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Form 7004 Extension for Form 1042

What is Form 1042?

Form 1042 is a tax form used by foreign persons or entities to report income earned in the United States to the Internal Revenue Service (IRS). It is specifically used for reporting income that is subject to withholding under IRS regulations, such as certain types of investment income, dividends, rents, royalties, and compensation for services performed in the U.S. by non-resident aliens.

The form is also used by withholding agents, such as financial institutions or employers, to report the amount of withholding tax deducted from payments made to foreign persons or entities. The withholding tax is typically withheld at a flat rate unless reduced or exempted by an applicable tax treaty.

Who Must File

Every withholding agent or intermediary who receives, controls, has custody of, disposes of, or pays a withholdable payment or an amount subject to withholding is required to file an annual return on Form 1042 for the previous calendar year unless an exception applies. Also, any PTP or nominee making a distribution of ECTI (Effectively Connected Taxable Income), or any business obliged to declare a distribution on Form 1042-S, must file Form 1042 for the previous calendar year.

If any of the following are true, you must file Form 1042:

  • File Form 1042, even if you file Form(s) 1042-S electronically.
  • You use Form(s) 1042-S to report to a recipient the tax withheld by your withholding agent.
  • You pay gross investment income to overseas private foundations.
  • You make payments to any foreign person specified for government procurement.
  • You pay an eligible delayed compensation item to a covered expatriate, or you are a trustee distributing funds from a non-grantor trust to a covered expatriate.

Purpose and Usage of Form 7004 for Form 1042

  • The purpose of Form 7004 for Form 1042 is to request an automatic extension of time to file the Form 1042 tax return. Form 1042 is used by foreign individuals or corporations to report income generated in the United States to the IRS, specifically income subject to withholding under IRS regulations.
    Filing Form 7004 allows taxpayers more time to gather essential documents, check financial records, and ensure proper Form 1042 reporting. This extension gives taxpayers 6 months of additional time to finish their tax files completely and thoroughly.
  • Form 7004 is required for taxpayers who anticipate not being able to file their Form 1042 by the initial due date, which is normally March 15th of the following year. Taxpayers can obtain an extension of up to six months using Form 7004, allowing them to file their Form 1042 by the extended date, which is normally September 15th.

    It's necessary to note that Form 7004 only extends the time to file Form 1042; it doesn't extend the deadline for paying any taxes owed. Taxpayers must continue to estimate their tax liability and make any necessary payments by the original due date to avoid penalties and interest costs.

Filing Extensions and Deadlines

The filing extensions and deadlines for Form 7004 concerning Form 1042 are crucial aspects of tax compliance for foreign persons or entities earning income in the United States. Here's an overview:

  • Original Deadline: Form 1042 is usually due on March 15th of the following tax year. If a taxpayer believes they will be unable to meet this deadline, they may request an extension using Form 7004.
  • Extension Length: Form 7004 provides for an automatic extension of up to six months. This means that the extended deadline for filing Form 1042 will be September 15th.
  • Filing Process: To request an extension, taxpayers must submit Form 7004 by the original due date of Form 1042, March 15th. The form can be filed electronically or via mail.


If you submit Form 1042 late or fail to pay or deposit the tax by the due date, you may be subject to penalties and interest unless you can demonstrate that the failure to file or pay was due to justifiable cause rather than deliberate disregard.

Late filing of Form 1042:The penalty for failing to file Form 1042 by the due date (including extensions) is 5% of the unpaid tax for each month or portion of a month the return is late, up to a maximum of 25% of the unpaid tax.

Other penalties:Penalties may be imposed for negligence, substantial understatement of tax, and fraud.

What is Form 7004?

Form 7004, officially titled "Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns," is an essential document for businesses and certain entities that need more time to file their tax returns. This form permits filers to request an automatic extension of time to file tax returns, including those for business income, information reporting, and certain other forms.

Filing for an extension with Form 7004 gives you more time to gather relevant evidence, review financial records, and verify accurate reporting, which helps to avoid mistakes and potential fines for late filing. It is important to understand that, while Form 7004 provides an extension for filing tax returns, it does not extend the date for paying any outstanding taxes.

Businesses, partnerships, trusts, and certain other entities can utilize Form 7004 to request an extension of time to file various tax forms, including:

  • C-corporations (Form 1120)
  • S-corporations (Form 1120S)
  • Partnerships (Form 1065)
  • Multiple-member LLCs as corporation and partnership
  • Trust, Estates and Others (Form 1041)
  • Non-Resident Aliens (Form 1042)

Businesses and entities can avoid costly penalties and maintain compliance with IRS laws by filing Form 7004 appropriately and on time. This form provides taxpayers with flexibility and peace of mind when they need more time to finish their tax filings correctly and fully.

Our simple and secure e-filing process saves you time and effort so that you can focus on other things.

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