Form 1042-S Explained (Foreign Person's U.S. Source Income Subject to Withholding)
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 W&M
Box 10 Amount repaid to recipient - not applicable to W&M
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
