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littledonkey
New Member

Do I need to report my 1042-S, which has a tax exempted income?

In 2019, I claimed the U.S.-China income tax treaty, which exempted my first $5000 income from federal tax. I have received a 1042-S form showing in Box 2 (gross income) $5000, Box 3b and 4b (Tax rate) 0.00, and withhold to be 0. Basically I think this 1042-S means that I have an income of $5000, which I don't need to pay tax and my employer didn't withhold any tax. Do I still need to report this 1042-S form and how?
7 Replies
LeonardS
Expert Alumni

Do I need to report my 1042-S, which has a tax exempted income?

Yes, you will have to report your Form 1042-S income.

 

TurboTax does not include Form 1042-S.  However, Form 1042-S does not need to filed with your income tax return. Fill out Form 1042-S and then mail it to the address specified in the form instructions. 

 

The main difference between forms 1042 and 1042-S is that form 1042-S is concerned with payments made to foreign persons, while form 1042 is concerned with determining how much income will be withheld for tax withholding purposes.

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littledonkey
New Member

Do I need to report my 1042-S, which has a tax exempted income?

Thanks for your reply. But I am still confused. I have received a 1042-S form that is already filled by my employer. What should I do? There is no specific instruction on the form either.

ThomasM125
Expert Alumni

Do I need to report my 1042-S, which has a tax exempted income?

You should enter the form in TurboTax in the "Income and Expenses" section, and then "Less Common Income" and then "Miscellaneous Income" and finally "Other Reportable Income."

 

First, enter the form 1042-S as income, then make an additional entry as a negative amount for the amount of income excluded by the treaty. Thus, both amounts will cancel themselves out, so the net tax will be zero, but it will still show on your tax return that you reported both amounts.

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Bob Bobby
New Member

Do I need to report my 1042-S, which has a tax exempted income?

Hello

 

Corporate 401k provider (Fidelity) will be issuing me a 1042-S for 2019 Tax year because they said they did not have a W 9 form on file for me in 2019 (I am a Us Citizen). I Rolled over my former employer's corporate 401k to a personal IRA in 2019. 

With it there was also after-tax income that was paid out to me and the reminder was rolled into the IRA. So they are issuing me a 1042-S with codes 2 (Early distribution, exception applies (under age 59½) and G (Direct rollover of a distribution (other than a designated Roth account distribution) to a qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA.  I understand neither are taxable events. How do I complete and reflect all this in Turbo Tax?

DaveF1006
Expert Alumni

Do I need to report my 1042-S, which has a tax exempted income?

Reporting Form 1042 S is not directly supported by Turbo Tax but I can share this link with you for more information. Please select this link for further details 

 

 

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REMC11
New Member

Do I need to report my 1042-S, which has a tax exempted income?

maybe a dumb question but my wife is a citizen of Japan and legally lives in the US. We own an LLC together and a question comes up in Turbo Tax asking if payments were made to a foreign person. As 50% owner in the company she receives draws but not a paycheck. Do we need to fill out a form 1042-2?

JeffreyR77
Expert Alumni

Do I need to report my 1042-S, which has a tax exempted income?

No, draws do not fit the definition of payments. As an owner, she is entitled to draw from her company at any time.

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