- The official name is “Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.”
- Its purpose is to report withholding taxes on certain U.S. source income paid to foreign persons under Chapter 3 and Chapter 4 of the Internal Revenue Code, as well as certain procurement payments (Section 5000C) when applicable.
- It’s a withholding agent’s return, not one that the foreign recipient files. The foreign recipients generally get Form 1042-S (and sometimes Form 1042-T for transmittal) showing their specific payments and tax withheld.
Who Must File Form 1042
You must file Form 1042 if you are a withholding agent (U.S. or foreign) who:
- Has control, receipt, custody, disposal, or payment of U.S. source fixed or determinable annual or periodic (FDAP) income (or withholdable payments) to foreign persons.
- Withholds (or is required to withhold) under Chapter 3 or Chapter 4 on such payments.
- Makes payments that are reported on Form 1042-S (so if you file 1042-S, you likely must also file 1042).
- Receives certain federal procurement payments to foreign persons subject to withholding under section 5000C.
From the IRS:
“Every withholding agent, whether U.S. or foreign, must file Form 1042 and Form 1042-S to report payments of amounts subject to NRA withholding and chapter 4 reportable amounts, unless an exception applies.”
The “unless an exception applies” part means some payments may be exempt or excluded (e.g. wages reported on W-2, payments already reportable on other forms).
If you file Form 1042-S, do you in all cases also need to file Form 1042?
Yes.
- The IRS instructions for Form 1042-S explicitly state: “If you file Form 1042-S, you must also file Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.”
- The IRS “Who Must File / Returns Required” page reiterates: “If you are required to file Form 1042-S, you must also file Form 1042.”
- The “Discussion of Form 1042, 1042-S, 1042-T” document also frames them as a set: the 1042 is the summary withholding return, while 1042-S reports by recipient/income type.
So broadly: yes, filing 1042-S triggers the obligation to file 1042 (unless another specific exception applies, but none general for that).