Common Reporting Errors for 1099 & 1042-S Forms

Common Form 1099 and Form 1042-S Reporting Errors

Many institutions have experienced and continue to experience 1099 and 1042-S form rejections and errors in our 1042 electronic files are transmitted for reporting.

TAINA has put together some of the most common 1099 and 1042-S reporting errors, causes, and potential solutions for addressing some of the reasons for rejected files.

What is Form 1099?

Form 1099 is used to report payments made to non-employee individuals or entities including independent contractor income and payments like gambling winnings, rent, royalties and more. Different types of 1099 forms exist to document payments made between an individual or business and another party, for example Form 1099-K, Form 1099-MISC, 1099-NEC.

1099 Tax forms must be provided to the recipient by January 31 and filed with the IRS by February 28 (March 31, if filing electronically).​

What is Form 1042-S?

Form 1042-S is an information return filed by a withholding agent to report income paid to foreign persons, including non-resident alien (NRA), foreign corporations, and other foreign entities.It is also used to report tax withheld on certain income, such as wages, scholarships, fellowships, and other types of income paid to foreign individuals or entities. This is refered to by the IRS as “Amounts Subject to NRA Withholding and Reporting.”

The deadline for filing Form 1042-S with the IRS is March 15th of the year following the calendar year in which payment was made.

What is Form 1042?

Form 1042 is an Annual Withholding Tax Return submitted by withholding agents to report tax withheld on certain income of foreign persons. Details provide , may include:

• Withholding tax liabilities,
• Deposits for non-resident alien (NRA) withholding under IRC Sections 1441 through 1443
• Foreign Account Tax Compliance Act (FATCA) withholding under IRC Sections 1471 through 1473.

Form 1042 must be filed with the IRS by March 15th of the year following the calendar year in which payment was made.  Withholding agents that have filed a six-month extension will have a September 15, 2024 deadline.

At TAINA we continue to monitor the reporting landscape. To find out more information on the 1099 and 1042-S reporting errors download the whitepaper below or, get in touch with us today.