Form 1042-S Explained (Foreign Person's U.S. Source Income Subject to Withholding)

1042-S

Box 1:  Income Code - This two digit income code identifies the appropriate income source:

            12 – Other Royalties (i.e. copyright, recording, publishing)
            16 – Scholarship or Fellowship Grants
            17 – Compensation for Independent Personal Services
            19 – Pay for Individuals whose immigration purpose is Teaching and/or Research
             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

Box 9:  Total withholding credit - not applicable to CWM

Box 10 Amount repaid to recipient - not applicable to CWM

Box 14 Recipient's U.S. TIN, if any - U.S. taxpayer identification number

Box 16 Country code - The country of which the recipient claims residency under that country’s tax laws.

Box 23 State income tax withheld - State income tax withheld from payments