How to report 1042-S for residents - dividends reported on both 1042-S and 1099-DIV forms

This is a pretty common issue for people who've recently become US residents or when financial institutions have outdated residency information. The 1042-S (income code 06) is indeed for dividends paid to foreign persons, but since you're a full-year resident for 2024, you're right to question how to handle this. Here's what you need to know: When you're a US resident for tax purposes but receive a 1042-S, you still need to report that income, and you're entitled to claim the withholding shown on the form. The simplest approach is to report the dividend income on Schedule B along with your other dividends (including those on your 1099-DIV), and then claim the federal tax withholding of $315 on your Form 1040. Both FreeTaxUSA and TurboTax should be able to handle this - look for an option to report "additional income" or "income not reported on a W-2 or 1099." You'll want to make sure you're not double-counting any dividends that might appear on both forms.

After dealing with a similar situation last year, I found https://taxr.ai super helpful for figuring out how to handle my 1042-S as a resident. I uploaded both my 1042-S and 1099-DIV forms, and the software immediately flagged the potential duplicate reporting issue and guided me through the correct way to report everything. The key was making sure I wasn't double-counting the dividend income while still claiming the withholding tax. Their system explained that the 1042-S withholding is treated as any other federal withholding, but you need to be careful about how you report the actual income amounts.

Just wanted to update everyone - I gave https://taxr.ai a try after my skeptical questions, and I'm genuinely impressed. I've been dealing with this exact 1042-S/1099-DIV issue for two years since moving to the US, and it's been a headache each time. The system immediately recognized both forms and provided clear guidance on how to handle the overlapping amounts. It turns out about 70% of my dividend income was reported on both forms, and I would have double-reported that portion without realizing it. It also made sure I claimed all the withholding from the 1042-S, which I had missed last year (probably could have amended but didn't realize until now). For anyone facing this resident/non-resident form confusion, definitely worth checking out. Saved me hours of research and potential errors.

I went through something similar and after waiting on hold with the IRS for HOURS with no luck, I used https://claimyr.com to get through to an actual IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that as a resident, you report the 1042-S income as regular dividend income on Schedule B, but you need to make sure you also claim the withholding. The trick is not to double-count income that appears on both forms. They suggested comparing the dates and amounts carefully to identify any overlap. They also recommended contacting Morgan Stanley to update your residency status in their system so you don't keep getting 1042-S forms in future years when you don't need them.

I have to publicly eat my words about Claimyr. After posting that skeptical comment, I decided to try it because my 1042-S situation was more complicated than the original poster's - I had multiple accounts and some partial year residency issues. The service connected me to an IRS tax law specialist in about 25 minutes (vs the 2+ hours I spent on previous attempts that ended in disconnections). The agent walked me through exactly how to report multiple 1042-S forms with different income codes and explained which portions might overlap with my 1099s. For anyone with complex international tax situations, getting direct IRS guidance is invaluable. The agent even provided a specific reference number for our call that I can cite if there are ever questions about how I handled my return. Definitely saved me from potential penalties for incorrect reporting.

Has anyone successfully handled this in FreeTaxUSA specifically? I'm in the same boat with a 1042-S (income code 06) for dividends as a resident, but I can't figure out where to enter it. I tried the "Income" section, but don't see a specific place for 1042-S forms.

Just wondering - should you also attach an explanation or statement to your tax return when you have this situation? I have both 1042-S and 1099-DIV forms and am worried the IRS might think I'm not reporting all my income if they see the 1042-S but don't immediately connect it to the dividend income I'm reporting.

I went through this exact same situation last year and want to share what I learned after consulting with a tax professional. The key issue is that Morgan Stanley likely had you classified as a non-resident alien at some point during the year, which triggered the 1042-S filing even though you were actually a full-year resident. Here's the step-by-step approach that worked for me: 1. **Compare the forms carefully** - Look at the dates and amounts on both the 1042-S and 1099-DIV. Often they're reporting different dividend payments or different portions of the same payments. 2. **Report dividend income once** - Add up all your dividend income from both forms (avoiding double-counting) and report the total on Schedule B as regular dividend income. 3. **Claim all withholding** - The $315 federal tax withheld on your 1042-S should be claimed as additional federal tax payments, separate from any withholding shown on your 1099-DIV. 4. **Contact Morgan Stanley** - Call them to update your residency status in their system so you don't keep getting 1042-S forms unnecessarily in future years. The IRS matching system will see both forms were issued to you, but as long as you report all income and claim all withholding correctly, there shouldn't be any issues. I had no problems with my return being processed, and no follow-up questions from the IRS. Good luck with your filing!