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1042 Reporting (USA)
This report creates the 1042 forms and an output file with the corresponding values. All vendor clearing documents with withholding tax are selected, provided they were posted in one of the specified company codes and the vendor fulfills the prerequisites described below.
The company code corresponds to the "Agent" for retaining and reporting the 1042 withholding tax.
The address must be maintained in full for each "Agent". For electronic reporting, in particular, the first line of the name, the street and house number, the postal code, the city and the state are required.
The tax number must be maintained for each "Agent" as an additional specification for the company code. The tax number should be entered as a string of digits, without any special characters. Also see Release Information FI_22A_QUELLENSTEUER.
A vendor is selected by the report if he/she has entered a withholding tax country in the master record which differs from the company code country. The withholding tax country should not be confused with the country in the vendor address.
For 1042 reporting, the vendor must also be assigned to a withholding tax category (Type of Recipient).
If you want to exempt the vendor from withholding tax, proceed as described in the general withholding tax documentation. 1042 also requires, however, a reason for the exemption. The reason should be maintained in the master record.
Setting up the withholding tax indicator and formulas
For the output in the column 'Income Code', the withholding tax code rather than the withholding tax indicator is used. The taxable portion for determining the base amount must always be 100% for the withholding tax indicator for 1042.
The tax rate is stored in the formula. The currency in the formula should be the same as the currency for the company code. Enter the maximum possible value as the to-amount.
You should store an entry in which the country is masked with blanks for all countries which you do not explicitly define.
For stipends (Income Code 15) you divide the annual allowance by the number of expected payments. The value calculated is entered in the base amount reduction field.
If the tax rate changes, you should create a new indicator. The two percentage rates are then displayed separately in reporting.
Description of countries / regions
All country and region descriptions must be maintained in the company code language.
To create an output file, the logical file FI_TAX1042S must be defined for your installation. For this, also see the FI_22A_QUELLENSTEUER release information.
At the start of the report, additional data for the creator 'Transmitter' and any payer of the tax payable who differs from the company codes / agents must be entered for the output file.
Any output file which already exists is overwritten.
The main function of the report is to create the 1042 forms. The forms can also be output on a file. The format of the file corresponds to the requirements of the IRS.
There are four print or file outputs to choose from:
Report with the payables from the retained taxes. The report can be used to fill-in form 1042.
Log of values under review with two possible summarization levels.
Output file for 1042s
In addition, a brief log is created.