1042 S

[xjag2003]

I received a 1042 S yesterday much to my surprise.  This is the first time that I'm getting this.  The tax document referred to a CD I opened with the bank back in Dec 2022.  I am a permanent resident here and have been working and living in the US for the last 20 plus years.  I read up on 1042 S online and it stated that this applies to only non-resident alien and other foreign people. I called the bank today and after much discussion, they appeared to be unsure about how to handle 1042 S.  Since they sent me 1042 S, I'm quite sure the same tax document also went IRS.  I was about to efile my taxes when I got the 1042 S.  What should I do with this 1042S? 

[DawnC]

You can report the 1042-S as Other reportable income:

1. Open or sign in to your return in TurboTax 
2. Click on Federal - Wages & Income 
3. Scroll down to the bottom of the list; you may need to click on Add More Income
4. Scroll down to and expand the Less Common Income area. 
5. Click Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C  (last item in the list)
6. Click Start next to Other reportable income (last item in the list)
7. Answer Yes
8. Enter a description (1042-S; for CD from xxxx Bank) and the amount and click Continue

If your 1042-S has withholding/US tax paid, enter that amount as follows:

1. Sign in or open your return
2. Click on Deductions & Credits
3. Scroll down to and expand the Estimates and Other Taxes Paid section
4. Click Start next to Income Taxes Paid
5. Scroll down Other Income Taxes Paid
6. Click Start next to Withholding not already entered on a W-2 or 1099 (first item in the list)

The form is for nonresident aliens but sometimes financial institutions send out the wrong forms.   See IRS page Foreign Source Income paid to Nonresident Alien

[xjag2003]

Thank you for your feedback. My bank statement did not reflect the interest earned. The bank told me that since the CD is maturing in 2024, the interest income has not been realized. How is the  bank reporting this as gross income earned in the last 4 days in Dec 2022 when this doesn’t show up on my CD account on my online statement. My main concern is that 1042 S is for non citizen and non resident alien. As stated earlier , I’m a permanent resident. I’ve been filing my taxes regularly in 1044. The bank told me just to ignore the 1042S. I told them since a copy has been sent to the IRS, it has muddy the water and cause confusion. Should the bank rectify the mistake they made?

[DaveF1006]

If you have documentation or proof from the bank that this reporting is erroneous, then repeat the first series of steps that Dawn C provided above. When you get to other reportable income, then record an entry below the first entry you made and enter a description such as Bank Mistake and enter the same amount as you recorded on the previous line but place a minus sign before the amount. 

If the IRS should happen to question this, just mention to them that the bank issued this 1042S by mistake because your CD had not matured thus the interest income had not or should have been realized. 

As far as the bank taking responsibility for this, good luck with that. Since the 1042S has already been sent in, it is difficult to rectify the mistake. already made.

@xjag2003