Form 1042
IRS annual return for US withholding on payments to non-resident persons.
Definition
Form 1042 is the annual return filed by US withholding agents reporting US tax withheld on FDAP and other US-source payments to non-residents. Companion to Form 1042-S (recipient-level reporting).
Context
Withholding agents are US persons making payments to non-residents. Operating LLC founders are typically recipients, not withholding agents.
Example
Google AdSense (as withholding agent) files Form 1042 annually reporting total US tax withheld on all non-resident recipient payments.
Common pitfalls
- Withholding agents face strict liability for under-withholding.
- Form 1042 deadline is March 15.