Who needs to file Form 1042.

The ‘Form 1042 Series’ is a set of IRS forms used to disclose information regarding withheld taxes on payments made to foreign individuals and businesses. Often, this includes payments to intergroup entities such as dividends, interest, royalties, or other payments to non-US persons. 

Who needs to file:

If you are a US registered corporation or other structure electing to be taxed as a corporation, you are required to withhold tax from payments made to foreign entities or individuals. Hence, please consider if your corporations have made any of the following payments (or similar) during 2024:

• Dividends – payments from a US corporation to non-US shareholders (whether individuals or corporations);

• Interest payments – such as payments made to associated corporations in relation to an intergroup loan;

• Royalties – payments made to a non-US entity for the use of a brand’s intellectual property; or

• Contractors or Employees – such as when a US corporation has paid foreign independent contractors or employees.

If any such payments were made and withholding occurred, you may be required to file a Form 1042 (and associated attached forms).

When must you file:

Similarly to 1099s, Form 1042 is based on the calendar year, regardless of the corporation’s elected tax year end. Therefore, all businesses need to file before 15 March 2025, unless an extension is submitted.

How to File: 

Dualis International LLP can support you with the filing of 1042s. please enquire for more information.