Guide to Global Payroll Management - 2020 - D-105

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Appendix D--Federal Forms and Instructions

* In the case of foreign joint owners,
Form 1042-S can only list one of the
owners as the recipient in Box 13a.
Form 1042-S must not be completed
with more than one of the joint owners
as the recipient.
* If the recipient is a QI acting as a
QDD with respect to the payment, enter
the name of the QDD (including any
branch identifier included on the Form
W-8IMY provided by the QDD).
* If a disregarded entity (or a branch)
that is required to provide a TIN on
Form W-8IMY is identified in Part II of
the Form W-8BEN-E, include the name
of the disregarded entity (or the
jurisdiction of the branch) in a
parenthetical after the name of the
recipient.

Box 13b, Recipient's country code.
You must enter the code (from the list at
IRS.gov/CountryCodes) for the country
of which the recipient claims residency
under that country's tax laws. Enter
"OC" (other country) only when the
country of residence does not appear
on the list or the payment is made to an
international organization (for example,
the United Nations). If the recipient is
unknown, leave Box 13b blank and
enter "Unknown Recipient" in Box 13a,
Recipient's name. If you are making a
payment to a QI, QSL, WP, or WT, or if
you are a QI, QSL, WP, or WT and are
making a payment to a QI, WP, or WT
withholding rate pool, enter the country
code of the QI, QSL, WP, or WT. Also, if
you are making a payment to a
participating FFI or registered
deemed-compliant FFI's chapter 4
reporting pool, enter the country code of
the participating FFI or registered
deemed-compliant FFI or branch of or
disregarded entity owned by such FFI
receiving the withholdable payment and
that was listed on Part II of either the
Form W-8BEN-E or W-8IMY.
If exemption code 04 (exempt
under tax treaty) appears in Box
CAUTION 3a or if a reduced rate of
withholding based on a tax treaty is
entered in Box 3b, the country code
entered in Box 13b must be a country
with which the United States has
entered into an income tax treaty.

Boxes 13c and 13d, Recipient's address. In most cases, you must enter a
foreign address in Boxes 13c and 13d.
However, there are limited exceptions.
For example, you may enter a U.S.
address when reporting payments of
scholarship or fellowship grants (income
code 16).

Instructions for Form 1042-S (2020)

For addresses outside the United
States or its commonwealths and
possessions, follow the foreign
country's practice for entering the postal
code.
For addresses within the United
States, use the U.S. Postal Service
2-letter abbreviation for the state name.
Do not enter "United States" or "U.S."
If you want to enter the recipient's
account number, use Box 13k.

Boxes 13e and 13h,
Recipient's U.S. TIN and
GIIN

You must obtain and enter a U.S. TIN
for any of the following recipients.
* Any recipient whose income is
effectively connected with the conduct
of a trade or business in the United
States. For these recipients, enter
exemption code 01 in Box 3a or
exemption code 14 in Box 4a.
* Any foreign person claiming a
reduced rate of, or exemption from, tax
under a tax treaty between a foreign
country and the United States, unless
the recipient provides a foreign TIN (in
such case, use Box 13i), or unless the
income is an unexpected payment (as
described in Regulations section
1.1441-6(g)) or consists of dividends
and interest from stocks and debt
obligations that are actively traded;
dividends from any redeemable security
issued by an investment company
registered under the Investment
Company Act of 1940 (mutual fund);
dividends, interest, or royalties from
units of beneficial interest in a unit
investment trust that are (or were, upon
issuance) publicly offered and are
registered with the Securities and
Exchange Commission under the
Securities Act of 1933; and amounts
paid with respect to loans of any of the
above securities. In the latter case, you
must use income code 13, 51, 52, 53, or
54.
* Any nonresident alien individual
claiming exemption from tax under
section 871(f) for certain annuities
received under qualified plans.
* A foreign organization claiming an
exemption from tax solely because of its
status as a tax-exempt organization
under section 501(c) or as a private
foundation.
* Any QI.
* Any WP or WT.
* Any nonresident alien individual
claiming exemption from withholding on
compensation for independent personal
services.

* Any U.S. branch of an FFI or territory
FI that is treated as a U.S. person.
* Any QSL that was paid a substitute
dividend.
In all other cases, if you know the
recipient's TIN or if a foreign person
provides a TIN on Form W-8, but is not
required to do so, you must include the
TIN on Form 1042-S.

You must include a GIIN if you are
required to collect a GIIN for the
recipient under the requirements
documenting the payee under
chapter 4. If you make a payment to a
disregarded entity or branch that is
identified in Part II of Form W-8BEN-E,
then report the GIIN of the disregarded
entity or branch provided in that section.

Boxes 13f and 13g,
Recipient's Chapter 3 and
Chapter 4 Status Codes

Enter the recipient status code from the
list of Recipient Status Codes in
Appendix B, later. The following special
instructions apply for chapter 3 status
codes.
* If income code 42 (earnings as an
artist or athlete - no central withholding
agreement) or 43 (earnings as an artist
or athlete - central withholding
agreement) is used in Box 1, use
recipient code 22 (artist or athlete)
instead of recipient code 16 (individual),
15 (corporation), or 08 (partnership
other than withholding foreign
partnership).
* If you are making a payment to an
NQI or flow-through entity, in most
cases you must use the recipient code
that applies to the type of recipient who
receives the income from the NQI or
flow-through entity.
* Use recipient code 08 (partnership
other than withholding foreign
partnership) only if you are reporting a
payment of income that is effectively
connected with the conduct of a trade or
business of a nonwithholding foreign
partnership in the United States. You
may, however, use recipient code 08 as
the chapter 3 status code if you are
using a chapter 4 pooled reporting code
with respect to a payment made to a
nonwithholding foreign partnership. See
the instructions later on use of recipient
codes when reporting pools. Otherwise,
follow the rules that apply to payments
to flow-through entities.
* Use recipient code 21 (unknown
recipient) only if you have not received a
withholding certificate or other
documentation for a recipient or you
cannot determine how much of a
payment is reliably associated with a

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Guide to Global Payroll Management - 2020

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