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What is a W-2, 1042-S, 1099-INT, and 1099-MISC?

  • These are income reporting forms which are required to be issued by employers and payers to report your income and withheld taxes, if any, to you and the Internal Revenue Service. The IRS uses this information to compare against your tax return to assure that you are reporting your income on your return. The forms report different types of income:
  • Form W-2 is for taxable wages of U.S. citizens, resident aliens, and nonresident aliens. It also includes Social Security and Medicare wages and taxes which are used by the Social Security Administration for determining future social security benefits.
  • Form 1042-S is used for reporting income other than taxable wages to nonresident aliens. (Treaty exempt wages reported on this form with Exemption Code 04.) The Income Code (IC) indicates the type of income reported on the form such as 15 (scholarship or fellowship), 16 (self-employment income), 18 (compensation of a teacher or researcher), 19 (compensation while gaining experience), 20 (payments to entertainers), 28 (gambling winnings).
  • Form 1099-INT is for taxable interest. Sometimes banks issue these forms to nonresident aliens who are not subject to tax on bank interest. The fact that a form was issued incorrectly does not make the interest income taxable.
  • Form 1099-MISC is for various types of payments such as non employee compensation (box 7)