The IRS recently released the 2024 Instructions for Form 1042 (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons). There are several impactful changes:
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E-file requirements. For most filers, the administrative exemption from the 1042 electronic filing requirement has expired. For 2024 1042 returns filed in 2025, electronic filing is required for 1) financial institutions 2) taxpayers that file ten or more information returns of any kind during the year 3) partnerships with more than 100 partners. Withholding agents that are foreign persons are administratively exempt from the electronic filing requirement for tax year 2024 returns filed in 2025.
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Due date. The due date for the 2024 1042 falls on Monday March 17, 2025, two days later than last year.
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Credit Forward Framework. The credit forward framework may not be used after December 31, 2024. Withholding agents using the credit forward framework before September 11, 2024 may continue to do so through December 31, 2024.
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Dividend equivalents. Notice 2024-44 provides a two-year extension for certain transitional relief from the final regulations for dividend equivalents under section 871(m).
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Amendments by QI, WP, or WT. Amendment instructions have been added to the guide specifically for QIs, WPs, and WTs.
The 2024 Instructions for Form 1042 can be found here.
