Form 1042-S Instructions: Line-by-Line Filing Guide 2026

Form 1042-S contains the following main sections:

• Boxes 1-2: Income type code and gross income amount
• Boxes 3-4: Chapter 3 and Chapter 4 exemption codes and tax rates
• Boxes 5-6: Withholding allowances
• Box 7: Federal tax withheld
• Boxes 8-11: Withholding agent information
• Box 12: Withholding agent's Chapter 4 status
• Boxes 13-17: Recipient information and status codes
• Boxes 18-21: Intermediary and NQI information
• Boxes 22-24: State reporting information

Enter the two-digit code identifying the type of income paid. Common income codes include:

Use a separate Form 1042-S for each type of income paid to the same recipient.

Enter the total gross income paid to the foreign person before any withholding or deductions.

• Report the full amount paid, not the net amount after withholding
• Use U.S. dollars; convert foreign currency using appropriate exchange rates
• For dividends, report gross dividends without reduction for foreign taxes
• For compensation, report total wages before any deductions

Box 3a: Chapter 3 Exemption Code - Enter the two-digit code explaining why withholding is reduced or exempt under Chapter 3:

• 00: Not exempt (30% withholding applies)
• 01: Income exempt under IRC (e.g., portfolio interest)
• 02: Exempt under tax treaty
• 03: Income is not from U.S. sources
• 04: Exempt under IRC (various provisions)
• 05: Portfolio interest exempt under IRC Section 881(c)

Box 3b: Tax Rate - Enter the withholding rate applied (e.g., "30.00" for 30%, "15.00" for 15% treaty rate).

Box 4a: Chapter 4 Exemption Code - Enter the two-digit FATCA exemption code:

• 00: Not applicable or not a withholdable payment
• 01: Payee is a U.S. person
• 02: Payee not subject to withholding under Chapter 4
• 03: Effective connected income
• 04: Exempt per treaty
• 13: Exempt recipient (foreign government, etc.)
• 14: Payee is participating FFI
• 15: Payee is registered deemed-compliant FFI

Box 4b: Tax Rate - Enter the Chapter 4 withholding rate if applicable.

Enter the total federal income tax withheld from the gross income reported in Box 2.

• This amount should equal Box 2 multiplied by the applicable withholding rate(s)
• If no tax was withheld (due to exemption or treaty), enter 0.00
• Report total withholding from both Chapter 3 and Chapter 4
• Do not include state tax withheld here (report in Box 24)

Enter the withholding agent's identifying information:

• Box 8: Withholding agent's EIN (Employer Identification Number)
• Box 9: Withholding agent's name
• Box 10: Withholding agent's Global Intermediary Identification Number (GIIN) if applicable
• Box 11: Country code of the withholding agent

The withholding agent is the U.S. person who pays the income and withholds the tax.

Identify the withholding agent's status for FATCA purposes:

• Box 12a: Chapter 4 status code (e.g., U.S. withholding agent, participating FFI, etc.)
• Box 12b: GIIN if the withholding agent is an FFI
• Box 12c: Country code

Enter the foreign recipient's identifying information:

• Box 13a-g: Recipient's Chapter 3 and Chapter 4 status codes
• Box 13h: Recipient's GIIN (if applicable)
• Box 13i: Recipient's foreign TIN
• Box 13j: LOB code (Limitation on Benefits provision code)
• Box 14: Recipient's name
• Box 15: Recipient's country code
• Box 16: Recipient's address
• Box 17: Recipient's U.S. TIN (if any)

Recipient status codes are critical for proper reporting. Common codes include "01" for individual, "02" for corporation, "03" for partnership, etc.

For state tax reporting:

• Box 22: State code (two-letter abbreviation)
• Box 23: State identification number
• Box 24: State income tax withheld

Complete these boxes only if state income tax was withheld from payments to the foreign recipient.