What changes will apply in 2024?

• Effective for payments and withholding made in 2023, withholding agents (i.e., U.S. persons who make payments) are required to file Form 1042 via an XML schema through MeF.
• The IRS has not offered any relief on this filing requirement to date.

What about submission and transmitter documentation?

• The Form 8453-WH declaration is used to authenticate the electronic 1042, authorize an electronic return originator (ERO) or intermediary service provider (ISP) to submit via a third-party transmitter and provide consent to withdraw funds due on the Form 1042. This is mailed to the IRS within three business days after receiving notice that the IRS has accepted the electronically filed tax return.
• The Form 8879-WH is used by a withholding agent and an ERO when the withholding agent wants to use a personal identification number (PIN) to electronically sign a return and, if applicable, consent to electronic funds withdrawal. This is not sent to IRS and needs to be stored by an ERO for three years.
• Both the 8453-WH and 8879-WH may be electronically signed.

Can I still send paper tax returns 1042 to the IRS?

• The IRS is no longer accepting Forms 1042 via paper submission. However, you may submit a written request to the IRS for a temporary dispensation and wait to receive a response.

Do I need credentials to file through the MeF?

• The IRS requires an ID.me account to access the MeF application. Users must register and sign in with ID.me to access the e-Services suite of online applications.
• ID.me is an account created, maintained and secured by a technology provider and you can access the e-Services webpage to register for credentials.

What are the benefits of using MeF?

IRS Publication 4163 highlights the benefits of using MeF for filing:

• Plain English explanations in the Acknowledgement File pinpoint the location of any error(s) in the return and provide complete information.
• Transmissions are processed upon receipt, and acknowledgments are returned in near real-time.
• Refunds can be electronically deposited in bank accounts, and balance due payments can be electronically withdrawn from bank accounts.
• There is a capability to attach and file supporting forms and schedules.
• MeF enables transmitters to send data to the IRS year-round, except for a short cutover period at the end of the calendar year.
• Taxpayers may file directly or use a third-party practitioner who can use the PIN.

Support from S&P Global Market Intelligence Tax Solution

S&P Global Market Intelligence Tax Solution offers Form 1042 XML schema together with the submission and transmission packages to support your filing requirements for tax return Form 1042. Please contact mk-taxsolutions@spglobal.com for more information.

S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.