This is the Early Release of 1042-S Pro for 2014.
*Please refer to IRS instructions for full detail of 2014 changes (http://www.irs.gov/pub/irs-pdf/i1042s.pdf)
- Optional FATCA Form 8966 add-on module available for purchase (please contact us for pricing)
- Form boxes has been added and modified to accommodate reporting of payments and amounts withheld under FATCA.
- GIIN validation is processed upon import
- Email encrypted PDF's of forms directly from the software to recipients
- Service Bureau addition of IMB mail tracking for standard form types
- Streamlined Service Bureau upload process with e-Signatures
- Many optimization and cosmetic changes have been made.
- Built in reports updated with new changes.
- All default maps and sample import files have been updated.
- Print layouts for all form types have been updated.
- All help files have been updated for 2014
- New Chapter 3 and Chapter 4 sections.
- New GIIN fields added.
- Re-numbed boxes for 2014.
- New boxes added for 2014.
- Box 14b Tax Country will accept the two character abbreviation or the spelling or the Alias:
- HK or Hong Kong
What’s New? A highlight of some of the new 2014 requirements for form 1042-S
Note the changes and modifications listed below is not a comprehensive listing and is subject to change. We strongly recommend that you have your legal and accounting departments research these new reporting requirements.
Electronic filing requirement for financial institutions. Beginning January 1, 2014, financial institutions that are required to report payments made under chapters 3 or 4 must electronically file Forms 1042-S (regardless of the number of forms to file).
Many new fields including new fields dealing with Chapter 4 requirements.
Be sure to format your Recipient EINs as ##-#######, SSN’s as ###-##-#### and unknown as ######### on import or during manual entry.
VERY IMPORTANT - In addition a new required field not shown on the form or instructions is the “Recipient’s U.S.TIN Type” with acceptable values of 0 thru 4 as shown in Publication 1187 on page 51 pertaining to the Q record, position 358. It is your responsibility to populate this form when manually adding a form or upon import. The IRS has provided this guidance for this field:
- 0 = No TIN required
- 1 = SSN/ITIN
- 2 = EIN
- 3 = QI-EIN, WP-EIN, WT-EIN -
- Note: Use EIN indicator 3 only if the Withholding Agent’s EIN begins with “98” and the Withholding Agent, Withholding Trust, or Withholding Partnership has entered into a withholding agreement with the IRS.
- 4 = TIN required but not provided
- NOTE: During a Roll Forward from prior year tax data, if you roll over Recipient Information, 1099 Pro will default the new “Recipient TIN Type Code” field required by the IRS on forms 1042-S as follows. Blank/Missing TIN = “0 - No TIN required”, SSN = “1 – SSN/ITIN”, EIN = “2 – Standard EIN”. Please carefully review that your recipients and their respective TIN Type Codes are correct after the roll has been completed.
If you do not populate this form on import then 1099 Pro fill in the values as per the below:
- 1099 Pro will never fill a value of 0 = No TIN required in this field. Only you can populate this value.
- 1099 Pro will fill a value of 1 = SSN/ITIN if your recipient TIN is formatted ###-##-####
- 1099 Pro will fill a value of 2 = EIN –if your recipient TIN is formatted as ##-#######
- 1099 Pro will never fill a value of 3 = QI-EIN, WP-EIN, WT-EIN. Only you can populate this value NOTE: Use EIN indicator 3 only if the Withholding Agent’s EIN begins with “98” and the Withholding Agent, Withholding Trust, or Withholding Partnership has entered into a withholding agreement with the IRS.
1099 Pro will fill a value of 4 = TIN required but not provided if your TIN is not formatted, blank or missing. NOTE: during a Roll Forward from prior year tax data, if you roll over Recipient Information, please review your recipients that their Recipient TIN Code is correct after the roll has been completed. During a Roll Forward from prior year tax data, if you roll over Recipient Information, 1099 Pro will default the new “Recipient TIN Type Code” field required by the IRS on forms 1042-S as follows:
- Blank/Missing TIN = “0 - No TIN required”
- SSN = “1 – SSN/ITIN”
- EIN = “2 – Standard EIN”
- Blank/Missing/Unformatted TIN "4 TIN required but not provided"
Please carefully review that your recipients and their respective TIN Type Codes are correct after the roll has been completed.
New & changed Income Codes, Exemption Codes and Recipient Codes
Be sure to check all of the new codes as there are many new codes and code changes. For example:
Income codes now go up to 51
Note Recipient Codes have drastically changed, including but not limited to the below:
- 01 last year meant Individual but now it designates U.S. Withholding Agent – FI
- 02 last year meant Corporation and now it designates U.S. Withholding A
gent – Other
Notes regarding your imports:
Required: one and only one Box 3 Chap 3 Chk pr Box 4 Chap 4 Chk must be checked
“Rcp TIN Type” is not needed if your recipient TINs are formatted as XXX-XX-XXXX or XX-XXXXXXX If you use this field a 1 means one dash = EIN and a 2 means two dashes = SSN and zero or blank for unknown. Note this 0/1/2 schema differs from the required “Box 13g TIN Code” discussed on this page.
And many, many other changes.
Publication 1187 see http://www.irs.gov/pub/irs-pdf/p1187.pdf
Publication 515 Withholding on Tax on Nonresident Aliens and Foreign Entities http://www.irs.gov/pub/irs-pdf/p515.pdf
Excerpt from the IRS re: What's New
Foreign Account Tax Compliance Act (FATCA). The Form 1042-S for 2014 has been modified to accommodate reporting of payments and amounts withheld under the provisions commonly known as FATCA or Chapter 4 of the Internal Revenue Code (chapter 4) in addition to those amounts required to be reported under Chapter 3 of the Internal Revenue Code (chapter 3). Form 1042-S requires the reporting of an applicable exemption to the extent withholding under chapter 4 did not apply to a payment of U.S source fixed or determinable annual or periodical (FDAP) income (including deposit interest) that is reportable on Form 1042-S. When a financial institution reports a payment made to its financial account, Form 1042-S also requires the reporting of additional information about a recipient of the payment, such as the recipient's account number, date of birth, and foreign taxpayer identification number, if any. For withholding agents, intermediaries, flow-through entities, and recipients, Form 1042-S requires that the chapter 3 status (or classification) and, when the payment reported is a withholdable payment, the chapter 4 status be reported on the form according to codes provided in these instructions. See these instructions for a description of any further changes to the 2014 Form 1042-S. For the requirement of a withholding agent to file a Form 1042-S for chapter 4 purposes, see Regulations section 1.1474-1(d).
For withholding agents that report amounts withheld by another withholding agent, Form 1042-S requests the name and EIN of the withholding agent that withheld the tax. This information is optional for 2014.
Publication 515 (cited in these instructions) has not been updated as of the date of publication of these instructions to include the withholding and reporting provisions of chapter 4.