A 1042-S is a year-end federal tax document given to a non-resident alien who:
Received wages exempted from federal and state tax withholding by a tax treaty; and/or
Received a non-qualified taxable scholarship (Any amounts received for incidental expenses or by a non-degree candidate are taxable scholarships. Incidental expenses include room and board, travel, and expenses for equipment and other items that are not required for either enrollment or for attendance, or in a course of instruction).
The 1042-S has an income code, which describes the type of income being reported. In certain cases, you may receive a W-2 in addition to a 1042-S. The form is typically mailed at the same time as the W-2. The 1042S will be postmarked no later than March 15.
Form 1042-S Explained (Foreign Person’s U.S. Source Income Subject to Withholding)
Form 1042-S Explained (Foreign Person’s U.S. Source Income Subject to Withholding)
Box 1: Income Code – This two-digit income code identifies the appropriate income source:
16 – Scholarship or Fellowship Grants 17 – Compensation for Independent Personal Services 20 – Pay for Individuals whose immigration purpose is Studying and Training 54 – Other Income
Box 2: Gross Income – Entire Amount of the Payment
Box 3: Chapter 3– If checked, amounts were reported under chapter 3 of the IRS Code
Box 3a: Exemption Code – Reason for the Exemption Code.
02 – Exempt under IRS Code 04 – Exempt under Tax Treaty
Box 3b: Tax Rate – Withholding rate based on type of Income
Box 4: Chapter 4 – If checked, amounts were reported under chapter 4 of the IRS Code
Box 4a: Exemption Code – Reason for the Exemption Code
14 – Effectively connected income 15 – Payee not subject to chapter 4 withholding
Box 5: Withholding Allowance – Personal exemption amount, if applicable
Box 6: Net Income – Generally left blank, unless Box 5 is used.
Box 7: US Federal tax withheld – The total dollar amount of federal income tax withheld from amounts credited to you that were considered income.
Box 9: Total withholding credit -not applicable to MBU
Box 10 Total Witholding Credit– The total dollar amount of federal income tax withheld and paid to the IRS on your behalf
Box 13b Country code – The country of which the recipient claims residency under that country’s tax laws.
Box 13e Recipient’s U.S. TIN, if any – U.S. taxpayer identification number
