On Form 1042-S, the Chapter 3 Status Code (Box 12) and Chapter 4 Status Code (Box 13i) are used to identify the recipient’s status under two distinct withholding regimes:
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Chapter 3 → Nonresident Alien Withholding (IRC §§1441–1443)
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Chapter 4 → FATCA (Foreign Account Tax Compliance Act)
These codes are essential for:
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Determining withholding rates
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Completing the IRS e-file submission
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Complying with due diligence and documentation rules
Chapter 3 Status Codes (Box 12)
| Code | Status Description |
|---|---|
| 01 | U.S. Withholding Agent |
| 02 | U.S. Branch |
| 03 | Disregarded Entity |
| 04 | Territory Financial Institution |
| 05 | Qualified Intermediary (QI) |
| 06 | Nonqualified Intermediary (NQI) |
| 07 | Withholding Foreign Partnership (WP) |
| 08 | Withholding Foreign Trust (WT) |
| 09 | Nonwithholding Foreign Partnership |
| 10 | Nonwithholding Foreign Trust |
| 11 | Foreign Corporation |
| 12 | Foreign Individual |
| 13 | Government (Foreign) |
| 14 | International Organization |
| 15 | Foreign Central Bank of Issue |
| 16 | Foreign Tax-Exempt Organization |
| 17 | Private Foundation |
| 18 | U.S. Tax-Exempt Organization |
| 19 | Unknown Recipient |
| 20 | U.S. Branch Treated as U.S. Person (for Chapter 3) |
Chapter 4 Status Codes (Box 13i)
| Code | Status Description |
|---|---|
| 01 | U.S. Withholding Agent |
| 02 | Participating FFI |
| 03 | Reporting Model 1 FFI |
| 04 | Reporting Model 2 FFI |
| 05 | Registered Deemed-Compliant FFI |
| 06 | Certified Deemed-Compliant FFI |
| 07 | Owner-Documented FFI |
| 08 | Nonparticipating FFI |
| 09 | Excepted FFI |
| 10 | Passive NFFE |
| 11 | Active NFFE |
| 12 | Direct Reporting NFFE |
| 13 | Sponsored Direct Reporting NFFE |
| 14 | Certified Deemed-Compliant Sponsored FFI |
| 15 | Exempt Beneficial Owner (e.g., governments, int’l orgs) |
| 16 | Excepted Inter-Affiliate FFI |
| 17 | Territory Financial Institution |
| 18 | Nonreporting IGA FFI |
| 19 | U.S. Branch Treated as U.S. Person (for Chapter 4) |
Tips for Filing Correctly
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Use Chapter 3 codes based on residency and treaty eligibility (e.g., 12 for individuals, 11 for foreign corporations).
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Use Chapter 4 codes based on FATCA classification under Form W-8 documentation.
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For entities: Both status codes are often required, especially for intermediaries or foreign entities.
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Avoid code 19 (unknown) unless absolutely necessary—it may trigger withholding at 30% and IRS scrutiny.
Conclusion
Filing Form 1042-S accurately depends heavily on assigning the correct Chapter 3 and Chapter 4 status codes. These codes drive withholding responsibilities and inform the IRS of the recipient’s tax classification under U.S. law.