IRS updates specifications for filing Form 1042-S electronically

The IRS has updated the specifications for the electronic filing of Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. The new guidance includes numerous editorial changes from earlier guidance. Generally, the boxes on the paper forms do correspond with the fields used for the electronic file, however; if the form and field instructions do not match, the guidance in this publication supersedes the form instructions.

Electronic reporting of information returns eliminates the need to submit paper documents to the IRS. Do not send copies of paper forms to the IRS for any forms filed electronically as this will result in duplicate filing. The FIRE System can accept multiple files for the same type of return. For example, if a company has several branches issuing Forms 1042-S, it is not necessary to consolidate all the forms into one transmission. Each file may be sent separately. Do not transmit duplicate data.

What’s new?

• The specifications have been updated to incorporate the new Foreign Account Tax Compliance Act (FATCA) reporting requirements of chapter 4 of the Internal Revenue Code (“chapter 4”). Please review all sections of the publication, giving special attention to Part C. Record Format Specifications and Record Layout.

• The record length of each record has been increased from 820 to 1020 positions to accommodate new reporting fields.

• The publication should be used in conjunction with the following forms and publications: Form 1042-S, http://www.irs.gov/pub/irs-pdf/f1042s.pdf, Foreign Person’s U.S. Source Income Subject to Withholding, Instructions for Form 1042-S, http://www.irs.gov/pub/irs-pdf/f1042s.pdf, Foreign Person’s U.S. Source Income Subject to Withholding, Publication 515, http://www.irs.gov/pub/irs-pdf/p515.pdf, Withholding of Tax on Nonresident Aliens and Foreign Entities, and Publication 1179, http://www.irs.gov/pub/irs-pdf/p1179.pdf,General Rules and Specifications For Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns.

• The publication was updated to reflect the current reporting four digit reporting year, 2014.

• FIRE Production System is down from 6 p.m. (Eastern) December 12, 2014 through January 19, 2015, for yearly updates.

• FIRE Test System is available for Form 1042-S testing from January 5, 2015 to February 20, 2015. The FIRE Test System will be down from 6 p.m. (Eastern) December 12, 2014 through January 4, 2015, for yearly updates.

• FIRE Production and Test Systems may be down every Wednesday from 2:00 a.m. to 5:00 a.m. (Eastern) for programming updates.

• Electronic filing requirement for financial institutions. Beginning January 1, 2014, financial institutions that are required to report payments made under chapter 3 (and chapter 4 for payments made after June 30, 2014) must electronically file Forms 1042-S (regardless of the number of forms to be filed). See Regulations section 301.1474-1. (IRS Pub. 1187, Rev. 7-2014.)

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