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IRS.gov Website
Instructions for Form 1042-S
taxmap/instr2/i1042s-012.htm#en_us_publink64278ad0e2142

taxmap/instr2/i1042s-012.htm#TXMP113e45cd
Amounts Paid by Nonqualified Intermediaries and Flow-Through Entities(p17)

rule
An NQI and a flow-through entity are withholding agents and must file Forms 1042-S for amounts paid to recipients. However, an NQI or flow-through entity is not required to file Form 1042-S if it is not required to file Form 1042-S under the Multiple Withholding Agent Rule,later. An NQI or flow-through entity may report payments made to recipients to the extent it has failed to provide to another withholding agent the appropriate documentation and complete withholding statement for either chapter 3 or 4 purposes. If the NQI or flow-through entity chooses to or must file Form 1042-S, as described above, the NQI or flow-through entity must also file Form 1042 and, if applicable, attach the Form 1042-S it received from the withholding agent to establish any credit for amounts withheld by the withholding agent. See Instructions for Form 1042.
If another withholding agent has withheld tax on an amount that should have been exempt (for example, where the withholding agent applied the presumption rules because it did not receive proper documentation or other required information from the NQI or flow-through entity), and the payee or beneficial owner will make a claim for refund, the NQI or flow-through entity must report on Form 1042-S the correct tax rate and the combined amount of U.S. federal tax withheld with respect to the recipient and should enter the applicable chapter 3 and 4 exemption codes.
If another withholding agent underwithholds, even though it received proper documentation from the NQI or flow-through entity, the NQI or flow-through entity must withhold additional amounts to bring the total withholding to the correct amount.