IRS provided updates on the instructions to Form 1042-S

The U.S Internal Revenue Service (IRS) on 9 January 2020 released an update on the 2019 instructions for Form 1042-S.

The updates on the instructions for form 1042-S considers the changes resulting from the proposed Regulations Reducing Burden Under FATCA and Chapter 3 (83 FR 64757).

The updates are intended to supplement

• Box 7c - Check if withholding occurred in subsequent year with respect to a partnership interest, and

• Box 9 - Overwithheld tax repaid to recipient pursuant to adjustment procedures

The update introduce also the revised backup withholding tax rate of 24% for 2019. The reduced tax rates is a result of “The Tax Cuts and Jobs Act” (Public Law 115-97).

Forms 1042-S must be submitted to the IRS and also to the recipients of the income by March 16, 2020.