Who needs to file Form 1042
If you have had to issue Forms 1042-S to report income and tax withheld under chapter 3 or 4, then you need to file Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.
How do you file Form 1042
- Electronically
Electronic filing of Form 1042 is required for
- a withholding agent that is a financial institution
- withholding agents that are required to file 10 or more information returns during the year or that is a partnership with more than 100 partners.
- On paper
Important: Withholding agent that are not financial institutions with fewer than 10 informational returns needed to be filed for a year can mail Form 1042 instead.
How to generate Form 1042 in Calculus
Important: Before you proceed to file your form 1042, please make sure all 1042-S forms are generated and information is accurate.
Administrators with permission Generate 1042 can prepare the form and administrators with E-File Form 1042 can e-file it.
1. Login to your Calculus account.
2. Head to Form 1042-S List
3. Click on E-file
4. Click Generate under 1042
You will have 2 options to choose from:
- I want to use Calculus data to complete Form 1042
- I want to complete Form 1042 with data collected outside Sprintax Calculus
Option 1 - I want to use Calculus data to complete Form 1042
If you have generated your 1042-S forms through PEM the 1042-S tax liability calculated per deposit periods table will be filled in with the amounts as per the payments in PEM - date and current 1042-S liability calculated. If you have imported the 1042-S data (for users and/or vendors) you will need to fill in the table manually.
Important: Tax liability on a withholdable payment is calculated based on the date the payment was made and needs to be entered under the period within which the date falls. If there are multiple payments made during the same period, please enter the sum the liability from all payments and enter the total.
Important: Withholding Agent's data is taken from Account Data. If you need to make corrections to the contact information, you can make it in Account Data and it will be reflected in the Form 1042 screen as well.
Please, review if the information is correct and continue to the next fields.
Totals:
| No. of Forms 1042-S filed on paper | 0 if you have selected in 1042-S settings that you would submit the forms electronically |
| No. of Forms 1042-S filed electronically | Total count (users and vendors) of forms prepared |
| Total U.S. source FDAP income reported | The total (rounded) gross income amount from all 1042-S forms |
| Total tax reported as withheld or paid | The total (rounded) federal income tax withheld amount reported on all 1042-S forms |
| Total net tax liability | The total liability as per "1042-S tax liability calculated per deposit periods" table |
| Tax credited from prior year 2024 | If you had an overpayment on your 2024 Form 1042 and chose to forward it as a credit towards 2025, please indicate the amount in this field |
| Total tax deposited in 2025 against tax liability in 2025 | The total amount of federal tax deposited for 2025 during 2025 year with the IRS |
| Total tax deposited in 2026 against tax liability in 2025 | The total amount of federal tax deposited for 2025 during 2026 year, if any, with the IRS (for example payment in January 2026 for December 2025 period) |
| Total payments | The total payments amount (will be calculated automatically) |
If Total net tax liability equals the total amount of the federal tax deposited and/or carried forward from the previous year, field Total payments, then Form 1042 is in 0 balance.
If the Total net tax liability is less than the Total payments field, then Form 1042 would indicate an overpayment and you will have the selection to choose between receiving a refund or to credit it forward to the next year:
In case you'd like to claim the overpayment as a refund, you'll be asked to provide Routing number and Account number. You'll also be prompted to choose between Checking or Savings account.
Important: From this year, IRS is implementing refunds to be direct deposited into a bank account as a default option instead of sending a check. If no bank account information is provided, refunds may take longer to process and the IRS may send an alert notifying you of the missing banking information and outline the next steps if you are due a refund.
For more information, please see Questions and answers about Executive Order 14247.
If the Total net tax liability is more than the Total payments field (total tax for the year is more than the deposited federal tax), then Form 1042 would indicate a balance due:
After you have finished completing the form, make sure to have the box checked and click Generate.
You'll see the following warning message, to continue, please press Generate again.
You will receive a notification once Form 1042 PDF is ready for download in Calculus and your email. The notification will contain a hyperlink to download the 1042 Form, review and save for your records.
Option 2 - I want to complete Form 1042 with data collected outside Sprintax Calculus
If you wish to complete Form 1042 from scratch and/or you wish to unlock all 1042 fields for editing, please choose option I want to complete Form 1042 with data collected outside Sprintax Calculus.
- All fields will become fillable with this option, including the withholding agent's contact information and if you need to make correction just for Form 1042, you can make the changes directly in the fields, otherwise you can make correction in Account Data.
2. Complete the liability per period table
Important: Tax liability on a withholdable payment is calculated based on the date the payment was made and needs to be entered under the period within which the date falls. If there are multiple payments made during the same period, please enter the sum the liability from all payments and enter the total.
3. After the liability per period is entered, please proceed to the rest fields for Form 1042 and complete where necessary. You can refer to Form 1042 Instructions for more information.
Important: Please, refer to the table above for explanation of the fields mandatory to be completed.
The additional fields mandatory for Form 1042 to be accepted by the IRS (completed manually when you choose Option 2):
| Total net tax liability under chapter 3 | Should equal total net tax liability (if all tax is reportable under Chapter 3, i.e. non-financial payments) |
| Amount of excluded nonfinancial payments | Should equal Total U.S. source FDAP income reported (if all payments are reportable under Chapter 3, i.e. non-financial payments) |
Third Party Designee
If you wish to grant permission to someone to call the IRS and inquire about the 1042 Form status, please provide Third Party Designee information.
Form 1042 Signing Persons Details
Please, provide information for signing person for Form 1042.
For Paid Preparer Use Only
After you have finished completing the form, make sure to have the box checked and click Generate.
You'll see the following warning message, to continue, please press Generate again.
You will receive a notification once Form 1042 PDF is ready for download in Calculus and your email. The notification will contain a hyperlink to download the 1042 Form, review and save for your records.
How to e-file Form 1042 in Calculus
Once the 1042 Form is generated it is ready to be e-filed. The admin who has the rights to e-file the form can click on the E-file button and then E-file in the right-hand panel.
Alternatively, you can click on the link in the notification:
In the following pop-up, please complete Business and Signing officer's details:
Important: The business and signing officers can be different or the same person.
Important: The self-selected PIN is a unique 5-digit PIN you need to assign when you e-file your Form 1042. If you have previously e-filed Form 1042 you can re-use the same PIN.
Important: Signing Officer SSN isn't mandatory. Form 1042 can be e-filed without it. The IRS warns, however, if the SSN is missing processing of Form 1042 may take longer.
After clicking on E-File you will be taken to place your signature for Form 8879:
You can place your signature with your computer mouse, e-pen or other tools and click I agree and you will close Form 8879 pop-up. Click on the E-file button again to e-file Form 1042.