The IRS recently published the 2025 version of Form 1042-S and its accompanying instructions. Form 1042-S is used to report income earned by non-resident aliens and withholding applied to said income. NOTE: This is the version of the form and instructions applicable to tax year 2025 reporting, NOT an update to the 2024 version of the form due during calendar year 2025.
There were several impactful updates including the addition of a new box (Box 7d) and several added and updated reporting codes. These updates include, but are not limited to the following:
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New Box 7d. A new checkbox has been added to indicate a Form 1042-S is being filed to revise an amount subject to withholding in a withholding rate pool to report to a specific recipient. These would apply primarily to qualified intermediaries, withholding foreign partnerships, or withholding foreign trusts making revisions of this type;
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New chapter 3 status code 40 (added for QDD partnership);
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New chapter 3 status code 41 (for U.S. government entity or tax-exempt entity);
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Note. This code is only applicable for providing the chapter 3 status of the withholding agent on box 12b.
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New income codes 59 (Consent Fees), 60 (Loan Syndication Fees, and 61 (Settlement Payments). The IRS indicates in the instructions these will be optional for use in tax year 2025 reporting;
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New process for requesting extension of time to furnish recipient statements: filers must use IRS Form 15397, Application for Extension of Time to Furnish Recipient Statements, to request a maximum 30-day extension of time to furnish recipient statements. This form must be faxed to the IRS Technical Services Operations line at (877) 477-0572;
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Country codes: “US” is now a valid country code entry in box 12f or 13b;
Note: Current instructions only require that a chapter 3 exemption code be reported when there is no tax withheld due to an exemption pursuant to the Code or an income tax treaty. The IRS intends to update the instructions for calendar year 2026 to require that a chapter 3 exemption code (or code for a reduced withholding tax rate) be provided in all cases where the tax withheld is less than 30%.
To review the 2025 Form 1042-S, click here. To review the form instructions, click here.
