Who needs to file Form 1042
If you have had to issue Forms 1042-S to report income and tax withheld under chapter 3 or 4, then you need to file Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.
How do you file Form 1042
- Electronically
Electronic filing of Form 1042 is required for
- a withholding agent that is a financial institution
- withholding agents that are required to file 10 or more information returns during the year or that is a partnership with more than 100 partners.
- On paper
Important: Withholding agent that are not financial institutions with fewer than 10 informational returns needed to be filed for a year can mail Form 1042 instead.
How to generate Form 1042 in Sprintax
Important: Before you proceed to file your form 1042, please make sure all 1042-S forms are generated and information is accurate.
Administrators with permission Generate 1042 can prepare the form and administrators with E-File Form 1042 can e-file it.
1. Login to your Sprintax account.
2. Head to Form 1042-S List
3. Click on E-file
4. Click Generate under 1042
- Verify Withholding Agent's information:
All fields will be fillable including the withholding agent's contact information and if you need to make correction just for Form 1042, you can make the changes directly in the fields, otherwise you can make correction in Account Data.
2. Complete the liability per period table
Important: Tax liability on a withholdable payment is calculated based on the date the payment was made and needs to be entered under the period within which the date falls. If there are multiple payments made during the same period, please enter the sum the liability from all payments and enter the total.
3. After the liability per period is entered, please proceed to the rest fields for Form 1042 and complete where necessary. You can refer to Form 1042 Instructions for more information.
Income Section
| No. of Forms 1042-S filed on paper | 0 by default, but can be changed |
| No. of Forms 1042-S filed electronically | Total count (users and vendors) of forms prepared |
Income total amounts derive from the generated 1042-S forms. If you need to make adjustments, please edit the fields.
Tax Withheld or Paid Section
Tax withheld or paid amounts derive from the generated 1042-S forms. If you need to make adjustments, please edit the fields.
Computation of Tax Due or Overpayment section
Enter tax under Chapter 3 and Chapter 4 as well as other adjustments.
Tax Deposits made towards 1042-S Tax Liability
Please, enter the tax deposits totals made to the IRS.
Tax Due or Overpayment
If Total net tax liability reported equals the total amount of the federal tax deposited and/or carried forward from the previous year, field Total payments, then Form 1042 is in 0 balance.
If the Total net tax liability reported is less than the Total payments field, then Form 1042 would indicate an overpayment and you will have the selection to choose between receiving a refund or to credit it forward to the next year:
In case you'd like to claim the overpayment as a refund, you'll be asked to provide Routing number and Account number. You'll also be prompted to choose between Checking or Savings account.
If the Total net tax liability reported is more than the Total payments field (total tax for the year is more than the deposited federal tax), then Form 1042 would indicate a balance due:
Section 2 Reconciliation of Payments of U.S. Source FDAP Income
Fields will be pre-populated with information from the 1042-S forms. Please, update if and where necessary.
Section 3 Potential Section 871(m) Transactions
Select if applicable.
Section 4, Payments by Qualified Derivatives Dealer (QDD)
Select if applicable.
Third Party Designee
If you wish to grant permission to someone to call the IRS and inquire about the 1042 Form status, please provide Third Party Designee information.
Form 1042 Signing Persons Details
Please, provide information for signing person.
For Paid Preparer Use Only
After you have finished completing the form, make sure to have the box checked and click Generate.
You'll see the following warning message, to continue, please press Generate again.
You will receive a notification once Form 1042 PDF is ready for download in Calculus and your email. The notification will contain a hyperlink to download the 1042 Form, review and save for your records.
How to e-file Form 1042 in Calculus
Once the 1042 Form is generated it is ready to be e-filed. The admin who has the rights to e-file the form can click on the E-file button and then E-file in the right-hand panel.
Alternatively, you can click on the link in the notification:
In the following pop-up, please complete Business and Signing officer's details:
Important: The business and signing officers can be different or the same person.
Important: The self-selected PIN is a unique 5-digit PIN you need to assign when you e-file your Form 1042. If you have previously e-filed Form 1042 you can re-use the same PIN.
Important: Signing Officer SSN isn't mandatory. Form 1042 can be e-filed without it. The IRS warns, however, if the SSN is missing processing of Form 1042 may take longer.
After clicking on E-File you will be taken to place your signature for Form 8879:
You can place your signature with your computer mouse, e-pen or other tools and click I agree and you will close Form 8879 pop-up. Click on the E-file button again to e-file Form 1042.