Tax compliance is essential for businesses and financial institutions making payments to foreign persons. Among the key IRS forms required for such reporting are Form 1042 and Form 1042-S. Understanding their deadlines is crucial to avoiding penalties and ensuring smooth compliance.
What is Form 1042?
Form 1042 refers to the Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. It is filed by withholding agents who make payments subject to U.S. withholding tax, such as interest, dividends, royalties, or other fixed or determinable income to foreign individuals or entities.
- What information is reported in Form 1042?
U.S. source income paid to foreign persons & tax withheld on the payment. - Who Files It?
Withholding agents, including businesses and financial institutions.
Click here to view the step-by-step instructions to complete the 1042 forms.
What is Form 1042-S?
Form 1042-S is an information return used to report income paid to foreign persons, including non-resident aliens, foreign corporations, and other foreign entities. It is also used to report tax withheld on certain income, such as wages, scholarships, fellowships, and other types of income paid to foreign individuals or entities.
- Who needs to file Form 1042-S?
Any withholding agent (such as businesses, financial institutions, or individuals) who makes payments to foreign persons subject to U.S. withholding tax. - What information is required to report in Form 1042-S?
Form 1042-S requires details like the recipient’s name, address, income type, tax withholding rate, amount paid, and the withholding agent’s information.
Form 1042 Deadline 2025
Generally, the due date for filing Form 1042-S with the IRS is March 15th of the calendar year the income was paid. If March 15th falls on a weekend or legal holiday, the due date is the next business day.
Need an extension?
- For 1042-S form:
Filers can request an extension using Form 8809, which provides an additional 30-day extension. - For 1042 form:
Withholding agents can request an extension of up to 6 months by submitting Form 7004 before the due date.
The deadline to File Form 1042 is March 17, 2025
| Form | Description | E-filing Deadline | Extension |
|---|---|---|---|
| 1042-S | Reports income subject to U.S. withholding tax | March 17, 2025 | Form 8809 |
| 1042 | Reports tax withheld on payments to foreign persons | March 17, 2025 | Form 7004 |
Penalties for Late Filing
The penalty for late filing Form 1042-S depends on the time of submission and size of the business.
| Timeframe | Penalty per Form | Maximum Penalty per Year (per business type) |
|---|---|---|
| Filed within 30 days after the due date | $60 | $683,000 per year ($239,000 for a small business) |
| Filed after 30 days but by August 1 |
$130 |
$2,049,000 per year ($683,000 for a small business) |
| Filed after August 1 or not filed at all |
$330 |
$4,098,500 per year ($1,366,000 for a small business) |
Meeting IRS deadlines for Forms 1042 and 1042-S can be complex, but e-filing solutions like Tax1099 streamline the process. With automated filing, bulk uploads, and compliance checks, you can avoid penalties and ensure timely submissions.
