The 1042-S Reporting Information (1042I) table stores the name and mailing address information for foreign vendors who are subject to Form 1042-S reporting. A record must be entered on this table for any individual or company that is eligible for 1042-S reporting. As the 1099 Reporting Information (1099I) table is the primary reference table for Taxpayer Identification Number information, records added to 1042I require that the TIN/TIN Type were already set up on the 1099I table.
While the 1099I table contains mailing information that is used on 1099 forms, 1042I also contain mailing address information, which is used by the 1099 process to populate the mailing address on the 1042-S forms. The mailing information on the 1042I page is not inferred from the 1099I page; instead you must enter the mailing address for 1042-S reporting separately on 1042I. The IRS strongly recommends that 1042-S forms be sent to the vendor’s foreign address (home country) and not their US Address, which is the address that is stored on 1099I.
Even though 1042I table may have additional name fields, these field values are not used elsewhere for reporting. In the current 1042-S form, it does not allow for additional names. If entered, it will provide additional information only. Also on this table, you may specify the LOB code for the taxpayer as needed. When specified, it will be inferred to the 1042-S Reported Income page when records are inserted.
The following fields on 1042I enables you to validate the US address on 1042I and allows 1042-S taxpayers with US address to print and transmit their data without the IRS Transmittal file being rejected by the IRS:
US Address Indicator
Recipient Address Country Code
The US Address Indicator field validates whether it is a US or foreign address and transmits the Country Code value to the F1042S table. If it is a US address, it will not print Country Code Name in the mailing address and Country value on F1042S and it will not be transmitted and vice-versa.
If the US Address Indicator flag is not selected and a US address is entered on the Recipient Address Country Code field, then the system issues an error upon the save action on 1042I. Similarly, if the US Address Indicator flag is selected and a US address is not entered on the Recipient Address Country Code field, then the system issues an error upon the save action on 1042I.
The US Address Indicator and Recipient Address Country Code fields also exist on the Vendor/Customer Creation (VCC) and Vendor/Customer Modification (VCM) transactions.
If the US Address Indicator flag is not selected and a user tried to enter US/USA in the Recipient Address Country Code field in the 1042-S Reporting Information tab of the VCC/VCM transactions, the system will issue an error upon the validate/submit action of the transactions.
The 1042-S Backup Withholding Status field indicates if a specific TIN is eligible for 1042-S backup withholding. The value must be set manually on 1042I table. Valid values for this field are: Blank, Pending, and Not Eligible:
Blank – (default) – The taxpayer will have 1042-S withholding taken if other criteria have been satisfied. The disbursement transaction will use rates from 1042-S Income Code/Ch. 3 Tax Rate (ICTX) or 1042-S Income Code/Ch. 4 Tax Rate (ICTX4) if available. If not available, it will use the tax rates from 1099 Processing Options and Control (1099P).
Pending – The taxpayer has not provided all pertinent tax information and therefore 1042-S withholding will be taken at either the 1042-S Backup Withholding rate or the 1042-S Ch. 4 Tax Rate on 1099P. The rates on ICTX/ICTX4 will not be used since the taxpayer’s setup is still pending.
Not Eligible – The taxpayer shall not have 1042-S withholding taken even if the associated Income Code/Country is eligible for withholding.