Form 1042, the Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, is filed by every withholding agent or intermediary that pays amounts subject to withholding to foreign persons. It's due March 15 of the year after the payments. If you file any Form 1042-S, you must also file Form 1042, even when no tax was withheld.
Think of the two together: Form 1042-S reports each payment to each foreign recipient, and Form 1042 is the annual total and reconciliation of the tax you withheld and deposited. Everything below comes from the IRS 2025 instructions for Form 1042, as of October 2026.
Who must file Form 1042
- You're required to file, or do file, any Form 1042-S for chapter 3 or 4, whether or not tax was withheld.
- You file Form 1042-S to report tax withheld by your withholding agent to a recipient.
- You pay gross investment income to foreign private foundations subject to tax under section 4948(a).
- You pay a foreign person specified federal procurement payments subject to section 5000C withholding.
- A publicly traded partnership or nominee distributes effectively connected income under section 1446.
A withholding agent is any U.S. or foreign person that has control, receipt, custody, disposal or payment of an amount subject to withholding. It can be an individual, a company, a partnership, a trust or a government body, and as the withholding agent you're liable for the tax, along with interest and any penalties, if you don't withhold.
The insight people miss
The filing requirement follows the 1042-S, not the tax. A small business that pays a foreign contractor or licensor and correctly withholds nothing under a treaty may still have to file a 1042-S, and that alone brings in Form 1042. The instructions also say to file Form 1042 even if you file your 1042-S forms electronically. Treaty-exempt doesn't mean filing-exempt. Collecting the right W-8BEN or W-8BEN-E is what supports the treaty rate in the first place.
Due date and extensions
| Item | Rule |
|---|---|
| Paper filing | Mail by the 15th day of the 3rd month after the calendar year, March 15 |
| Weekend or holiday | File by the next business day |
| Extension | Form 7004 gives an automatic extension of time to file |
| Payment | Form 7004 doesn't extend the time to pay the tax |
Who must file electronically
Electronic filing of Form 1042 has applied since tax year 2023. It's required for a withholding agent that's a financial institution, for withholding agents required to file 10 or more information returns during the year, and for partnerships with more than 100 partners.
Deposit rules for withheld tax
You don't wait for March to pay over the tax. The instructions set deposit rules based on how much undeposited tax you're holding, as of October 2026:
| Undeposited tax | When to deposit |
|---|---|
| $2,000 or more at the end of a quarter-monthly period | Within 3 business days after the end of that period. Periods end on the 7th, 15th, 22nd and last day of the month |
| At least $200 but less than $2,000 at the end of a month | Within 15 days after the end of the month |
| Less than $200 at the end of the year | Pay with Form 1042, or deposit by March 15 of the following year |
If you deposit $2,000 or more during a month other than December under the first rule, you carry any month-end balance under $2,000 over to the next month. A December balance under $2,000 after such a deposit is paid with Form 1042 by March 15. Deposits are made electronically, through EFTPS or IRS Direct Pay.
How Form 1042 ties to your 1042-S forms
- Collect withholding certificates from each foreign payee before you pay.
- Withhold at the statutory or treaty rate and deposit on the schedule above.
- Issue a Form 1042-S to each recipient for the year.
- On Form 1042, report the total tax liability by period, the deposits made and the totals from your 1042-S forms; the amount of tax reported should match the sum of box 8 of all the 1042-S forms where that applies.
- File by March 15, or extend with Form 7004 and still pay by March 15.
One return, not several
The instructions caution you to file only one Form 1042, consolidating all your Forms 1042-S, regardless of the number of clients, branches, divisions or types of income you're the withholding agent for. A separate return is only needed if you act in more than one capacity, such as a qualified intermediary for some accounts. If you find a mistake after filing, the form has an amended return box, and you attach an explanation of why you're amending.
Overwithholding and refunds
If you withheld too much, you can adjust it using the reimbursement or set-off procedures, generally where the overwithholding is discovered by March 15 of the following year. New direct deposit lines let you have any refund paid straight into a checking or savings account.
Where to send it
Paper returns go to the Internal Revenue Service, P.O. Box 409101, Ogden, UT 84409, by March 15. If you're required to file electronically, a paper return doesn't meet the requirement, so check whether you're over the 10-return line before you post anything. The same instructions cover where to send payment if you have a balance due, and the IRS recommends paying electronically.
Want AI doing the heavy lifting in your marketing?
I build the systems that handle the boring 80 percent, so you get your week back. Done properly, with the human kept in.
Help from the IRS
The instructions give a number for help with Form 1042, 267-941-1000, which isn't toll-free, and Pub. 515 covers withholding of tax on nonresident aliens and foreign entities in detail.
The verdict
If you pay any foreign person U.S.-source income, assume Form 1042 applies until you've proved it doesn't. File it every year you issue a 1042-S, deposit withheld tax on time, and remember that an extension to file isn't an extension to pay. The penalties land on the withholding agent, not the foreign payee.
Frequently asked questions
What is Form 1042?
It's the Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, filed by withholding agents that make payments subject to withholding to foreign persons.
When is Form 1042 due?
By March 15 of the year after the payments, or the next business day if that falls on a weekend or legal holiday.
Do I file Form 1042 if no tax was withheld?
Yes, if you're required to file or do file any Form 1042-S, whether or not tax was withheld.
Can I get an extension for Form 1042?
Yes. Form 7004 gives an automatic extension of time to file, but it doesn't extend the time to pay the tax.
What is the difference between Form 1042 and 1042-S?
Form 1042-S reports payments and withholding for each foreign recipient. Form 1042 is the annual return that totals and reconciles the tax for the year.
