W-8/1042-S Compliance When Making Payments to Non-U.S. Persons
Author: Steven D. Mercatante
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
The IRS is heavily focusing its nonresident alien tax regulations compliance audits on accounts payable operations. If your organization outsources work to an overseas contractor, if you bring a foreign contractor in for short-term work, or if you are asked to pay a foreign consultant’s invoice, this course will help you to make sense of the regulations surrounding payments to foreign vendors.
Publication Date: August 2025
Topics Covered
- How to distinguish a 1042-S reportable non-resident alien payee from a 1099 reportable resident alien or U.S. citizen payee
- Tips on recognizing how to handle visas, green cards, and using the IRS substantial presence test to identify when a payment should be 1042-S or 1099 reportable
- Why were the services performed, and why it is so important to determine your 1042-S reporting responsibilities
- How to use the Forms W-8 and 8233 to validate payee claims for treaty benefits
- Address rules for 1042-S tax withholding and how to report it
Learning Objectives
- Identify the regulations surrounding payments to foreign vendors
- Recognize how to make payments to foreign vendors and how to validate Forms W-8 and 1042-S to report those payments
- Identify if your organization does not have appropriate policies in place for identifying when W-8 or 1042-S reporting situations arise
- Describe 1099 reporting rules and get to the next level in terms of protecting your organization from an IRS audit
- Recognize which W-8 fits with the appropriate payee and payment situation
- Identify important treaty benefit validation steps
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
