-S under the Multiple Withholding Agent Rule , later. An NQI or a flow-through entity may report payments made to recipients to the extent it has failed to provide to another withholding agent the appropriate documentation and complete withholding statement for either chapter 3 or 4 purposes or when an NQI receives a payment of an amount realized subject to section 1446(f) withholding from a broker that does not agree to report on Form 1042-S the NQI account holders receiving the payment. See the instructions for Form W-8IMY for the requirements for such an agreement. If the NQI or flow-through entity chooses to or must file Form 1042-S, as described above, the NQI or flow-through entity must also file Form 1042 and, if applicable, attach the Form 1042-S it received from the withholding agent to establish any credit for amounts withheld by the withholding agent. See the Instructions for Form 1042. If another withholding agent has withheld tax on an amount that should have been exempt (for example, where the withholding agent applied the presumption rules because it did not receive proper documentation or other required information from the NQI or flow-through entity), and the payee or beneficial owner will make a claim for refund, the NQI or flow-through entity must report on Form 1042-S the correct tax rate and the combined amount of U.S. federal tax withheld with respect to all recipients and should enter the applicable chapters 3 and 4 exemption codes. If another withholding agent underwithholds, regardless of whether it received proper documentation from the NQI or flow-through entity, the NQI or flow-through entity must withhold additional amounts to bring the total withholding to the correct amount. Tip: If an NQI receives an amount realized withheld on under section 1446(f), it may issue Forms 1042-S to report the payment and withholding even if the account holder is a U.S person.

# Specified Federal Procurement Payments Made to Foreign Persons

Section 5000C imposes a 2% tax on any foreign person that receives a specified federal procurement payment. A specified federal procurement payment is a payment made to a foreign person pursuant to a contract with the U.S. Government for (1) the provision of goods that are manufactured or produced in a country that does not have an international procurement agreement with the United States, or (2) the provision of services in a country that does not have an international procurement agreement with the United States. For purposes of section 5000C, a payer of a specified federal procurement payment to a foreign person must complete a Form 1042-S for payments withheld upon in the name of the foreign person. Use income code 44 to report payments subject to withholding under section 5000C. Box 2 should include the amount of the specified federal procurement payments subject to withholding, and box 7 should include the amount of tax withheld under section 5000C. If you are reporting tax withheld under section 5000C, enter "3" in box 3 as if the tax were a chapter 3 tax, enter "00" in box 3a, and report the tax withheld in box 7. You do not need to complete box 4a, box 4b, or any box for a chapter 3 or 4 status code. In boxes 13a through 13h, include the name and the address of the foreign person withheld upon. If known, include the TIN (if any) in box 13i.

# Multiple Withholding Agent Rule

A withholding agent is not required to file Form 1042-S if a return is filed by another withholding agent reporting the same amount and the withholding agent has withheld correctly. The multiple withholding agent rule does not relieve withholding agents from Form 1042-S reporting responsibility in the following circumstances. Any withholding agent making a payment to a QI, QSL, WP, or WT must report that payment as made to the QI, QSL, WP, or WT. Any withholding agent making a payment to a U.S. branch treated as a U.S. person must report the payment as made to that branch. Any withholding agent that withholds an amount from a payment under chapter 3 or 4 must report that amount to the recipient from whom it was withheld. Furthermore, the multiple withholding agent rule does not relieve the following from Form 1042-S reporting responsibility. Any QI, WP, or WT required to report an amount to a chapter 4 withholding rate pool or chapter 3 withholding rate pool. An NQI or a flow-through entity that knows, or has reason to know, that the correct amount has not been withheld by another withholding agent. Under the multiple withholding agent rule, a withholding agent reporting amounts withheld by another withholding agent must use box 8 (tax withheld by other agents) to report such amounts and must provide the name and EIN of the withholding agent that withheld in boxes 14a and 14b (Primary Withholding Agent's Name and EIN). See the instructions for boxes 14a and 14b, later. Example 17. NQI, a foreign bank that is a participating FFI, acts as a nonqualified intermediary for four different foreign persons (A, B, C, and D) who own securities from which they receive interest that is a withholdable payment. The interest is paid by a U.S. withholding agent (WA) as custodian of the securities for NQI. A, B, C, and D each own a 25% interest in the securities. NQI has furnished WA with a Form W-8IMY to which it certifies its status as a participating FFI and has attached Forms W-8BEN from A and B. NQI's Form W-8IMY contains an attachment stating that 25% of the securities are allocable to each of A and B and 50% to a pool of recalcitrant account holders with U.S. indicia. WA pays $100 of interest during the calendar year. WA treats the $25 of interest allocable to A and the $25 of interest allocable to B as portfolio interest and completes Forms 1042-S for A and for B as the recipients. WA includes information relating to NQI in boxes 15a through 15m on the Forms 1042-S for A and B. WA subjects the remaining $50 of interest to 30% withholding under chapter 4 and reports the interest on a Form 1042-S by treating NQI as the recipient in box 13a and uses chapter 3 status code 25 (nonqualified intermediary), chapter 4 status code 43 (recalcitrant pool—U.S. indicia), "30.00" in box 4b (chapter 4 tax rate), and $15 as the amount withheld in boxes 7 and 10. Under the multiple withholding agent rule, NQI is not required to file a Form 1042-S, but must file a Form 1042-S if, for example, C and D seek to make a claim for refund and NQI has not filed a collective refund claim on behalf of C and D for the tax withheld under chapter 4 on the payment (see Regulations section 1.1471-4(h)). Example 18. WA, a U.S. withholding agent, makes a $100 dividend payment that is a withholdable payment to a foreign bank (NQI) that is a participating FFI and acts as a nonqualified intermediary. NQI receives the payment on behalf of A, documented as a foreign individual exempt from chapter 4 withholding and a resident of a treaty country who is entitled to a 15% rate of withholding under chapter 3, and B, documented as a foreign individual exempt from chapter 4 withholding and a resident of a country that does not have a tax treaty with the United States and who is subject to 30% withholding under chapter 3. NQI provides WA with its Form W-8IMY that certifies its status as a participating FFI to which it associates the Forms W-8BEN from both A and B and a complete withholding statement that allocates 50% of the dividend to A and 50% to B. A's Form W-8BEN claims a 15% treaty rate of withholding. B's Form W-8BEN does not claim a reduced rate of withholding. WA, however, mistakenly withholds only 15%, $15, from the entire $100 payment. WA completes a Form 1042-S for each A and B as the recipients, showing on each form $50 of dividends in box 2, a withholding rate of "15.00" in box 3b (chapter 3 tax rate), and $7.50 as the amount withheld in boxes 7 and 10. Under the multiple withholding agent rule, NQI is not required to file a Form 1042-S for A. However, because NQI knows (or should know) that B is subject to a 30% rate of withholding, and assuming it knows that WA only withheld 15%, the multiple withholding agent rule does not apply to the dividend paid to B, and NQI must withhold an additional 15% from the payment to B. NQI must then file a Form 1042-S for B showing $50 of dividends in box 2, "00" in box 3a (chapter 3 exemption code), "30.00" in box 3b (the correct chapter 3 tax rate), $7.50 withheld by NQI in box 7, $7.50 withheld by WA in box 8, and $15 in box 10 (the combined amount withheld). NQI must also enter chapter 4 exemption code 15 (payee not subject to chapter 4 withholding) in box 4a and "00.00" in box 4b (chapter 4 tax rate). See the instructions for box 3b, later.

# Penalties

The following penalties apply to the person required to file Form 1042-S. The penalties apply to both paper filers and electronic filers. Late filing of correct Form 1042-S. A penalty may be imposed for failure to file each correct and complete Form 1042-S when due (including extensions), unless you can show that the failure was due to reasonable cause and not willful neglect. The penalty, based on when you file a correct Form 1042-S, is the following. $60 per Form 1042-S if you correctly file within 30 days after the required filing date; the maximum penalty is $698,500 per year ($244,500 for a small business). A small business, for this purpose, is defined as having average annual gross receipts of $5 million or less for the 3 most recent tax years (or for the period of its existence, if shorter) ending before the calendar year in which the Forms 1042-S are due. $130 per Form 1042-S if you correctly file more than 30 days after the due date but by August 1; the maximum penalty is $2,095,500 per year ($698,500 for a small business). $340 per Form 1042-S if you file after August 1 or you do not file correct Forms 1042-S; the maximum penalty is $4,191,500 per year ($1,397,000 for a small business). If you intentionally disregard the requirement to report correct information, the penalty per Form 1042-S is increased to the greater of $690 or 10% of the total amount of items required to be reported, with no maximum penalty. Failure to furnish correct Form 1042-S to recipient. If you fail to provide Forms 1042-S to recipients and cannot show reasonable cause, a penalty of up to $340 may be imposed for each failure to furnish Form 1042-S to the recipient when due. The penalty may also be imposed for failure to include all required information or for furnishing incorrect information on Form 1042-S. The maximum penalty is $4,191,500 ($1,397,000 for a small business) for all failures to furnish correct recipient statements during a calendar year. If you provide the correct statement on or before August 1, reduced penalties similar to those for failing to file a correct Form 1042-S with the IRS may be imposed. See Late filing of correct Form 1042-S , earlier. If you intentionally disregard the requirement to report correct information, each $340 penalty is increased to the greater of $690 or 10% of the total amount of items required to be reported, with no maximum penalty. Failure to file electronically. If you are required to file electronically but fail to do so, and you do not have an approved waiver on record, penalties may apply unless you establish reasonable cause for your failure.

# Avoid Common Errors

To ensure that your Forms 1042-S can be correctly processed, be sure that you do the following. Carefully read the information provided in Pub. 515 and these instructions. Complete all required fields. At a minimum, you must provide your unique form identifier at the top of the form as well as the information requested in boxes 1, 2, 3, 7a, 12a through 12m, and 13a through 13h. Other boxes must be completed if the nature of the payment requires it. If the amount reported in box 2 is a withholdable payment, you must also enter information in boxes 4a, 4b, and 13k. If the amount reported in box 2 is an amount subject to chapter 3 withholding, you must enter information in boxes 3a, 3b, and 13j. If the amount reported in box 2 is not subject to chapter 4 withholding or is not a withholdable payment, you must enter "00.00" in box 4b and provide the applicable exemption code in box 4a. If the amount reported in box 2 is a withholdable payment and an amount subject to chapter 3 withholding and the tax rate in box 4b is 00.00, you must enter information in boxes 3a and 3b. If the rate entered in box 4b is 30.00, you may enter information in boxes 3a and 3b. If you are a QI, WP, or WT that is pool reporting for its direct account holders only, either a chapter 3 status code (box 13j) or chapter 4 status code (box 13k) is required. If the recipient in box 13 or the entity in box 15 is a participating FFI, registered deemed-compliant FFI, sponsored FFI, direct reporting NFFE, or sponsored direct reporting NFFE, you must enter the entity's GIIN or the GIIN of the sponsoring entity in box 13l or 15e (to the extent that you may rely on a sponsored entity's GIIN under the chapter 4 regulations or an applicable IGA for withholding purposes). Use only income, status, and exemption codes specifically listed in these instructions. Use only tax rates that are allowed by statute, regulations, or treaty. Do not attempt to "blend" rates. Instead, if necessary, submit multiple Forms 1042-S to show changes in tax rate. See the Valid Tax Rate Table. All information you enter when reporting the payment must correctly reflect the intent of the statute and regulations. In most cases, you should rely on the withholding documentation you have collected (Form W-8 series, Form 8233, etc.) to complete your Form 1042-S submissions. Also, note the following. Note: If you use exemption code 04 (exempt or reduced withholding under tax treaty), the country code that you report in box 13b must be a valid treaty country. Countries with which the United States has a tax treaty are listed at IRS.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties-A-to-Z. The gross income you report in box 2 cannot be zero (unless amending Form 1042-S to zero out gross income previously reported). The income code you report in box 1 must correctly reflect the type of income you pay to the recipient. The withholding agent's name, address, chapters 3 and 4 status codes, EIN, QI-EIN, WP-EIN, WT-EIN, and GIIN (if any) must be reported in boxes 12a through 12m. The recipient's name, country code, address, U.S. TIN (if any), and GIIN (if any) must be reported in boxes 13a through 13i and 13l. In most cases, you must report a foreign address. See the instructions for box 13, later. In the case of joint owners, Form 1042-S can only list one of the owners as the recipient in box 13a. Form 1042-S must not be completed with more than one of the joint owners as the recipient. For direct account holders, you must report the recipient's account number in box 13o. You may also be required to report the recipient's FTIN in box 13m, a limitation on benefits (LOB) code (for an entity claiming treaty benefits) in box 13n, and the recipient's date of birth in box 13p (see the instructions for box 13n and box 13p, later). The exemption code you report in box 3a must correctly identify the proper tax status for the type of income you pay to the recipient. The exemption code you report in box 4a must correctly identify the proper tax status for the type of income you pay to the recipient or if exemption code 15 is used (payee not subject to chapter 4 withholding), the chapter 4 status code of the recipient must correctly reflect this exemption. When reporting to Unknown Recipients, ensure that 30% tax is withheld for amounts subject to chapter 3 or 4 withholding, remitted to the IRS, and correctly reported on Form 1042-S. In such cases, the recipient's name should be "Unknown Recipient". The recipient's chapter 3 and 4 status codes should also reflect "Unknown Recipient", and the recipient country should be left blank. Do not use country code "UC" to indicate unknown country. Only use country code "UC" when the recipient country is Curacao. Foreign source income is generally not required to be reported on Form 1042-S. As a result, exemption code 03 (income is not from U.S. sources) should be used for reporting income only in limited circumstances (for example, when withholding is applied in error). See Regulations section 1.1461-1(c)(2) for when reporting on Form 1042-S is required. Caution: You, the withholding agent, are liable for the tax if you know, or should have known, that underwithholding on a payment has occurred.

# Rounding Off to Whole Dollars

You must round off cents to whole dollars. To round off amounts to the nearest whole dollar, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3. If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding and only round off the total.

# Unique Form Identifier

A withholding agent must provide a unique form identifier on each Form 1042-S that it files in the box provided at the top of the form. The unique form identifier must: Be numeric (for example, 1234567891), Be exactly 10 digits, and Not be the recipient's U.S. TIN or FTIN. If a withholding agent is filing an amended Form 1042-S, it must include the same unique form identifier that was reported by the withholding agent on the original Form 1042-S that is being amended. The unique form identifier will be used to identify which information return is being corrected or amended when multiple information returns are filed by a withholding agent with respect to the same recipient. The identifying number must be unique to each original Form 1042‐S filed for the current year. The identifying number can be used on a new original form in a subsequent year.

# Amended Checkbox

See Amended Forms, later.

# Amendment Number

If you are filing an amended Form 1042-S, you must provide an amendment number. The amendment number must be numeric and the length must be exactly one digit. Each time that you amend the same form (as determined by the unique form identifier), you must provide the amendment number in the box provided on the form (using "1" for the first amendment and increasing sequentially for each subsequent amendment).

# Box 1—Income Code

All filers must enter the appropriate two-digit income code from the list in Appendix A, later. Use the income code that is the most specific. See Pub. 515 for further explanation of the income codes. Below are examples on how to use some of the income codes. Note: For tax year 2026, the use of income codes 59, 60, and 61 is optional. Use code 06 for dividends, including any deemed dividends (such as deemed dividends arising under section 305(c)). However, use other codes for dividends (including deemed dividends) paid on actively traded securities and for dividend equivalents. Use code 09 for the following types of capital gain. Gains on disposal of timber, coal, or domestic iron ore with a retained economic interest, unless an election is made to treat those gains as income effectively connected with a U.S. trade or business. Gains on contingent payments received from the sale or exchange after October 4, 1966, of patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and other like property. Gains on certain transfers of all substantial rights to, or an undivided interest in, patents if the transfers were made before October 5, 1966. Certain gains from the sale or exchange of OID obligations issued after March 31, 1972. Use code 17 for payments for independent personal services performed by a foreign person (including payments made to an entity). This includes payments that are subject to the business profits article of a treaty. Use code 29 (deposit interest) if you are paying bank deposit interest, not code 01 (interest paid by U.S. obligors—general). Use code 24 (qualified investment entity (QIE) distributions of capital gains) for distributions of capital gains from a QIE. Use code 36 (capital gains distributions) for capital gain distributions (dividends) paid or credited by mutual funds (or other RICs). Include long-term and short-term capital gain dividends (use exemption code 02 (exempt or reduced withholding under IRC) in box 3a). Note: Exempt-interest dividends and interest-related dividends should be reported under income code 01 (interest paid by U.S. obligors—general) (use exemption code 02 (exempt or reduced withholding under IRC) in box 3a). Use code 28 for gambling winnings. These are proceeds from a game other than blackjack, baccarat, craps, roulette, or big-6 wheel. For more information, see Pub. 515. Use code 33, 34, 35, 53, or 54 for all substitute payment transactions. For more information, see Regulations sections 1.861-2(a)(7) and 1.861-3(a)(6). For payments of interest or substitute interest made by a withholding agent to a QI that assumes primary withholding responsibilities for substitute interest, the withholding agent and the QI should use code 33 or 54. For payments of substitute dividends, a withholding agent should use code 34 or 53. See Rev. Proc. 2022-43 for more information on when a QI assumes primary withholding responsibilities for substitute interest or dividend equivalents. Use code 37 (return of capital) for a nondividend distribution. This is a distribution that is not paid out of the earnings and profits of a corporation. It represents a distribution in part or full payment in exchange for stock. Use codes 38 and 39 for payments to covered expatriates. Use code 38 for a payment of eligible deferred compensation subject to section 877A(d)(1) and use code 39 for a distribution from a nongrantor trust subject to section 877A(f)(1). For more information, see Notice 2009-85, 2009-45 I.R.B. 598, available at IRS.gov/irb/2009-45_IRB#NOT-2009-85. There are three categories of dividend equivalent codes. For substitute dividends, use code 34 or 53. See example 7 of this list for additional instructions related to substitute dividends. For dividend equivalents with respect to a transaction that is a section 871(m) transaction as a result of combining transactions under Regulations section 1.871-15(n) (including as modified by transition relief under Notice 2024-44, when applicable) (a "combined transaction"), use code 56 (dividend equivalents under IRC section 871(m) as a result of applying the combined transaction rules). For all other dividend equivalents, use code 40 (other dividend equivalents under IRC section 871(m)). Use code 41 (guarantee of indebtedness) for certain guarantee of indebtedness payments. These are amounts paid for the provision of a guarantee of indebtedness that was issued after September 27, 2010. Use either code 42 (earnings as an artist or athlete—no central withholding agreement) or 43 (earnings as an artist or athlete—central withholding agreement) for payments to an artist or athlete. A central withholding agreement is Form 13930, Application for Central Withholding Agreement, plus additional information specified in the instructions for such form, that is entered into by the artist or athlete, a designated withholding agent, and the IRS. For more details, see Pub. 515. Use code 50 (income previously reported under escrow procedure) with respect to a recalcitrant account holder of a dormant account for which a participating FFI reported the income on Form 1042-S in a prior calendar year but for which the participating FFI was not required to deposit the tax withheld or determined that withholding was not required until the current calendar year under an applicable escrow procedure. For additional information on the escrow procedure for dormant accounts, see Regulations section 1.1471-4(b)(6). Also use code 50 for income reported on a Form 1042-S in a prior calendar year for which tax withheld was not deposited pursuant to the escrow procedure for undetermined amounts of income and such withheld tax is now required to be deposited in the current calendar year. For additional information on the escrow procedure for undetermined amounts of income, see Regulations section 1.1441-3(d)(1). For instructions on reporting amounts withheld during the current calendar year that you are not depositing pursuant to the escrow procedure, see the instructions for box 7, later. Use code 52 (dividends paid on certain actively traded or publicly offered securities), 53 (substitute payments—dividends from certain actively traded or publicly offered securities), 51 (interest paid on certain actively traded or publicly offered securities), 54 (substitute payments—interest from certain actively traded or publicly offered securities), and 13 (royalties paid on certain publicly offered securities) if the income paid is described in Regulations section 1.1441-6(c)(2) and you have reduced the rate of withholding under an income tax treaty without the recipient providing a U.S. TIN or an FTIN. See codes 40 and 56 for dividend equivalents other than substitute dividends and example 10 of this list for additional information. Use code 55 (taxable death benefits on life insurance contracts) to report taxable death benefits, such as benefits paid on an insurance contract that was acquired on a transfer for valuable consideration. See section 101 for when death benefits are taxable. Use income code 57 to report an amount realized under section 1446(f) (regardless of whether paid on a sale or PTP distribution). Use income code 58 to the extent you cannot determine the income attributable to a PTP distribution and apply Regulations section 1.1446-4(d)(1) to determine the withholding absent a qualified notice indicating the amount. Use income code 59 (consent fees), 60 (loan syndication fees), or 61 (settlement payments) for payments described by one of those codes that a withholding agent concludes does not fit under another income code, excluding code 23 (other income). Income code 23 (other income) should be used only to report U.S. source FDAP income that is not reportable under any other available income code. If you paid more than one type of income to or on behalf of the same recipient, you must complete a separate Form 1042-S for each income type. Note: Although income codes are provided for short-term OID and notional principal contract income, those items are not always subject to reporting on Form 1042-S. For example, short-term OID may need to be reported by an NQI or a flow-through entity if those amounts are paid to foreign persons and another withholding agent backup withheld on those amounts under the presumption rules. Notional principal contract income is reportable if it is effectively connected with the conduct of a trade or business in the United States or results in the payment of interest under Regulations section 1.446-3(g)(4) or a dividend equivalent under section 871(m) and the regulations thereunder (for which a Form 1042-S is required). For more information, see the regulations under chapter 3 and Pub. 515.

# Box 2—Gross Income

For each income type, enter the gross amount you paid (in whole dollars) to or on behalf of the recipient during the calendar year, including withheld tax. See, however, the instructions for boxes 16a through 16e, later, for when you must issue a separate Form 1042-S (or several Forms 1042-S) for income attributable to a PTP distribution. The following other special procedures apply to the reporting of gross income. You must report the entire amount of a corporate distribution made with respect to stock even if you elect to reduce the amount of withholding on the distribution because all or a part of the distribution is nontaxable or represents a capital gain dividend. You must report the entire amount of a payment if you do not know at the time of payment the amount that is subject to withholding because the determination of the source of the income or the calculation of the amount of income subject to tax depends upon facts that are not known at the time of payment. If you applied the escrow procedure under chapters 3 and 4, report the entire amount of a payment that you previously reported in a prior calendar year for which you withheld tax but did not deposit such tax under the escrow procedure if the liability is due in the current calendar year. You must report the entire amount of gains relating to the disposal of timber, coal, or domestic iron ore with a retained economic interest, and gains relating to contingent payments received from the sale or exchange of patents, copyrights, and similar intangible property. You must report only the amount of cash paid on notional principal contracts. If reporting payments to artists or athletes who have signed a central withholding agreement (income code 43), you must report the gross amount paid to the artist or athlete in box 2 (without any consideration to the expenses to be taken into account for purposes of determining the amount of withholding tax pursuant to the central withholding agreement). You must report the entire amount of any dividend equivalent as determined under Regulations sections 1.871-15(i) and (j).

# Box 3

Chapter indicator. If you are reporting amounts in boxes 7 through 9, enter either "3" or "4" to indicate whether the amounts were withheld (or paid by the withholding agent) pursuant to chapter 3 or chapter 4. If you are reporting tax withheld under section 5000C, or backup withholding was applied under the presumption rules, enter "3" as if the tax were a chapter 3 tax. Note: Either "3" or "4" (but not both) must be entered on each Form 1042-S. If you are not reporting amounts in boxes 7 through 9 because you did not withhold under chapter 3 or 4, you should enter "3." If you are reporting payments to U.S. payees, enter "3" and leave boxes 3a and 3b blank. Caution: If you submit Form 1042-S as described above, you must also submit Form 1042 and issue a Form 1042-S to each recipient (including any unknown recipient or U.S. payee) of the income to which withholding was applied. Special instructions for use of chapter 3 exemption codes. If an amount was withheld under chapter 4, you may also include a chapter 3 exemption code and tax rate in boxes 3a and 3b to show the rate that would otherwise apply as if the payment had been later determined to be exempt from withholding under chapter 4. This may be done, for example, to assist the beneficial owner in pursuing a claim for refund. In such a case, enter "4" as the chapter indicator in box 3 to show that withholding was applied under chapter 4.

# Boxes 3a and 4a—Chapter 3 and Chapter 4 Exemption Codes

The applicable chapter 3 or 4 exemption code (01 through 24) from Appendix B, later, may be required to be entered if: The tax rate you entered in box 3b is applied at a reduced rate or if the payment is exempt from withholding, or The tax rate you entered in box 4b is 00.00. In certain cases, more than one exemption code will apply. See the instructions below for the applicable codes to determine which code to use. If an amount was withheld under chapter 4 (the tax rate you entered in box 4b is greater than zero and is not due to backup withholding), enter "00" in box 4a. If the tax rate you entered in box 4b is 00.00, you must enter the applicable exemption code (13 through 21) in box 4a. If an amount was withheld under chapter 3 (the tax rate you entered in box 3b is 30.00 and is not due to backup withholding), enter "00" in box 3a. If the tax rate you entered in box 3b is due to backup withholding, leave box 3a blank. If chapter 3 exemption code 01 or chapter 4 exemption code 14 (effectively connected income) applies, you must enter the recipient's U.S. TIN in box 13i if you report the income as effectively connected with a U.S. trade or business. If the recipient's U.S. TIN is unknown or unavailable, you must withhold tax at the rate of 30% (30.00) and enter "00" in boxes 3a and 4a.

# Chapter 3 Exemption Codes

Note: A withholding agent should use the chapter 3 exemption code that most closely applies. A withholding agent should use chapter 3 exemption code 02 (exempt or reduced withholding under IRC) only if none of the other chapter 3 exemption codes apply. A withholding agent should use exemption code 04 (exempt or reduced withholding under tax treaty) only if withholding at a reduced rate of withholding or if income is exempt from withholding pursuant to an income tax treaty. Note that if reporting exemption code 04, the country code entered in box 13b must be a country with which the United States has entered into an income tax treaty. A withholding agent should use exemption code 06 (QI that assumes primary withholding responsibility) only if it is making a payment to a QI that has represented on its Form W-8IMY that it is assuming primary withholding responsibility under chapters 3 and 4. However, if the payment is made to a QI that is acting as a QDD with respect to the payment, the withholding agent should instead use exemption code 22 (QDD that assumes primary withholding responsibility). A withholding agent should use exemption code 07 (withholding foreign partnership or withholding foreign trust) only if it is making a payment to a foreign partnership or trust that has represented on its Form W-8IMY that it is a WP or WT. A withholding agent should use exemption code 08 (U.S. branch treated as U.S. person) for chapter 3 purposes only if it is making a payment to a U.S. branch or to a territory FI and it has represented on its Form W-8IMY that it agrees to be treated as a U.S. person. A withholding agent should use exemption code 10 (QI represents that income is exempt) for chapter 3 purposes only if it makes a payment to a QI that has not assumed primary withholding responsibility under chapters 3 and 4 or primary backup withholding responsibility, but has represented on a withholding statement associated with its Form W-8IMY that the income is exempt from withholding. A withholding agent should use exemption code 11 (QSL that assumes primary withholding responsibility) for chapter 3 purposes only if the withholding agent makes a substitute dividend payment to a financial institution (including a QI) that represented on its Form W-8IMY that it is acting as a QSL for the account associated with the form. A withholding agent should use exemption code 12 (payee subjected to chapter 4 withholding) for chapter 3 purposes if the recipient has been withheld upon under chapter 4 and thus chapter 3 withholding does not apply. When reporting a payment subject to chapter 4 withholding, ensure that 30% tax is withheld, remitted to the IRS, and correctly reported on Form 1042-S. See Special instructions for use of chapter 3 exemption codes , later. A withholding agent should use chapter 3 exemption code 23 for distributions made by a QIE to a qualified foreign pension fund (or an entity all of the interests of which are held by a qualified foreign pension fund) that are exempt under section 897(l). A withholding agent should use chapter 3 exemption code 24 for income paid to a foreign government or an international organization that is exempt under section 892.

# Chapter 4 Exemption Codes

A withholding agent should use exemption code 13 (grandfathered payment) for chapter 4 purposes only if the withholding agent makes a payment under a grandfathered obligation (as defined in Regulations section 1.1471-2(b)(2)) and exemption code 13 is the only exemption code that applies. If another exemption code applies, it should be used instead of exemption code 13. A withholding agent should use exemption code 15 (payee not subject to chapter 4 withholding) for chapter 4 purposes if the payment is a withholdable payment (as defined in Regulations section 1.1473-1(a)) but has not been withheld upon under chapter 4 because of the payee's chapter 4 status. Also, use exemption code 15 if the withholding agent applies the 90-day grace period for a withholdable payment following a change in circumstances. A withholding agent should use exemption code 16 (excluded nonfinancial payment) for chapter 4 purposes for payments described in Regulations section 1.1473-1(a)(4)(iii). However, the withholding agent should only use exemption code 16 if it is the only exemption code that applies. If another exemption code applies, it should be used instead of exemption code 16. A withholding agent should use exemption code 17 (foreign entity that assumes primary withholding responsibility) for chapter 4 purposes only if it makes a payment to a QI that assumes primary withholding responsibility, a WP, or a WT. A withholding agent should use exemption code 18 (U.S. payees of participating FFI or registered deemed-compliant FFI) for chapter 4 purposes only if it makes a payment to a participating FFI or registered deemed-compliant FFI and only to the extent represented on such FFI's withholding statement associated with its Form W-8IMY that the payment is allocable to a chapter 4 withholding rate pool of U.S. payees and the FFI certifies on its withholding certificate that the FFI meets the requirements to include the account holder in a withholding rate pool of U.S. payees. A withholding agent should use exemption code 20 (dormant account) for chapter 4 purposes only if it makes a withholdable payment to a participating FFI or registered deemed-compliant FFI that represented on its withholding statement associated with its Form W-8IMY that the payment is allocable to a dormant account holder for which the escrow procedure of Regulations section 1.1471-4(b)(6) applies. A withholding agent should use exemption code 21 (other payment not subject to chapter 4 withholding) for chapter 4 purposes if the payment is exempt from chapter 4 withholding and no other chapter 4 exemption code applies. A withholding agent should also use exemption code 21 when using income code 37 (return of capital) to report nondividend payments. If you have failed to provide a withholding agent with appropriate information regarding the status of the person to whom you are making a payment, the other withholding agent may be required to withhold on the payment based on the presumption rules. If the income is in fact exempt from withholding or subject to a reduced rate of withholding, and the account holder requests a corrected form, you must submit a Form 1042-S providing the correct information. In this situation, you must: Indicate the correct rate of withholding that should have been applied to the income in boxes 3b or 4b; Enter the appropriate exemption codes, if any, in boxes 3a and 4a; Enter the actual amount of U.S. federal tax withheld by the other withholding agent in box 8; Provide the name and address of the actual recipient in boxes 13a through 13h along with the other required information for the recipient; Provide the name and EIN of the other withholding agent that actually withheld and deposited the tax (primary withholding agent) in boxes 14a and 14b; and Report the account holder's U.S. TIN, if provided.

# Boxes 3b and 4b—Chapter 3 and Chapter 4 Tax Rates

Enter the correct rate of withholding that applies to the income in box 2 (gross income) or box 6 (net income), as appropriate. In the case of a payment subject to chapter 4 withholding, the correct rate of withholding is "30.00." If the amount reported in box 2 is not subject to chapter 4 withholding or is not a withholdable payment, you must enter "00.00" in box 4b and provide the applicable exemption code in box 4a. For purposes of chapter 3 withholding, see Valid Tax Rate Table. The correct tax rate should be included even if you withheld at a different rate. For example, if an NQI that is a participating FFI is reporting dividends paid to a beneficial owner who is exempt from withholding under chapter 4 and a resident of a country with which the United States does not have a tax treaty and a U.S. withholding agent paid the dividend and incorrectly withheld only 15% under chapter 3 (rather than the required 30%) and the NQI withholds an additional 15% under chapter 3, the NQI should report "30.00" in box 3b. See Example 18, earlier, under Multiple Withholding Agent Rule . The tax rate on dividends paid to a corporation created or organized in, or under the law of, the Commonwealth of Puerto Rico may be 10%, rather than 30%. See Pub. 515 for more information. In the case of a specified federal procurement payment subject to section 5000C withholding, the correct rate of withholding is 2% or "02.00." For Form 1042-S purposes, report tax withheld under section 5000C in box 3b as if the tax were a chapter 3 tax. Enter the tax rate using the following format: two digits, a decimal point, and two digits (for example, "30.00" for 30%). However, if the income is exempt from tax under a U.S. tax treaty or the Internal Revenue Code, enter "00.00." If the tax rate is less than 10%, enter a zero before the tax rate (for example, "04.00" for 4%). Caution: If you withheld at more than one tax rate for a specific type of income that you paid to the same recipient, you must file a separate Form 1042-S for each amount to which a separate rate was applied. Valid Tax Rate Table 00.00 10.00 24.00 02.00 12.00 25.00 04.00 12.50 27.50 04.90 14.00 28.00 04.95 15.00 30.00 05.00 17.50 37.00 07.00 20.00 08.00 21.00 Exception for central withholding agreements. If you are the designated withholding agent who has entered into a central withholding agreement and you report an amount in box 2 using income code 43 (earnings as an artist or athlete—central withholding agreement), you must enter a tax rate in box 3b and you must include chapter 4 exemption code 16 (excluded nonfinancial payment) in box 4a.

# Box 5—Withholding Allowance

This box should be completed only if the income code reported in box 1 is 16 (scholarship or fellowship grants), 17 (compensation for independent personal services), 18 (compensation for dependent personal services), 19 (compensation for teaching), 20 (compensation during studying and training), or 42 (earnings as an artist or athlete—no central withholding agreement), and there is a valid treaty claim that provides an exemption from withholding up to a specific amount. Report the amount exempt from withholding here. This box should not be used for reporting a personal exemption. If you are a designated withholding agent that has entered into a central withholding agreement with the IRS, leave this box blank and report the gross amount paid to the recipient in box 2. See Pub. 515 for more information.

# Box 6—Net Income

Complete this box only if you entered an amount in box 5. Otherwise, leave it blank.

# Boxes 7a Through 11—Federal Tax Withheld

Box 7b. A withholding agent that withheld tax during the calendar year and that was not required to deposit with the IRS the tax withheld during the calendar year pursuant to the escrow procedure under Regulations sections 1.1471-2(a)(5)(ii) and/or 1.1441-3(d) must check box 7b. A withholding agent reporting payments pursuant to the escrow procedure must report such payments on separate Forms 1042-S. Box 7b must only be checked when using the escrow procedures as specified above. If you are a participating FFI or registered deemed-compliant FFI that, for chapter 4 purposes, applied the escrow procedure for dormant accounts, if the payment is also an amount subject to chapter 3 withholding and tax is withheld and deposited under chapter 3, do not check box 7b. Instead, enter "3" in box 3 and complete box 3b to report the tax withheld under chapter 3. Box 7c. Check box 7c if you are a partnership that received an amount subject to withholding during the 2026 calendar year (preceding year) and you are withholding on the amount includible in a foreign partner's share after March 15 of the subsequent year (2027). Only check this box if you designated the deposit as attributable to the preceding year (2026). In such a case, the partnership will be required to report the associated income and tax withheld on Forms 1042 and 1042-S for the preceding year. If a partnership withholds on a foreign partner's share of income after March 15 of the subsequent year, the due date for filing and furnishing the applicable Form(s) 1042-S is September 15 of the subsequent year (2027). For example, if a partnership withholds on April 1, 2027, with respect to a foreign partner's share of undistributed income for the 2026 calendar year, the partnership may designate the deposit as made for 2026 and report the liability and tax withheld on the 2026 Form 1042 and the 2026 Form 1042-S for the partner. The partnership must also ensure that its chapter 3 status code on such forms properly reflects its status as a partnership (including as a WP). The extended deadline of September 15, 2026, is also applicable when a partnership is reporting on Form 1042-S an allocation of income made after March 15 of the subsequent year to a foreign partner for the prior year, but no withholding is required on the income. In such a case, box 7c must also be checked even if there is no withholding. For more information, see proposed regulations issued on December 18, 2018 (REG-132881-17). Box 8. If you are a withholding agent filing a Form 1042-S to report income that has already been subject to withholding by another withholding agent, enter the amount actually withheld by the other agent(s) in box 8. However, a withholding agent (including a QSL) may not claim in box 8 a credit for prior withholding by another withholding agent on substitute dividends paid in a series of stock loans or stock repurchase agreements. See FAQ 26 under the General compliance section of FATCA - FAQs general. Box 9—Overwithheld tax repaid to recipient pursuant to adjustment procedures. This box should be completed only if you repaid a recipient under the reimbursement or set-off procedure during the 2027 calendar year in accordance with the requirements of Regulations section 1.1461-2(a)(2) or (3) (for withholding under chapter 3), or Regulations section 1.1474-2(a)(3) or (4) (for withholding under chapter 4). If you repaid the recipient under the reimbursement or set-off procedure during the 2026 calendar year, do not complete box 9. Instead, reduce the amount of withholding reported in box 7a. In most cases, an intermediary or a flow-through entity should not enter an amount in box 9 unless it is a QI that represented on its Form W-8IMY that it is assuming primary withholding responsibility or is a WP or WT. Caution: The adjustment for amounts overwithheld applies to partnerships, brokers, or nominees required to withhold under sections 1446(a) and (f) starting in 2023. Note: If the withholding agent meets the above requirements, the withholding agent may make adjustments to overwithholding using either the reimbursement or set-off procedure until the extended due date for filing Form 1042-S (or, if earlier, the date on which the Form 1042-S is either filed or furnished). Additionally, a withholding agent may use the extended due date for filing a Form 1042 to claim a credit for any adjustments made to overwithholding. Box 11—Tax paid by withholding agent (amounts not withheld). Enter the total amount of tax paid by you and not withheld from the payment to the recipient. The amounts reported in box 11 should be the amounts paid by the withholding agent from its own funds rather than through withholding from the payment to the recipient. Any amount reported in this box must not be included in box 10.

# Caution:

Box 7a. Enter the total amount of U.S. federal tax you actually withheld in box 7a under chapter 3 or 4. If you did not withhold any tax, enter "-0-." Caution: Box 7a must be completed in all cases, even if no tax has been deposited.

# Note:

Box 7d. Check this box only if you are a QI, WP, or WT that originally filed a Form 1042-S to report an amount subject to withholding in a withholding rate pool and you are revising the amounts reported to report to a specific recipient in accordance with the provisions of the QI agreement (Rev. Proc. 2022-43)or the WP/WT agreement (Rev. Proc. 2017-21). Note: This box should be checked on both the new Form 1042-S that is issued to a specific recipient and the amended Form 1042-S that is filed to revise the amounts reported to a withholding rate pool. Note: When filing Forms 1042-S to revise reporting to withholding rate pools and report to a specific recipient after a Form 1042 has been filed, the Form 1042 must be amended to reflect the changes to the total Forms 1042-S filed on lines 61a or 61b.

# Caution:

Box 10. Enter in box 10 the combined amounts reported in box 7a (federal tax withheld), box 8 (tax withheld by other agents), and box 9 (overwithheld tax repaid to recipient pursuant to adjustment procedures). Example. If the box 7a amount is $600, the box 8 amount is $120, and the box 9 amount is ($50), the box 10 amount will equal $670. Caution: Box 10 must be completed in all cases, even if no tax has been deposited.

# Box 12a—Withholding Agent's EIN

You are required to enter your EIN. However, if you are filing Form 1042-S as a QI, WP, or WT, enter your QI-EIN, WP-EIN, or WT-EIN. The withholding agent's EIN cannot be truncated. If you don't have an EIN, you may apply for one online by going to IRS.gov/EIN. If you are outside the United States, you may also apply for an EIN by calling 267-941-1099 (not a toll-free number). You may also apply for an EIN by faxing or mailing Form SS-4 to the IRS. File amended Forms 1042-S when you receive your EIN. To get a QI-EIN, WP-EIN, or WT-EIN, submit Form SS-4 with your application for that status. (See the definitions for qualified intermediary (QI) and withholding foreign partnership (WP) or withholding foreign trust (WT) under Definitions , earlier, for more information.)

# Boxes 12b and 12c—Withholding Agent's Chapter 3 and Chapter 4 Status Codes

Enter the withholding agent status code(s) from the list of Recipient Status Codes in Appendix B, later. You must enter both a chapter 3 and a chapter 4 withholding agent status code regardless of the type of payment being made. If you are a U.S. financial institution, indicate your chapter 4 status code as 01, except when a foreign branch of a U.S. financial institution issues Form 1042-S (in such a case, indicate the chapter 4 status code as 50). Note: Withholding agents that are U.S. governmental entities or U.S. tax-exempt entities, including colleges and universities, and other U.S. tax-exempt entities under the Internal Revenue Code other than under section 501(c), may use chapter 3 status code 41 (U.S. government entity or tax exempt entity (other than section 501(c) entities)) for box 12b. Note: A withholding agent should in general select the chapter 3 status code that most closely applies with its status based on the available codes. For example, if a U.S. financial institution (which checks chapter 4 status code 01, as such, unless it is a foreign branch) is a corporation, it should use chapter 3 status code 15 (corporation). Note: A withholding agent that is a partnership and is reporting allocations of QDD items to its partners should use chapter 3 status code 40 (partnership QDD).

# Boxes 12d Through 12m—Withholding Agent's Name, GIIN, Country Code, FTIN (if any), and Address

Enter your name and address in the appropriate boxes. If your post office does not deliver mail to the street address and you have a P.O. box, show the box number instead of the street address. Note: On statements furnished to individual recipients of U.S. source deposit interest, in addition to your name and address, you must include the telephone number of a person to contact. This number must provide direct access to an individual who can answer questions about the statement. The telephone number is not required on Copy A of paper forms or on electronically filed forms. Box 12e—Withholding agent's GIIN. The GIIN provided, if any, should be the GIIN issued to the branch of, or disregarded entity owned by, the participating FFI or registered deemed-compliant FFI that is making the payment. Box 12f—Country code. You must enter the code (from the list at IRS.gov/CountryCodes) for the country for which you are resident under that country's tax laws. Enter "OC" (other country) only when the country of residence does not appear on the list. Note: If the withholding agent is a U.S. person or a foreign branch of a U.S. person, enter "US" in box 12f.

# Boxes 13a Through 13h—Recipient's Name, Country Code, and Address

Box 13a—Recipient's name. Enter the complete name of the recipient in box 13a. If you do not know the name of the recipient, or are required to use the recipient status codes for an unknown recipient, enter "Unknown Recipient." Also enter "Unknown Recipient" if you pay an amount realized subject to section 1446(f) withholding to an NQI and you do not agree with the NQI to report the NQI's account holders on Form 1042-S. If Form 1042-S is being completed by a QI, WP, or WT for a chapter 3 withholding rate pool or chapter 4 withholding pool, enter "Withholding rate pool" if withholding under chapter 3 was applied, or, if chapter 4 withholding was applied, a description of the chapter 4 reporting pool (for example, "Nonparticipating FFI Pool") in box 13a. A withholding agent reporting payments made to a participating FFI or registered deemed-compliant FFI with respect to a chapter 4 reporting pool must include the name and address of the FFI in boxes 13a through 13k as well as the FFI's GIIN and country code. The GIIN reported must be the GIIN of the branch to whom the withholding agent is making the payment. A QI reporting payments made to a PAI on a withholding rate pool basis must include the name and address of the PAI in boxes 13a through 13k. In the case of foreign joint owners, Form 1042-S can only list one of the owners as the recipient in box 13a. Form 1042-S must not be completed with more than one of the joint owners as the recipient. If the recipient is a QI acting as a QDD with respect to the payment, enter the name of the QDD (identifying the QDD by the name used for the QDD on the Form W-8IMY it provides, which should include a branch identifier, if applicable). If a disregarded entity (or a branch) that is required to provide a TIN on Form W-8IMY is identified in Part II of the Form W-8BEN-E, include the name of the disregarded entity (or the jurisdiction of the branch) in parentheses after the name of the recipient. Boxes 13c through 13h—Recipient's address. In most cases, you must enter a foreign address in boxes 13c through 13h. However, there are limited exceptions. For example, you may enter a U.S. address when reporting payments of scholarship or fellowship grants (income code 16). For addresses outside the United States or its commonwealths and territories, follow the foreign country's practice for entering the postal code. For addresses within the United States, use the U.S. Postal Service two-letter abbreviation for the state name. If you want to enter the recipient's account number, use box 13o.

# Note:

Box 13b—Recipient's country code. You must enter the code (from the list at IRS.gov/CountryCodes) for the country of which the recipient claims residency under that country's tax laws. Enter "OC" (other country) only when the country of residence does not appear on the list or the payment is made to an international organization (for example, the United Nations). If the recipient is unknown, leave box 13b blank and enter "Unknown Recipient" in box 13a. If you are making a payment to a QI, QSL, WP, or WT, or if you are a QI, QSL, WP, or WT and are making a payment to a QI, WP, or WT withholding rate pool, enter the country code of the QI, QSL, WP, or WT. Also, if you are making a payment to a participating FFI or registered deemed-compliant FFI's chapter 4 reporting pool, enter the country code of the participating FFI or registered deemed-compliant FFI or branch of or disregarded entity owned by such FFI receiving the withholdable payment and that was listed on Part II of either the Form W-8BEN-E or W-8IMY. Note: If you are reporting a payment to a U.S. person on Form 1042-S, enter "US" as the country code. Caution: If exemption code 04 (exempt or reduced withholding under tax treaty) appears in box 3a or if a reduced rate of withholding based on a tax treaty is entered in box 3b, the country code entered in box 13b must be a country with which the United States has entered into an income tax treaty.

# Boxes 13i and 13l—Recipient's U.S. TIN and GIIN

You must obtain and enter a U.S. TIN for any of the following recipients. Any recipient whose income is effectively connected with the conduct of a trade or business in the United States. For these recipients (excluding a recipient receiving a payment subject to section 1446(a) or (f) withholding), enter exemption code 01 in box 3a or exemption code 14 in box 4a. Any foreign person claiming a reduced rate of, or exemption from, tax under a tax treaty between a foreign country and the United States, unless the recipient provides an FTIN (in such case, use box 13m), or unless the income is an unexpected payment (as described in Regulations section 1.1441-6(g)) or consists of dividends and interest from stocks and debt obligations that are actively traded; dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (mutual fund); dividends, interest, or royalties from units of beneficial interest in a unit investment trust that are (or were, upon issuance) publicly offered and are registered with the Securities and Exchange Commission under the Securities Act of 1933; and amounts paid with respect to loans of any of the above securities. In the latter case, you must use income code 13, 51, 52, 53, or 54. Any nonresident alien individual claiming exemption from tax under section 871(f) for certain annuities received under qualified plans. A foreign organization claiming an exemption from tax solely because of its status as a tax-exempt organization under section 501(c) or as a private foundation. Any QI other than a disclosing QI (which is not a recipient). Any WP or WT. Any nonresident alien individual claiming exemption from withholding on compensation for independent personal services. Any U.S. branch of an FFI or territory FI that is treated as a U.S. person. Any QSL that was paid a substitute dividend. In all other cases, if you know the recipient's TIN or if a foreign person provides a TIN on Form W-8, but is not required to do so, you must include the TIN on Form 1042-S. A U.S. TIN is also required on a Form 1042-S used by a recipient to claim credit for (or a refund of) the withholding. You must include a GIIN if you are required to collect a GIIN for the recipient under the requirements documenting the payee under chapter 4. If you make a payment to a disregarded entity or branch that is identified in Part II of Form W-8BEN-E, then report the GIIN of the disregarded entity or branch provided in that section.

# Boxes 13j and 13k—Recipient's Chapter 3 and Chapter 4 Status Codes

Enter the recipient status code from the list of Recipient Status Codes in Appendix B, later. The following special instructions apply for chapter 3 status codes. If income code 42 (earnings as an artist or athlete—no central withholding agreement) or 43 (earnings as an artist or athlete—central withholding agreement) is used in box 1, use recipient code 22 (artist or athlete) instead of recipient code 16 (individual), 15 (corporation), or 08 (partnership other than withholding foreign partnership, publicly traded partnership, or partnership QDD). If you are making a payment to an NQI or a flow-through entity, in most cases you must use the recipient code that applies to the type of recipient who receives the income from the NQI or flow-through entity. Use recipient code 08 (partnership other than withholding foreign partnership, publicly traded partnership, or partnership QDD) only if you are reporting a payment of income that is effectively connected with the conduct of a trade or business of an NWP in the United States or that is subject to reporting under section 1446(f). You may, however, use recipient code 08 as the chapter 3 status code if you are using a chapter 4 pooled reporting code with respect to a payment made to an NWP. See the instructions later for use of recipient codes when reporting pools. Otherwise, follow the rules that apply to payments to flow-through entities. Use recipient code 21 (unknown recipient) only if you have not received a withholding certificate or other documentation for a recipient or you cannot determine how much of a payment is reliably associated with a specific recipient, or you pay an amount realized subject to section 1446(f) withholding to an NQI and you do not agree with the NQI to report the NQI's account holders on Form 1042-S. Do not use this code because you cannot determine the recipient's status as an individual, a corporation, etc. The regulations under chapter 3 provide rules on how to determine a recipient's status when a withholding agent does not have the necessary information. Use recipient code 13 (qualified securities lender—qualified intermediary) or 14 (qualified securities lender—other) if you make a payment to a QSL. Only a QI may use recipient codes 29 (PAI withholding rate pool—general) and 30 (PAI withholding rate pool—exempt organization). Only a QI, WP, or WT that made a pooled reporting election for chapter 3 purposes may use recipient codes 31 (agency withholding rate pool—general), 32 (agency withholding rate pool—exempt organization), 27 (withholding rate pool—general), and 28 (withholding rate pool—exempt organization) for chapter 3 purposes. Recipient code 28 or 30 should be used only for pooled account holders that have claimed an exemption based on their tax-exempt status and not some other exemption (for example, treaty or other Internal Revenue Code exception). A QI acting as a QDD may use only pooled reporting codes 27 and 28. If you are a QI (including a QI acting as a QDD), WP, WT, or QSL using a chapter 3 pooled reporting code with respect to a payment, do not include a chapter 4 status code unless making such payment to a PAI or certain partnerships or trusts. See Amounts Paid to PAIs and Amounts Paid by QIs to Certain Partnerships and Trusts , earlier. Use recipient code 35 (qualified derivatives dealer) if you make a payment to a QI that is acting as a QDD with respect to the payment. A U.S. withholding agent making a payment to any other QI (other than a disclosing QI) should use recipient code 12 and recipient code 09 or 11 if it is making a payment to a WP or WT, respectively. Use recipient code 05 (U.S. branch—treated as U.S. person) if you make a payment to a U.S. branch or territory FI treated as a U.S. person. A chapter 4 status code is required only if the payment is a withholdable payment or when a participating FFI or registered deemed-compliant FFI provides a chapter 4 withholding rate pool of U.S. payees. The chapter 4 status code may be determined under the applicable IGA by a withholding agent that is an FFI subject to such an agreement. The following special instructions apply for chapter 4 status codes. If you are making a withholdable payment to a U.S. branch of an FFI, use the applicable chapter 4 status code for the country of residence for an entity that is a participating FFI or registered deemed-compliant FFI. Otherwise, use the chapter 4 status code for any other foreign branch of the entity that is a participating FFI or registered deemed-compliant FFI. Only use recipient code 15 (nonparticipating FFI) or 30 (recalcitrant account holder) if you are reporting directly to the recipient. See Amounts paid to an NQI or a flow-through entity of withholdable payments , earlier. If you are reporting the chapter 4 reporting pools of recalcitrant account holders of a participating FFI, registered deemed-compliant FFI, or QI, use codes 42 through 49. Only use chapter 4 reporting pool code 48 (U.S. payees pool) if a participating FFI or registered deemed-compliant FFI has provided a Form W-8IMY certifying that it meets the requirements to include the account holder in a withholding rate pool of U.S. payees and that is associated with a withholding statement allocating the payment or a portion of the payment to a chapter 4 withholding rate pool of U.S. payees. Only use chapter 4 reporting pool code 49 (QI-recalcitrant pool—general) if you are reporting recalcitrant account holders of a QI. Use recipient code 17 (U.S. branch—treated as U.S. person) if you are making a payment to a U.S branch treated as a U.S. person (or recipient code 04 for a territory FI treated as a U.S. person). Use recipient code 26 (excepted NFFE—other) if you are reporting to an NFFE treated as a U.S. person. Only use recipient code 29 (unknown recipient) if you have not received a withholding certificate or other documentation with respect to a withholdable payment from an intermediary or a flow-through entity. Only use this code if you also used recipient code 21 (unknown recipient) as the chapter 3 status code. If you have not received a withholding certificate or other documentation from an intermediary or a flow-through entity, you must include the entity's information in boxes 15a through 15m. You may also use recipient code 29 if you are reporting a withholdable payment to a recipient that is not subject to withholding under the terms of an IGA and the recipient's account is not required to be reported as a U.S. account or nonconsenting U.S. account (for example, an undocumented individual with no U.S. indicia). Use recipient code 33 (U.S. reportable account) if you are reporting the recipient's account as a U.S. reportable account under the terms of a Model 1 IGA and the recipient does not meet the applicable requirements to be included in a pool of U.S. payees because the account holder is subject to chapter 3 withholding. Use recipient code 34 (nonconsenting U.S. account) if you are reporting the recipient's account as a nonconsenting U.S. account under the terms of a Model 2 IGA and the recipient does not meet the applicable requirements to be included in a pool of U.S. payees because the account holder is subject to chapter 3 withholding. Use recipient code 37 (undocumented preexisting obligation) for an obligation that a withholding agent has not documented and the payment being reported was made before the expiration of the time period allowed for documenting the obligation and thus the withholding agent was not required to apply the presumption rules to determine the payee's chapter 4 status. Use recipient code 39 (account holder of excluded financial account) if you are reporting amounts paid with respect to an obligation that is excluded from the definition of financial account for chapter 4 purposes (see Regulations section 1.1471-5(b)(2)). Use recipient code 41 (NFFE subject to 1472 withholding) if you are reporting amounts paid to a specific recipient that is an NFFE that you (or another withholding agent) withheld upon under section 1472 (that is, you are reporting amounts in boxes 7 through 9) unless the NFFE is treated as a recalcitrant account holder under Regulations section 1.1471-5(g), in which case, use code 30 (recalcitrant account holder). If you received a withholding certificate or other documentation with respect to a withholdable payment from an intermediary or a flow-through entity that is a participating FFI or deemed-compliant FFI (other than a WP, WT, or QI that assumes primary withholding responsibility) and cannot reliably associate the payment with documentation to determine the payee's chapter 4 status (or with a chapter 4 withholding rate pool), you must report the recipient as "Unknown Recipient" and include the entity's information in boxes 15a through 15m (to the extent provided). If you are reporting a chapter 4 pooled reporting code with respect to a withholdable payment to an intermediary or a flow-through entity, use the chapter 3 status code for the intermediary or flow-through entity as the recipient code. If you are a QI, WP, or WT reporting direct account holders, do not include a chapter 3 status code for the recipient if you are using a chapter 4 reporting pool code as the recipient's chapter 4 status code. If you are making a withholdable payment to a recipient that is a restricted distributor (as defined in Regulations section 1.1471-5(f)(4)), use recipient code 10 (certified deemed-compliant FFI—other).

# Box 13m—Recipient's FTIN

Use box 13m to enter the recipient's identification number used in the recipient's country of residence for tax purposes. You must obtain and enter an FTIN for any of the following recipients. Any foreign person claiming a reduced rate of, or exemption from, tax under a tax treaty between a foreign country and the United States if such person did not provide a U.S. TIN and the income is not the type for which an exemption from the TIN requirement applies (see the instructions for boxes 13i and 13l, earlier). Any recipient of a payment made with respect to a financial account (as defined in Regulations section 1.1471-5(b)) maintained at your U.S. office or branch, if you are a financial institution, to the extent that such recipient has furnished a withholding certificate that provides an FTIN, or you obtain the FTIN under the alternative procedures described in Regulations section 1.1441-1(e)(2)(ii)(B), or the recipient's FTIN is identified in any of your electronically searchable information. See Regulations section 1.1441-1(e)(2)(ii) for more information regarding a withholding agent's obligation to obtain and report a recipient's FTIN.

# Box 13n—LOB Code

If you are making a payment for which a beneficial owner that is an entity has claimed a reduced rate of withholding under an income tax treaty and has provided documentation that establishes the LOB article under which the beneficial owner qualifies, enter the applicable LOB code from Appendix B, later. See the Instructions for Form W-8BEN-E for a description of each of the LOB codes. If you are a QI, WP, or WT reporting a chapter 3 pool for which a reduced rate of withholding under an income tax treaty applies, do not include an LOB code.

# Box 13o—Recipient's Account Number

If you are a financial institution reporting amounts paid to your direct account holder with respect to an account maintained by you at your U.S. office or U.S. branch, you must report the recipient's account number in box 13o. If the amount is paid through an NQI or a flow-through entity, you are not required to use this box. Note: A U.S. financial institution or a U.S. branch of an FFI is required to report payments of the same type of income (as determined by the income code in box 1) made to multiple financial accounts held by the same beneficial owner at a U.S. office of such institution on a separate Form 1042-S for each account. For this purpose, a financial account is an account described in Regulations section 1.1471-5(b)(1). Report the identifying number assigned to such account (or its functional equivalent in the absence of an account number for the recipient).

# Box 13p—Recipient's Date of Birth

Use box 13p to enter the recipient's date of birth. The correct format if entered is YYYYMMDD (for example, enter "20001205" for a date of birth of December 5, 2000). A financial institution making a payment with respect to a financial account (as defined in Regulations section 1.1471-5(b)) maintained at its U.S. office or U.S. branch must report the recipient's date of birth (if the recipient is an individual) to the extent that such recipient has furnished documentation that provides a date of birth or the recipient's date of birth is identified in any of the withholding agent's files. See Regulations section 1.1441-1(e)(2)(ii)(B) for more information regarding a withholding agent's obligation to obtain and report a recipient's date of birth.

# Boxes 14a and 14b—Primary Withholding Agent's Name and EIN

If you are an intermediary or a flow-through entity reporting amounts withheld by another withholding agent (the primary withholding agent) in box 8, you must provide the name and EIN of the withholding agent that withheld the tax. If multiple withholding agents withheld amounts reported on the same Form 1042-S, report the name of any one of the withholding agents that withheld amounts. Otherwise, leave blank.

# Box 15—Pro-Rata Basis Reporting Checkbox

Withholding agents must check box 15 to notify the IRS that an NQI that used the alternative procedures of Regulations section 1.1441-1(e)(3)(iv)(D) failed to properly comply with those procedures. See Pro-rata reporting to NQI, earlier, for additional information.

# Boxes 15a Through 15m—Intermediary/Flow-Through Entity's Name, Status Code, Country Code, Address, EIN, GIIN, and FTIN

If you are reporting amounts subject to reporting for chapter 3 or 4 purposes paid to a recipient whose withholding certificates or other documentation has been submitted to you (or should have been submitted to you) with a Form W-8IMY provided by an intermediary or a flow-through entity, you must include the name and address of the intermediary or flow-through entity with whose Form W-8IMY the recipient's Form W-8 or other documentation is associated. You must also include the intermediary or flow-through entity's chapter 3 and chapter 4 status codes and, if any, the TIN and GIIN of the intermediary or flow-through entity when provided or required to be collected by the withholding agent. If the intermediary or flow-through entity completed Part II of Form W-8IMY, then report the GIIN provided in that section. If you are making a payment to a U.S. branch not treated as a U.S. person that has certified that it is applying the rules in Regulations section 1.1471-4(d)(2)(iii)(C) (in order to avoid being withheld upon under chapter 4), use chapter 4 intermediary code 18 (U.S. branch—not treated as U.S. person (reporting under section 1471)). Note: A withholding agent that is an intermediary or a flow-through entity will leave these boxes blank unless it is making the payment to an intermediary or a flow-through entity. Box 15f—Country code. You must enter the country code (from the list at IRS.gov/CountryCodes) for the country where the intermediary or flow-through entity is located. Box 15g—Intermediary or flow-through entity's FTIN. Use box 15g to enter the intermediary or a flow-through entity's identifying number used in the country of residence for tax purposes. Box 15g is optional.

# Boxes 16a Through 16e—Payer's Name, TIN, GIIN, and Status Code

See the definition of authorized agent, earlier, under Definitions. Include the payer's name, TIN, and GIIN if different from the withholding agent shown in boxes 12a, 12d, and 12e. If payment is being made by a transfer agent or a paying agent acting as a withholding agent on behalf of a payer, enter the chapters 3 and 4 status codes applicable to the status of the payer in boxes 16d and 16e. If you are a nominee that is the withholding agent for the amount of a PTP distribution subject to withholding under section 1446(a) (reporting income code 27), enter the PTP's information in boxes 16a through 16e. However, you must enter the PTP's EIN, GIIN (if any), and chapter 4 status only if included in your records for the PTP interest that relates to the distribution. This includes information in your securities master file (or similar document), or that is reported in a qualified notice issued by the PTP during the year of the distribution. A nominee should also enter the PTP information when using income code 58 (publicly traded partnership distributions—undetermined) to report a PTP distribution or when using income code 57 to report an amount realized attributable to a PTP distribution. Note: You must issue a separate Form 1042-S to complete boxes 16a through 16e with respect to each PTP that makes a distribution of any of these types of income to the recipient. This requirement does not apply to a withholding agent that reports to a QI as a recipient with respect to a withholding rate pool or to a QI that reports using withholding rate pools. A PTP may be required to report the same amount of a PTP distribution on a qualified notice as subject to both section 1446(f) withholding and other chapter 3 or 4 withholding (such as under section 1446(a)). See Regulations sections 1.1446-4(b)(4) and 1.1446(f)-4(c)(2)(iii). In this case, you must report the same amount on separate Forms 1042-S, with the appropriate income code and associated amount of withholding included on each form. Therefore, the total amounts reported on Forms 1042-S in box 2 (gross income) resulting from the distribution may, in some cases, exceed the actual amount of the distribution.

# Boxes 17a Through 17c—State Income Tax Withheld and Related Information

Include in these boxes information relating to any state income tax withheld.

# Amended Forms

If you file a Form 1042-S with the IRS and later discover you made an error on it, you must correct it as soon as possible. To correct a previously filed Form 1042-S, you will need to file an amended Form 1042-S. The amended form must have the same unique form identifier as the original form that is being amended. You must check the "Amended" box and provide the amendment number. The amendment number must be numeric and the length must be exactly one digit. Each time that you amend the same form (as determined by the unique form identifier), you must provide the amendment number in the box provided on the form (using "1" for the first amendment and increasing sequentially for each subsequent amendment). Caution: If you provide an amended Form 1042-S to a recipient, you must also file the amended form with the IRS. Do not file an amended return if you provided Form 1042-S to the recipient (Copies B, C, and D) and need to make corrections to such form prior to filing with the IRS. In such a case, you should file an original Form 1042-S with the correct information. Do not check the "Amended" box or indicate any amendment number. Provide a copy of the corrected Form 1042-S to the recipient. Note that the copies of the Form 1042-S provided to the recipients (Copies B, C, and D) must match the copy of the Form 1042-S that is filed with the IRS. If any information you correct on Form(s) 1042-S changes the information you previously reported on Form 1042, you must also correct the Form 1042 by filing an amended return. To do this, see the Form 1042 instructions. If you are not e-filing, follow these steps to amend a previously filed Form 1042-S. Step 1. Prepare a paper Form 1042-S. Enter all the correct information on the form, including the recipient name and address, money amounts, and codes. Enter an "X" in the "Amended" box at the top of the form and enter the amendment number. Amended checkbox. Enter an "X" in the "Amended" checkbox of Copies A, B, C, and D only if you are amending a Form 1042-S you previously filed with the IRS. You must provide statements to recipients showing the corrections as soon as possible regardless of the change to the Form 1042-S.

# Caution:

Step 2. File the amended paper Form 1042-S with a Form 1042-T. See the Form 1042-T instructions for information on filing these forms. Caution: If you fail to correct Form(s) 1042-S, you may be subject to a penalty. See Penalties, earlier.

# Privacy Act and Paperwork Reduction Act Notice.

We ask for the information on this form to carry out the Internal Revenue laws of the United States. Sections 1441, 1442, 1446 (for PTPs), 1471, and 1472 require withholding agents to report and pay over to the IRS taxes withheld from certain U.S. source income. Form 1042-S is used to report the amount of income and withholding to the payee. Form 1042 is used to report the amount of withholding that must be paid over to the IRS. Section 6109 requires you to provide your identification number. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths and territories for use in administering their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. If you fail to provide this information in a timely manner, you may be liable for penalties and interest. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is 34 minutes. If you have comments concerning the accuracy of this time estimate or suggestions for making this form simpler, we would be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can write to Internal Revenue Service, Tax Forms and Publications, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send the form to this address. Instead, see Where, When, and How To File , earlier.

# Appendix A

Box 1 Income Codes Code Interest Income 14 Real property income and natural resources royalties 01 Interest paid by U.S. obligors—general 15 Pensions, annuities, alimony, and/or insurance premiums 02 Interest paid on real property mortgages 16 Scholarship or fellowship grants 03 Interest paid to controlling foreign corporations 17 Compensation for independent personal services2 04 Interest paid by foreign corporations 18 Compensation for dependent personal services2 05 Interest on tax-free covenant bonds 19 Compensation for teaching2 22 Interest paid on deposit with a foreign branch of a domestic corporation or partnership 20 Compensation during studying and training2 29 Deposit interest 23 Other income 30 Original issue discount (OID) 24 Qualified investment entity (QIE) distributions of capital gains 31 Short-term OID 25 Trust distributions subject to IRC section 1445 33 Substitute payment—interest 26 Unsevered growing crops and timber distributions by a trust subject to IRC section 1445 51 Interest paid on certain actively traded or publicly offered securities1 27 Publicly traded partnership distributions subject to IRC section 1446(a) 54 Substitute payments—interest from certain actively traded or publicly offered securities1 28 Gambling winnings3 32 Notional principal contract income4 Code Dividend Income 35 Substitute payment—other 06 Dividends paid by U.S. corporations—general 36 Capital gains distributions 07 Dividends qualifying for direct dividend rate 37 Return of capital 08 Dividends paid by foreign corporations 38 Eligible deferred compensation items subject to IRC section 877A(d)(1) 34 Substitute payment—dividends 39 Distributions from a nongrantor trust subject to IRC section 877A(f)(1) 40 Other dividend equivalents under IRC section 871(m) 41 Guarantee of indebtedness 52 Dividends paid on certain actively traded or publicly offered securities1 42 Earnings as an artist or athlete—no central withholding agreement5 53 Substitute payments—dividends from certain actively traded or publicly offered securities1 43 Earnings as an artist or athlete—central withholding agreement5 56 Dividend equivalents under IRC section 871(m) as a result of applying the combined transaction rules 44 Specified federal procurement payments 50 Income previously reported under escrow procedure6 Code Other Income 55 Taxable death benefits on life insurance contracts 09 Capital gains 57 Amount realized under IRC section 1446(f) 10 Industrial royalties 58 Publicly traded partnership distributions—undetermined 11 Motion picture or television copyright royalties 59 Consent fees 12 Other royalties (for example, copyright, software, broadcasting, endorsement payments) 60 Loan syndication fees 13 Royalties paid on certain publicly offered securities1 61 Settlement payments 1 This code should only be used if the income paid is described in Regulations section 1.1441‐6(c)(2) and the withholding agent has reduced the rate of withholding under an income tax treaty without the recipient providing a U.S. TIN or an FTIN. 2 If compensation that would otherwise be covered under Income Codes 17 through 20 is directly attributable to the recipient's occupation as an artist or athlete, use Income Code 42 or 43 instead. 3 Subject to 30% withholding rate unless the recipient is from one of the treaty countries listed under Gambling winnings (Income Code 28) in Pub. 515. 4 Use appropriate Interest Income Code for interest from a notional principal contract where nonperiodic payment(s) is treated as a loan. 5 Income Code 43 should only be used if Letter 4492, Venue Notification, has been issued by the IRS (otherwise, use Income Code 42 for earnings as an artist or athlete). If Income Code 42 or 43 is used, Recipient Code 22 (artist or athlete) should be used instead of Recipient Code 16 (individual), 15 (corporation), or 08 (partnership other than withholding foreign partnership, publicly traded partnership, or partnership QDD). 6 Use only to report gross income the tax for which is being deposited in the current year because such tax was previously escrowed for chapters 3 and 4 and the withholding agent previously reported the gross income in a prior year and checked the box to report the tax as not deposited under the escrow procedure. See the instructions for this form for further explanation.

# Appendix B

Exemption Codes, Recipient Status Codes, and Box 13n LOB Codes Box 3a. Exemption code (applies if withholding is applied at a reduced rate or if payment is exempt from withholding). Boxes 12b, 12c, 13j, 13k, 15b, 15c, 16d, and 16e. Chapter 3 and Chapter 4 Status Codes (used to identify the type of Withholding Agent, Recipient, Intermediary, or Payer). Code Chapter 3 Status Codes Chapter 3 Authority for Exemption or Reduced Rate of Withholding 05 U.S. branch—treated as U.S. person10 01 Effectively connected income 06 U.S. branch—not treated as U.S. person11 02 Exempt or reduced withholding under IRC7 07 U.S. branch—ECI presumption applied 03 Income is not from U.S. sources 08 Partnership other than withholding foreign partnership, publicly traded partnership, or partnership QDD 04 Exempt or reduced withholding under tax treaty 09 Withholding foreign partnership 05 Portfolio interest exempt under IRC 10 Trust other than withholding foreign trust 06 QI that assumes primary withholding responsibility 11 Withholding foreign trust 07 Withholding foreign partnership or withholding foreign trust 12 Qualified intermediary 08 U.S. branch treated as U.S. person 13 Qualified securities lender—qualified intermediary 10 QI represents that income is exempt 14 Qualified securities lender—other 11 QSL that assumes primary withholding responsibility 15 Corporation 12 Payee subjected to chapter 4 withholding 16 Individual 22 QDD that assumes primary withholding responsibility 17 Estate 23 Exempt under section 897(l) 18 Private foundation 24 Exempt under section 892 19 International organization 20 Tax exempt organization (section 501(c) entities) Box 4a. Exemption code (applies if the tax rate entered in 4b is 00.00). 21 Unknown recipient 22 Artist or athlete Chapter 4 Authority for Exemption 23 Pension 13 Grandfathered payment 24 Foreign central bank of issue 14 Effectively connected income 25 Nonqualified intermediary 15 Payee not subject to chapter 4 withholding 26 Hybrid entity making treaty claim 16 Excluded nonfinancial payment 35 Qualified derivatives dealer 17 Foreign Entity that assumes primary withholding responsibility 36 Foreign government—integral part 18 U.S. payees of participating FFI or registered deemed-compliant FFI 37 Foreign government—controlled entity 19 Exempt from withholding under IGA8 38 Publicly traded partnership 20 Dormant account9 39 Disclosing qualified intermediary 21 Other payment not subject to chapter 4 withholding 40 Partnership QDD12 41 U.S. government entity or tax exempt entity (other than section 501(c) entities)13 Pooled Reporting Codes14 27 Withholding rate pool—general 28 Withholding rate pool—exempt organization 29 PAI withholding rate pool—general 30 PAI withholding rate pool—exempt organization 31 Agency withholding rate pool—general 32 Agency withholding rate pool—exempt organization 7 This code should only be used if no other specific chapter 3 exemption code applies. 8 Use only to report a U.S. reportable account or nonconsenting U.S. account that is receiving a payment subject to chapter 3 withholding. 9 Use only if applying the escrow procedure for dormant accounts under Regulations section 1.1471‐4(b)(6). 10 This code can be used by a territory FI that is treated as a U.S. person. 11 This code can be used by a territory FI that is not treated as a U.S. person. 12 Status code 40 should only be used for the partnership's allocations to its partners with respect to its (or its branch's) QDD's activities. The partnership should report all other allocations with respect to its partners using status code 8, 9, or 38, as applicable. When the partnership is transacting in its QDD capacity, it should use status code 35. 13 This includes a college, a university, or another U.S entity exempt from tax under an Internal Revenue Code section other than section 501(c). This code is only applicable for reporting the chapter 3 status of a withholding agent (box 12b). 14 Codes 27 through 32 should only be used by a QI, QSL, WP, or WT. A QI acting as a QDD may use only code 27 or 28.

# Appendix B (continued)

Exemption Codes, Recipient Status Codes, and Box 13n LOB Codes (continued) Boxes 12b, 12c, 13j, 13k, 15b, 15c, 16d, and 16e. Chapter 3 and Chapter 4 Status Codes (continued). 34 Nonconsenting U.S. account Chapter 4 Status Codes 35 Sponsored direct reporting NFFE 01 U.S. withholding agent—FI 36 Excepted inter-affiliate FFI 02 U.S. withholding agent—other 37 Undocumented preexisting obligation 03 Territory FI—not treated as U.S. person 38 U.S. branch—ECI presumption applied 04 Territory FI—treated as U.S. person 39 Account holder of excluded financial account15 05 Participating FFI—other 40 Passive NFFE reported by FFI16 06 Participating FFI—reporting Model 2 FFI 41 NFFE subject to 1472 withholding 07 Registered deemed-compliant FFI—reporting Model 1 FFI 50 U.S. withholding agent—foreign branch of FI 08 Registered deemed-compliant FFI—sponsored entity Pooled Reporting Codes 09 Registered deemed-compliant FFI—other 42 Recalcitrant pool—no U.S. indicia 10 Certified deemed-compliant FFI—other 43 Recalcitrant pool—U.S. indicia 11 Certified deemed-compliant FFI—FFI with low value accounts 44 Recalcitrant pool—dormant account 12 Certified deemed-compliant FFI—nonregistering local bank 45 Recalcitrant pool—U.S. persons 13 Certified deemed-compliant FFI—sponsored entity 46 Recalcitrant pool—passive NFFEs 14 Certified deemed-compliant FFI—investment entity that does not maintain financial accounts 47 Nonparticipating FFI pool 15 Nonparticipating FFI 48 U.S. payees pool 16 Owner-documented FFI 49 QI‐recalcitrant pool—general17 17 U.S. branch—treated as U.S. person 18 U.S. branch—not treated as U.S. person (reporting under section 1471) Box 13n. LOB Code (enter the code that best describes the applicable limitation on benefits (LOB) category that qualifies the taxpayer for the requested treaty benefits). 19 Passive NFFE identifying substantial U.S. owners 20 Passive NFFE with no substantial U.S. owners Code LOB Treaty Category 21 Publicly traded NFFE or affiliate of publicly traded NFFE 02 Government—contracting state/political subdivision/local authority 22 Active NFFE 03 Tax exempt pension trust/pension fund 23 Individual 04 Tax exempt/charitable organization 24 Section 501(c) entities 05 Publicly traded corporation 25 Excepted territory NFFE 06 Subsidiary of publicly traded corporation 26 Excepted NFFE—other 07 Company that meets the ownership and base erosion test 27 Exempt beneficial owner 08 Company that meets the derivative benefits test 28 Entity wholly owned by exempt beneficial owners 09 Company with an item of income that meets the active trade or business test 29 Unknown recipient 10 Discretionary determination 30 Recalcitrant account holder 11 Other 31 Nonreporting IGA FFI 12 No LOB article in treaty 32 Direct reporting NFFE 33 U.S. reportable account 15 This code should only be used if income is paid to an account that is excluded from the definition of financial account under Regulations section 1.1471‐5(b)(2) or under Annex II of the applicable Model 1 IGA or Model 2 IGA. 16 This code should only be used when the withholding agent has received a certification on the FFI withholding statement of a participating FFI or registered deemed‐compliant FFI that maintains the account that the FFI has reported the account held by the passive NFFE as a U.S. account (or U.S. reportable account) under its FATCA requirements. The withholding agent must report the name and GIIN of such FFI in boxes 15d and 15e. 17 This code should only be used by a withholding agent that is reporting a payment (or portion of a payment) made to a QI with respect to the QI's recalcitrant account holders.

# Appendix C

Comprehensive analysis of Example 1 under Payments directly to beneficial owners or partners , earlier. DIRECT PAYMENT TO BENEFICIAL OWNER WA, a U.S. corporate withholding agent who is an issuer of stock and not a financial institution, makes a $1,000 payment of U.S. source dividends to A, a foreign individual who has provided a Form W-8BEN to WA and who is not eligible for a reduced rate of chapter 3 withholding under a treaty. Before completing Form 1042-S, WA takes the following steps. Step 1: Because the payment is a payment described under Amounts Subject to Reporting on Form 1042-S , earlier, WA determines it has a Form 1042-S filing obligation. Step 2: Because WA is making a payment of U.S. source FDAP income, WA determines the payment meets the definition of both a "withholdable payment" under chapter 4 and "an amount subject to withholding" under chapter 3. Step 3: Because the payment is being made to an individual (and not a nonparticipating FFI or an NFFE that is not an excepted NFFE that has failed to disclose its substantial U.S. owners (or certify that it has no substantial U.S. owners) (see definitions of these terms)), WA determines that the payment is not subject to chapter 4 withholding. Because the payment is not subject to chapter 4 withholding but is an amount subject to withholding under chapter 3, WA determines that chapter 3 is the correct chapter indicator. WA will thus enter "3" in box 3 (chapter indicator). Note: Although the payment is properly classified as a chapter 3 payment, WA must complete certain boxes on Form 1042-S that pertain to chapter 4 (see explanations for boxes 4a, 4b, and 13k below). WA must file a Form 1042-S for A and complete it as follows. Caution: Be sure to read the instructions for each box or field in its entirety before completing a box or field on Form 1042-S. WA must provide a unique form identifier in the applicable entry field at the top of Form 1042-S. For additional information, including unique form identifier requirements, see Unique Form Identifier, earlier. Box Description Required Entry Comments 1 Income code "06" WA enters "06" (dividends paid by U.S. corporations—general), which is the appropriate two-digit code from the list of Income Codes provided in Appendix A. 2 Gross income "1000" WA enters the gross amount paid (in whole dollars), including withheld tax. 3 Chapter indicator "3" WA enters "3" to indicate that amounts were withheld pursuant to chapter 3. 3a Chapter 3 exemption code "00" WA enters "00" because an amount was withheld under chapter 3 and the tax rate is greater than zero and is not due to backup withholding (see the instructions for boxes 3a and 4a, earlier). 3b Chapter 3 tax rate "30.00" WA enters "30.00" consistent with the formatting specified in the instructions for boxes 3b and 4b, earlier. 4a Chapter 4 exemption code "15" WA enters "15" (payee not subject to chapter 4 withholding), which is the appropriate two-digit code from the list of Exemption Codes provided in these instructions. Note: WA uses exemption code 15 because the payment is a withholdable payment, but has not been withheld upon under chapter 4 because of the payee's chapter 4 status (an individual and not a person subject to chapter 4 withholding as explained in the instructions for boxes 3a and 4a, earlier). 4b Chapter 4 tax rate "00.00" WA enters "00.00" because the amount reported in box 2 is not subject to chapter 4 withholding. See the instructions for boxes 3b and 4b, earlier. 5 Withholding allowance WA leaves box 5 blank because the income code it is reporting in box 1 is not one of the codes specified in the instructions for which box 5 reporting is required. See the instructions for box 5, earlier. 6 Net income WA leaves box 6 blank because it did not enter an amount in box 5. 7a Federal tax withheld "300" WA enters "300" (30% of $1,000). 7b Check if federal tax withheld was not deposited with the IRS because escrow procedures were applied WA does not check the box because it is not using an escrow procedure. 7c Check if withholding occurred in subsequent year with respect to a partnership interest WA does not check the box because it did not withhold in a subsequent year. 8 Tax withheld by other agents WA leaves box 8 blank because tax was not withheld by other withholding agents. 9 Overwithheld tax repaid to recipient pursuant to adjustment procedures WA leaves box 9 blank because it did not repay overwithheld tax to the recipient under the reimbursement procedure or the set-off procedure. For more information, see the instructions for box 9, earlier. 10 Total withholding credit "300" WA enters "300" (combining boxes 7a, 8, and 9). 11 Tax paid by withholding agent (amounts not withheld) WA leaves box 11 blank because it withheld on the payment to the recipient (as opposed to paying the tax from its own funds). For more information, see the instructions for box 11, earlier. 12a Withholding agent's EIN Specific information required Although WA's EIN is not specified in this example, this is a required field that WA must complete.

# Appendix C (continued)

Box Description Required Entry Comments 12b–c Withholding agent's chapter 3 and chapter 4 status codes "15" and "02" WA enters "15" in box 12b and "02" in box 12c because it is a U.S. corporate withholding agent that is not a financial institution. Note: WA must enter both a chapter 3 and a chapter 4 withholding agent status code regardless of the type of payment being reported. 12d Withholding agent's name "WA" WA must enter its complete name. 12e Withholding agent's GIIN WA leaves this box blank because a U.S. withholding agent is generally not required to obtain a GIIN. See Global intermediary identification number and Box 12e, earlier, for details. 12f Withholding agent's country code "US" WA enters "US" as the country code because it is a U.S. withholding agent. See the instructions for box 12f, earlier. 12g Withholding agent's FTIN, if any WA leaves this box blank because it is a U.S. withholding agent and it does not have an FTIN or a country of residence other than the United States. 12h–m Withholding agent's address Specific information required Although WA's address is not specified in this example, this is a required field that WA must complete. See Boxes 12d Through 12m, earlier, for requirements. 13a Recipient's name "A" WA enters the recipient's name. 13b Recipient's country code Specific information required Although the recipient's country of residency is not specified in this example, this is a required field that WA must complete. See the instructions for box 13b, earlier, for requirements. 13c–h Recipient's address Specific information required Although the recipient's address is not specified in this example, this is a required field that WA must complete. See Boxes 13c through 13h, earlier, for requirements. 13i Recipient's U.S. TIN, if any The recipient's U.S. TIN is not specified in this example. However, given the facts used in this example, the recipient's U.S. TIN is generally not required because A is not a type of recipient described in the instructions for boxes 13i and 13l, earlier, for which this TIN is required (for example, A is not claiming a reduced rate of, or exemption from, tax under a tax treaty between the recipient's country of residence and the United States). However, WA must enter the recipient's U.S. TIN if WA knows it or if it was provided to WA on a Form W-8. 13j Recipient's chapter 3 status code "16" WA enters chapter 3 status code "16" (individual), which is the appropriate two-digit code from the list of chapter 3 status codes provided in Appendix B. Note: A withholding agent must enter a chapter 3 status code for all "amounts subject to reporting under chapter 3." 13k Recipient's chapter 4 status code "23" WA enters chapter 4 status code "23" (individual), which is the appropriate two-digit code from the list of chapter 4 status codes provided in Appendix B. Note: A withholding agent must enter a chapter 4 status code for the recipient only if the payment is a withholdable payment (as is the case in this example) or when a participating FFI or registered deemed-compliant FFI is reporting a chapter 4 withholding rate pool of U.S. payees. 13l Recipient's GIIN WA leaves box 13l blank because it only applies for chapter 4 reporting purposes. See Global intermediary identification number and the instructions for boxes 13i and 13l, earlier. 13m Recipient's FTIN, if any The recipient's FTIN is not required because A is not a type of recipient described in the instructions for box 13m, earlier, for which the FTIN is required. 13n LOB code WA leaves box 13n blank because the recipient is an individual (not an entity). 13o Recipient's account number WA leaves box 13o blank because WA is not a financial institution. 13p Recipient's date of birth WA leaves box 13p blank because WA is not a financial institution. 14a–b Primary withholding agent's information WA leaves these boxes blank because tax was not withheld by other withholding agents. 15a–m Intermediary information WA leaves these boxes blank because WA is making a direct payment to the recipient and there are no other withholding agents. 16a–e Payer's information WA leaves these boxes blank because WA is making a direct payment to the recipient and there are no other payers involved. 17a–c State income taxes Although not specified in this example, WA enters in these boxes any information relating to any state income tax withheld.

# Appendix D

Comprehensive example of how to complete Form 1042-S for gambling winnings. DIRECT PAYMENT TO BENEFICIAL OWNER ABC Casino ("WA"), a U.S. corporate withholding agent that is not a financial institution, makes a $10,000 payment of gambling winnings to A, a foreign individual who has provided a Form W-8BEN to WA establishing foreign status. The gambling winnings are subject to 30% withholding as there is no exemption available under the Internal Revenue Code or applicable treaty. Before completing Form 1042-S, WA takes the following steps. Step 1: Because the payment is a payment described under Amounts Subject to Reporting on Form 1042-S , earlier, WA determines it has a Form 1042-S filing obligation. Step 2: Because WA is making a payment of U.S. source FDAP income, WA determines the payment meets the definition of "an amount subject to withholding" under chapter 3. Because gambling winnings are not treated as a "withholdable payment" under chapter 4, as it is an excluded nonfinancial payment under Regulations section 1.1473-1(a)(4)(iii), WA determines that the payment is not subject to chapter 4 withholding. Step 3: Because the payment is not subject to chapter 4 withholding but is an amount subject to withholding under chapter 3, WA determines that chapter 3 is the correct chapter indicator. WA will thus enter "3" in box 3 (chapter indicator). Note: Although the payment is properly classified as a chapter 3 payment, WA must complete certain boxes on Form 1042-S that pertain to chapter 4 (see explanations for boxes 4a, 4b, and 13k below). WA must file a Form 1042-S for A and complete it as follows. Caution: Be sure to read the instructions for each box or field in its entirety before completing a box or field on Form 1042-S. WA must provide a unique form identifier in the applicable entry field at the top of Form 1042-S. For additional information, including unique form identifier requirements, see Unique Form Identifier, earlier. Box Description Required Entry Comments 1 Income code "28" WA enters "28" (Gambling winnings), which is the appropriate two-digit code from the list of income codes provided in Appendix A. 2 Gross income "10,000" WA enters the gross amount paid (in whole dollars), including withheld tax. 3 Chapter indicator "3" WA enters "3" to indicate that amounts were withheld pursuant to chapter 3. 3a Chapter 3 exemption code "00" WA enters "00" because an amount was withheld under chapter 3 and the tax rate is greater than zero and is not due to backup withholding (see the instructions for boxes 3a and 4a, earlier). 3b Chapter 3 tax rate "30.00" WA enters "30.00" consistent with the formatting specified in the instructions for boxes 3b and 4b, earlier. 4a Chapter 4 exemption code "16" WA enters "16" (excluded nonfinancial payment), which is the appropriate two-digit code from the list of Exemption Codes provided in Appendix B. 4b Chapter 4 tax rate "00.00" WA enters "00.00" because the amount reported in box 2 is not subject to chapter 4 withholding. See the instructions for boxes 3b and 4b, earlier. 5 Withholding allowance WA leaves box 5 blank because the income code it is reporting in box 1 is not one of the codes specified in the instructions for which box 5 reporting is required. See the instructions for box 5, earlier. 6 Net income WA leaves box 6 blank because it did not enter an amount in box 5. 7a Federal tax withheld "3,000" WA enters "3,000" (30% of $10,000). 7b Check if federal tax withheld was not deposited with the IRS because escrow procedures were applied WA does not check the box because it is not using the escrow procedure. 7c Check if withholding occurred in subsequent year with respect to a partnership interest WA does not check the box because it did not withhold in a subsequent year. 8 Tax withheld by other agents WA leaves box 8 blank because tax was not withheld by other withholding agents. 9 Overwithheld tax repaid to recipient pursuant to adjustment procedures WA leaves box 9 blank because it did not repay overwithheld tax to the recipient under the reimbursement procedure or the set-off procedure. For more information, see the instructions for box 9, earlier. 10 Total withholding credit "3,000" WA enters "3,000" (combining boxes 7a, 8, and 9). 11 Tax paid by withholding agent (amounts not withheld) WA leaves box 11 blank because it withheld on the payment to the recipient (as opposed to paying the tax from its own funds). For more information, see the instructions for box 11, earlier. 12a Withholding agent's EIN Specific information required Although WA's EIN is not specified in this example, this is a required field that WA must complete. 12b–c Withholding agent's chapter 3 and chapter 4 status codes "15" and "02" WA enters "15" in box 12b and "02" in box 12c because it is a U.S. corporate withholding agent that is not a financial institution. Note: WA must enter both a chapter 3 and a chapter 4 withholding agent status code regardless of the type of payment being reported.

# Appendix D (continued)

Box Description Required Entry Comments 12d Withholding agent's name "ABC Casino" WA must enter its complete name. 12e Withholding agent's GIIN WA leaves this box blank because a U.S. withholding agent is generally not required to obtain a GIIN. See Global intermediary identification number and Box 12e, earlier, for details. 12f Withholding agent's country code "US" WA enters "US" as the country code because it is a U.S. withholding agent. See the instructions for box 12f, earlier. 12g Withholding agent's FTIN, if any WA leaves this box blank because it is a U.S. withholding agent and it does not have an FTIN or a country of residence other than the United States. 12h–m Withholding agent's address Specific information required Although WA's address is not specified in this example, this is a required field that WA must complete. See Boxes 12d Through 12m, earlier, for requirements. 13a Recipient's name "A" WA enters the recipient's name. 13b Recipient's country code Specific information required Although the recipient's country of residency is not specified in this example, this is a required field that WA must complete. See the instructions for box 13b, earlier, for requirements. 13c–h Recipient's address Specific information required Although the recipient's address is not specified in this example, this is a required field that WA must complete. See Boxes 13c through 13h, earlier, for requirements. 13i Recipient's U.S. TIN, if any The recipient's U.S. TIN is not specified in this example. However, given the facts used in this example, the recipient's U.S. TIN is generally not required because A is not a type of recipient described in the instructions for boxes 13i and 13l, earlier, for which this TIN is required (for example, A is not claiming a reduced rate of, or exemption from, tax under a tax treaty between the recipient's country of residence and the United States). However, WA must enter the recipient's U.S. TIN if WA knows it or if it was provided to WA on a Form W-8. 13j Recipient's chapter 3 status code "16" WA enters chapter 3 status code "16" (individual), which is the appropriate two-digit code from the list of chapter 3 status codes provided in Appendix B. Note: A withholding agent must enter a chapter 3 status code for all "amounts subject to reporting under chapter 3." 13k Recipient's chapter 4 status code WA is not required to provide the chapter 4 status code of the recipient, given that the payment being reported is not a withholdable payment. Note: A withholding agent must enter a chapter 4 status code for the recipient only if the payment is a withholdable payment or when a participating FFI or registered deemed-compliant FFI is reporting a chapter 4 withholding rate pool of U.S. payees. 13l Recipient's GIIN WA leaves box 13l blank because it only applies for chapter 4 reporting purposes. See Global intermediary identification number and the instructions for boxes 13i and 13l, earlier. 13m Recipient's FTIN, if any The recipient's FTIN is not required because A is not a type of recipient described in the instructions for box 13m, earlier, for which the FTIN is required. 13n LOB code WA leaves box 13n blank because the recipient is an individual (not an entity). 13o Recipient's account number WA leaves box 13o blank because WA is not a financial institution. 13p Recipient's date of birth WA leaves box 13p blank because WA is not a financial institution. 14a–b Primary withholding agent's information WA leaves these boxes blank because tax was not withheld by other withholding agents. 15a–m Intermediary information WA leaves these boxes blank because WA is making a direct payment to the recipient and there are no other withholding agents. 16a–e Payer's information WA leaves these boxes blank because WA is making a direct payment to the recipient and there are no other payers involved. 17a–c State income taxes Although not specified in this example, WA enters in these boxes any information relating to any state income tax withheld.