Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, is issued to a nonresident alien individual, nonresident alien fiduciary, or foreign corporation if it has U.S.-sourced income. The form indicates the nature of the income as well as the amount of federal tax withheld.
Individual taxpayers who receive Form 1042-S are typically filing Form 1040-NR, U.S. Nonresident Alien Income Tax Return. You will need to make two entries in the return:
- Enter the 1042-S in its menu. The tax withholdings from this entry will flow to the tax return.
- Enter the income showing on the 1042-S in the appropriate income menu in the return. (TaxSlayer Pro doesn't carry the income from the 1042-S entry to the return since it isn't always clear from the form and the taxpayer's circumstances where it should go in the return.)
To enter Form 1042-S in the nonresident tax return (Form 1040-NR) in TaxSlayer Pro select:
- Payments, Estimates & EIC
- Other 1040NR Payment
- US Tax Withheld on Form(s) 1042-S - Select New and enter all the information on the form.
Once you have entered the 1042-S into its menu, determine the nature of the income on the form and enter the income in the appropriate income menu.
What about resident taxpayers?
Occasionally a U.S. resident filing Form 1040 will receive Form 1042-S. The taxpayer may have been a nonresident at the time the income was earned or received but became a resident since then.
There is no menu line in the resident return to enter this form, since it's a form intended for nonresident filers, so the preparer will need to examine the form to determine the nature of the income and the best place in the income menu to enter it.
The federal tax withholdings can be entered here:
- Payments, Estimates & EIC
- Other Federal Withholdings - Enter the amount in Tax Withheld from Other Forms.
The return may not be e-fileable due to this entry.