Nonresident aliens (NRAs) can claim a withholding tax credit on Form 1040-NR, U.S. Nonresident Alien Income Tax Return using the information reported on Form 1042-S.
How to Claim the Withholding Tax Credit on Form 1040-NR
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Gather Form 1042-S
- If you received U.S.-source income (e.g., wages, scholarships, dividends, royalties, or other taxable payments), your withholding agent (employer, financial institution, etc.) should provide you with Form 1042-S by March 15 of the following year.
- Box 10 of Form 1042-S shows the total U.S. federal tax withheld that you may be eligible to claim as a credit.
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Report Your Income on Form 1040-NR
- Enter the income reported on Form 1042-S in the appropriate section of Form 1040-NR (e.g., wages, scholarship income, investment income).
- Ensure the income type code (Box 1 on Form 1042-S) matches the income category on Form 1040-NR.
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Claim the Withholding Tax Credit on Form 1040-NR
- On Schedule 3, Line 12d of Form 1040-NR, enter the amount from Box 10 of Form 1042-S.
- This amount represents the U.S. tax already withheld on your income, and it will reduce your total tax due or be refunded if you overpaid.
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Attach Form 1042-S to Form 1040-NR
- If filing by mail, attach a copy of Form 1042-S to Form 1040-NR to support your claim for the tax credit.
- If filing electronically, ensure that the details from Form 1042-S are correctly entered in the tax software.
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Check for Tax Treaty Benefits
- If your country has a tax treaty with the U.S., you may qualify for a reduced withholding rate or an exemption on certain types of income.
- Enter treaty-exempt income on Schedule OI of Form 1040-NR, and include Form 8833 if required.
