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DRAFT 2021 Form 1042-T Posted!

On August 17, 2021, the Internal Revenue Service posted a DRAFT 2021 Form 1042-T. Although the form itself has not changed, the instructions include a few key updates:

– Caution for filing electronically. There is a cautionary note to review instructions for Form 1042-S for the electronic filing requirements for Form 1042-S. This is in place of the actual electronic filing requirements listed in the instructions on the 2020 Form 1042-T. Remember, the rules for filing electronically have been evolving and will continue to evolve, so be sure to stay current.

– Updates and additions regarding partnerships. The 2021 instructions on Form 1042-T include 16 instead of 12 possible types of Form 1042-S that may be transmitted. Each type requires a separate Form 1042-T. The 16 possible types now include:

o Chapter 4, original, pro rata (no change)

o Chapter 4, original, non-pro rata (no change)

o Chapter 4, amended, pro-rata (no change)

o Chapter 4, amended, non-pro rata (no change)

o (UPDATED) Chapter 4, original, pro rata, partnership

o (UPDATED) Chapter 4, original, non-pro rata, partnership

o (UPDATED) Chapter 4, amended, pro rata, partnership

o (UPDATED) Chapter 4, amended, non-pro rata, partnership

o Chapter 3, original, pro rata (no change)

o Chapter 3, original, non-pro rata (no change)

o Chapter 3, amended, pro rata (no change)

o Chapter 3, amended, non-pro rata (no change)

o (UPDATED) Chapter 3, original, pro rata, partnership

o (UPDATED) Chapter 3, original, non-pro rata, partnership

o (UPDATED) Chapter 4, amended, pro rata, partnership

o (UPDATED) Chapter 4, amended, non-pro rata, partnership

As always, have a look at your U.S. federal tax and information reporting systems to confirm updates for the 2021 tax year. If using vendor solutions, check in with them to be sure they have the latest updates. See the DRAFT Form 1042-T here: https://www.irs.gov/pub/irs-dft/f1042t–dft.pdf

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This document contains general information only and is not a substitute for accounting, tax, or any other professional advice or services. The information provided is considered accurate at the time of publishing and will not be updated with new regulation requirements.

Comply Connect May 2024 – Issue 11

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