Tax Statement Corrections to a 1042-S

Background

An operating location may discover incorrect information on a tax statement that already has been issued and reported to the Internal Revenue Service (IRS). A previously issued tax statement must be corrected and reported if it is determined that the information is incorrect. A new tax statement must be created and reported if it is determined that a statement was not issued when required. All corrections to tax statements, as well as the creation of statements that were never produced, are made at central office.

For more general information about types of tax statements, undeliverable statements, and the copies of statements, refer to the document Tax Statements on the Research Foundation's (RF) Web site.

Necessity for 1042-S Corrections

A 1042-S Foreign Person's U.S. Source Income Subject to Withholding tax statement can be corrected only by central office completing a corrected 1042-S (i.e., with the CORRECTED box marked), which then is reported to the IRS. Subsequent reporting (i.e., a corrected 1042-S) replaces the information originally reported to the IRS.

The following table describes some of the common reasons central office may issue a corrected 1042-S:

1042-S Error

Corrected Form and/or Communication to Taxpayer

Reason for Correction

Possible Reason(s) for the Error

Incorrect Name and/or Taxpayer Identification Number (i.e., ITIN or SSN)

1042-S with the CORRECTED box marked

Letter of explanation and copy of corrected tax statement to taxpayer if a corrected W-2 (W-2c) is involved

The IRS requires a valid Taxpayer Identification Number (TIN) when payments are paid and reported.

A valid TIN was not received prior to payment.

A system input error in HR or AP (e.g., TIN entered had less than nine digits or one or more digits from a valid number were entered incorrectly).

A statement was created and reported but shouldn't have been

1042-S with the VOID box marked

Letter of explanation and copy of corrected tax statement to taxpayer if a corrected W-2 (W-2c) is involved

The RF is required to correctly report payments of wages and miscellaneous income. The incorrect tax statement must be voided by marking the original reported 1042-S as VOID.

Incorrect payment classification (e.g., the person is not a nonresident alien fellow).

Coding error in HR and/or AP (e.g., payment type or residency determination).

Incorrect system input in the noncitizen special information type (SIT) area of HR.

Reported Gross Income Paid amount is incorrect (understated or overstated)

Original 1042-S with the VOID box marked and corrected 1042-S with the CORRECTED box marked

Letter of explanation and copy of corrected tax statement to taxpayer if a corrected W-2 (W-2c) is involved

The RF is required to report correct payments of wages and miscellaneous income. Overpayments may be returned to the RF as a category refund.

The incorrect tax statement must be voided by marking the original reported 1042-S as VOID. A new 1042-S must be created and marked CORRECTED.

Category refunds returned to RF, but 1042-S invoice distribution never corrected in AP.

Coding error in AP.

Incorrect system input in the noncitizen special information type (SIT) area of HR.

Incorrect address and zip code of taxpayer

Not Corrected

 

The RF is not required to report address changes to the IRS or SSA.

People file in the HR module and/or supplier file in the AP module not updated.

A statement was never created

1042-S

The RF is required to report payments of wages and miscellaneous income.

System input error (e.g., nonresident alien supplier coding error in AP).

Incorrect system input in the noncitizen special information type (SIT) area of HR.

Recipient’s country of residence for tax purposes incorrect

Original 1042-S with the VOID box marked and corrected 1042-S with the CORRECTED box marked

Letter of explanation and copy of corrected tax statement to taxpayer if a corrected W-2 (W-2c) is involved

The RF is required to determine residency in order to report payments of wages and miscellaneous income to both U.S. citizens and noncitizens.

The incorrect tax statement must be voided by marking the original reported 1042-S as VOID. A new 1042-S must be created and marked CORRECTED.

Missing or incorrect data in HR's Special Information Type (SIT) windows Non-Citizen Residency Info and Non-Citizen Taxation Info.

Missing or incorrect data in AP Supplier File Descriptive Flexfield.

 

Incorrect Income Code, Exemption Code, or tax rate

Original 1042-S with the VOID box marked and corrected 1042-S with the CORRECTED box marked

Letter of explanation and copy of corrected tax statement to taxpayer if a corrected W-2 (W-2c) is involved

The RF is required to determine residency in order to report payments of wages and miscellaneous income to both U.S. citizens and noncitizens.

The incorrect tax statement must be voided by marking the original reported 1042-S as VOID. A new 1042-S must be created and marked CORRECTED.

Missing or incorrect data in HR's Special Information Type (SIT) windows Non-Citizen Residency Info and Non-Citizen Taxation Info.

Missing or incorrect data in AP Supplier File.

 

1042-S Correction Procedure

The following procedure is used when operating locations need to request a correction to a person's previously issued 1042-S tax statement:

Step

Who Does It

Action

Required Documentation

1

Operation Location

Complete Request for Original or Corrected 1099 MISC or 1042-S Tax Statement (word) (pdf).

Send request to central office corporate payroll office to correct a tax statement.

 

Special Note About Nonresident Alien Employees

In some cases, a NRA employee may receive a W-2 and 1042-S tax statement, both of which will require correction. Before making a correction request, operating locations should thoroughly research which tax statements a NRA employee received.

Requests must be in writing with a detailed description of the circumstances. Requests and descriptions should be sent via email, FAX, or U.S. Postal Service.

Request

The request should include the information necessary for central office to correct the original tax statement, such as the person's name and work location (including location code), TIN, tax year requested, and the person's current mailing address.

Description

The description must be sufficient to verify that it is appropriate to issue a corrected tax statement. The description should provide how the payment was originally reported and how it should be corrected. For example, if a series of transactions was processed improperly, the details of the transactions that resulted in the error should be provided. Payment documentation supporting the corrections should also be provided, when applicable.

2

Central Office

Review request.

RF corporate payroll reviews the details of the circumstance and makes a determination if a correction or a new tax statement should be created.

3

 

Central Office

 

No tax statement correction is warranted

Notify operating locations and end this procedure.

A tax statement correction or a new tax statement is warranted

Create 1042-S forms for corrections and for statements never created. Create other types of tax statements as the situation warrants.

4

Central Office

Report tax statement corrections to taxpayer.

1042-S and/or other tax statement along with a letter of explanation (e.g., the taxpayer may need to file an amended income tax return), if a corrected W-2 (W-2c) is required.

5

Central Office

Report tax statement corrections to IRS and state and local governments.

1042-S and/or other tax statement

6

Operating Locations

Make system changes to the people file record and/or supplier file record, if required.

Change/update the Supplier File record in the AP module or the People File in the HR module, as required. For more information, refer to the following documents:

Change History

 

 

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