Beyond Form 1042 Compliance: International Withholding Requirements
Ensure you are in compliance with the filing deadlines and withholding tax deposit requirements related to Form 1042-S.
Most organizations have procedures in place to correctly and efficiently report certain payments to U.S. persons on Form 1099. However, far fewer organizations are as familiar with the process of reporting certain payments to foreign persons on Form 1042-S. The complexity involved in reporting payments to foreign persons is far greater. While a U.S. person would provide the same W-9 regardless of entity or payment type, a foreign person could provide one of several W-8s (e.g., W-8BEN, W-8BEN-E, W-8ECI) or even a Form 8233. In addition, the type of payments reportable may depend upon sourcing (foreign or U.S.), and the determination to withhold may depend upon an income tax treaty.
Lack of adequate documentation and analysis can result in the payer of income being liable for the 30% withholding tax in addition to penalties and interest. This topic will help the persons responsible for payments to foreign persons navigate the myriad of W-8s available for documenting a payee as a foreign person. This material will help identify the type of payments reportable on Form 1042, including a broad overview of the sourcing rules which determine if a payment is U.S. or foreign source.
The material will also provide guidance on determining if the payee should withhold on the payment and, if so, what is the proper withholding rate. This includes the role of income tax treaties. Finally, the information will discuss filing deadlines related to Form 1042-S, withholding tax deposit requirements, and any penalties and interest related to lack of compliance.
Who should attend?
This live webinar is designed for
- tax managers
- tax preparers
- presidents and vice presidents
- purchasing professionals
- enrolled agents
- accounts payable professionals
- exporters and attorneys
Imposition of Withholding on FDAP Income
- 881 Discussion
- Brief Discussion of 882 ECI and Differences From FDAP
- 1441 and 1442 Discussion
- Status of Income Recipient (Resident vs. Nonresident; Individual vs. Entity, Substantial Presence Test)
Sourcing of FDAP Income
- Compensation for Services
- Other Income and Payments
- Requirements to Qualify and Residence
- Beneficial Rates on FDAP Income
- LOB Provisions
Special Rules for Partnership Withholding
- General Withholding of FDAP Income
- Lag Method Reporting Requirement (Distributive Share of FDAP Withholding When K-1 Provided vs. Due Date)
- Withholding of ECI From Foreign Partners of Domestic Partnerships
- Foreign Partnerships – Withholding Agent/Withholding Statement Issues
- Forms 8804, 8805, and 8813
- W-8 Forms
- E-File Requirements
- Failure to File
- Late Filing
Certification / Credits
- You will be able to explain the implication of income tax treaties on U.S. withholding.
- You will be able to identify U.S. source payments that are subject to withholding.
- You will be able to recognize reportable payments to foreign parties by U.S. companies.
- You will be able to review Forms 1042, 1042-S, and W-8.
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