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Release Notes

This is the Early Release of 1042-S Pro for 2015.
*Please refer to IRS instructions for full detail of 2015 changes (http://www.irs.gov/pub/irs-pdf/i1042s.pdf)

NEW:

  • 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. 

UPDATED: 

  • 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

FORM CHANGES: 

  • 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. 

 

References: 

Publication 1187 see http://www.irs.gov/pub/irs-pdf/p1187.pdf

2014 1042-S Instructions:  http://www.irs.gov/pub/irs-pdf/i1042s.pdf

Publication 515 Withholding on Tax on Nonresident Aliens and Foreign Entities http://www.irs.gov/pub/irs-pdf/p515.pdf 

www.irs.gov/fatca

 

Excerpt from the IRS re: What's New

Name and EIN of primary withholding agent. Beginning in calendar year 2015, for withholding agents that report amounts withheld by another withholding agent (in box 8), Form 1042-S requires reporting of the name and EIN of the withholding agent that withheld the tax (in boxes 14a and 14b). This information was optional for 2014 but is required for amounts paid in 2015 and subsequent years.

Substitute Forms. Withholding agents that furnish a substitute Form 1042-S to the recipient must furnish a separate substitute Form 1042-S for each type of income or payment. Withholding agents are no longer permitted to combine all income and payments on a single substitute Form 1042-S and all fields on the substitute form must match the copy filed with the IRS. Any substitute forms must comply with the rules set out in Pub. 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, W-2G, and 1042-S. A substitute of Form 1042-S, Copy A, must be an exact copy of Form 1042-S, Copy A. If it is not, the form may be rejected as incorrect and the IRS may impose penalties. For more information, see Substitute Forms, later.
Account-by-account reporting for U.S. financial institutions. For amounts paid on or after January 1, 2016, a U.S. financial institution will be required to report payments of the same type of income (as determined by the Income code in box 1) made to multiple financial accounts held by the same beneficial owner on separate Forms 1042-S for each account.
Expired tax provisions. On page 8, the section pertaining to “Withholding on Dispositions of U.S. Real Property Interests by Publicly Traded Trusts and Qualified Investment Entities (QIEs)” has been amended in accordance with the termination provision of section 897(h)(4) (A)(ii). In the past, Congress has extended the applicability of section 897(h)(4)(A)(i)(II). You can find out whether legislation has extended the applicability of this section at www.irs.gov/form1042s.
List of foreign country codes.  The list of foreign country codes has been removed from these instructions. Filers must now use the list of country codes at IRS.gov. A list of foreign countries with which the United States has an income tax treaty is also available at IRS.gov. If more information concerning these lists becomes available after these instructions are published, it will be posted at www.irs.gov/form1042s

Download v2014.10.20

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