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provide the documentation required under

Payments of pensions, annuities, and

1. If at the end of any quarter-monthly

chapter 4 to determine the account

certain other deferred income paid to a

period the total amount of undeposited

holder’s status or to enable the FFI to

foreign person are subject to withholding

taxes is $2,000 or more, you must deposit

report the account as a U.S. account. See

under section 1441 (rather than section

the taxes within 3 business days after the

Regulations section 1.1471-5(g).

3405). Report these payments on Forms

end of the quarter-monthly period. (A

1042 and 1042-S.

quarter-monthly period ends on the 7th,

Passive non-financial foreign entity

15th, 22nd, and last day of the month.) A

(NFFE). A passive NFFE is a nonfinancial

Use Schedule H (Form 1040),

business day is any day other than a

foreign entity other than an excepted

Household Employment Taxes, to report

Saturday, Sunday, or legal holiday in the

NFFE, including a WP, WT, QI, or direct

income tax withheld and social security

District of Columbia.

reporting NFFE. See Regulations sections

and Medicare taxes on wages paid to a

2. If at the end of any month the total

1.1471-1(b)(80) and 1.1472-1(b).

nonresident alien household employee.

amount of undeposited taxes is at least

For chapter 4 purposes an

$200 but less than $2,000, you must

Election To Withhold

intermediary must provide its

deposit the taxes within 15 days after the

Under Section 3406

chapter 4 status to a withholding

end of the month. If you make a deposit of

CAUTION

agent to determine whether withholding

$2,000 or more during any month except

If you are a Participating FFI that has

applies to the payment. Thus, a chapter 4

December under rule 1, earlier, carry over

made an election to withhold under

status must be provided for a withholdable

any end-of-the-month balance of less than

section 3406 instead of withholding under

payment made to a foreign entity.

$2,000 to the next month. If you make a

chapter 4, use Form 945 to report tax

deposit of $2,000 or more during

withheld on a withholdable payment that is

Where and When To File

December, any end-of-December balance

also a reportable payment made to any of

of less than $2,000 should be remitted

your recalcitrant account holders that are

Mail Form 1042 by March 15, 2018, to:

with your Form 1042 by March 15, 2018.

also U.S. nonexempt recipients subject to

backup withholding. Also, use Form 945 to

3. If at the end of a calendar year the

Ogden Service Center

report tax withheld on a withholdable

total amount of undeposited taxes is less

P.O. Box 409101

payment that is also a reportable payment

than $200, you may either pay the taxes

Ogden, UT 84409

made to recalcitrant account holders of a

with your Form 1042 or deposit the entire

participating or registered

amount by March 15, 2018.

Use Form 1042-T to transmit paper

deemed-compliant FFI that is an NQI,

Forms 1042-S.

Electronic deposit requirement. You

NWP, or NWT or a QI that elects to be

Extension of time to file. If you need

must make electronic deposits of all

withheld upon under section 1471(b)(3),

more time to file Form 1042, you may

and from whom you received a

depository tax liabilities using EFTPS. If

submit Form 7004, Application for

you fail to use EFTPS, you may be subject

withholding statement that indicates that

Automatic Extension of Time To File

to a 10% penalty. To enroll in or get more

such FFI has elected for withholding under

Certain Business Income Tax, Information,

information about EFTPS, call

section 3406 to apply instead of

and Other Returns.

800-555-4477 or visit

withholding under chapter 4 with respect

to one or more recalcitrant account

eftps.gov/eftps.

Form 7004 does not extend the time for

holders. See Regulations section

payment of tax.

Depositing on time. For deposits

1.1471-4(b) and 1.1474-1(d)(4)(i)(B). A

made by EFTPS to be on time, you must

Additional Information

withholding QI, WP, or WT that is an FFI

initiate the deposit by 8 p.m. Eastern time

should also use Form 945 if it elects to

For details on the withholding of tax, see

the day before the date the deposit is due.

withhold under section 3406 on

Pub. 515. You can get Pub. 515 by

If you use a third party to make deposits

withholdable payments made to certain

downloading it from IRS.gov. Click on

on your behalf, they may have different

recalcitrant account holders.

“Forms and Pubs” and then on

cut-off times.

“Publication Number.”

Deposit Requirements

Same-day wire payment option. If you

fail to initiate a deposit transaction on

Need Assistance?

You are required to use the Electronic

EFTPS by 8 p.m. Eastern time the day

Federal Tax Payment System (EFTPS),

If you need help completing Form 1042,

before the date a deposit is due, you still

discussed later, to deposit the tax withheld

call 267-941-1000 (not a toll-free number)

can make your deposit on time by using

and required to be shown on Form 1042

from 6:00 a.m. to 11:00 p.m. Eastern time

the Federal Tax Collection Service

(regardless of whether withholding was

or write to:

(FTCS). If you ever need the same-day

applied under chapter 3 or 4 or with

wire payment method, you will need to

respect to a specified federal procurement

Internal Revenue Service

make arrangements with your financial

payment).

International Section

institution ahead of time. Check with your

Philadelphia, PA 19255-0725

To avoid a penalty, do not mail

financial institution regarding availability,

your deposits directly to the IRS.

deadlines, and costs. Your financial

Income Tax Withholding

institution may charge you a fee for

CAUTION

on Wages, Pensions,

payments made this way. To learn more

The amount of tax you are required to

about the information you will need to

Annuities, and Certain

withhold determines the frequency of your

provide to your financial institution to make

deposits. The following rules explain how

Other Deferred Income

a same-day wire payment, visit

eftps.gov

often deposits must be made.

to download the Same-Day Payment

Use Form 941, Employer’s QUARTERLY

Worksheet.

Federal Tax Return, to report income tax

Note. If you are requesting an extension

withheld and social security and Medicare

of time to file using Form 7004, follow

Note. All payments should be made in

taxes on wages paid to a nonresident

these rules to see if you must make a

U.S. dollars.

alien employee.

deposit of any balance due or if you can

Escrow procedure. See instructions for

pay it with Form 7004. See Form 7004 and

lines 1 through 60, later, if you are using

its instructions for more information.

Instructions for Form 1042 (2017)

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Instructions For Form 1042 - Annual Withholding Tax Return For U.s. Source Income Of Foreign Persons - 2016 Page 3

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