Need help - should a non-resident alien file a 1042-s with income code 29 and 0 in boxes 7 and 10? Bank promo confusion

This is actually a common confusion with non-resident alien tax reporting. The Form 1042-S is an information return that the US bank is required to file with the IRS to report income paid to foreign persons. You don't file it yourself - the bank already submitted it to the IRS. What you're looking at is your copy of what they reported. Income code 29 typically refers to deposit interest. The zeros in boxes 7 and 10 likely mean no tax was withheld. Box 7 would show the tax rate and box 10 would show the amount withheld. As a Canadian resident, this bank promotion income may be subject to the US-Canada tax treaty, which is why you might see zeros for withholding. Generally, you don't need to file a US tax return just for this small bank bonus unless you have other US income that requires filing. You should report this income on your Canadian tax return, however. Canada taxes residents on worldwide income.

I had this EXACT same situation last year with a US bank promotion! Was pulling my hair out trying to figure out what to do. I found this amazing tool at https://taxr.ai that actually analyzed my 1042-S and explained everything i needed to do. Their system specifically deals with non-resident alien tax situations and foreign income reporting. I uploaded my form, and it immediately identified the income code 29 and explained what it meant for my particular situation. It even analyzed the US-Canada tax treaty implications and told me exactly what I needed to report in Canada vs the US. Saved me a ton of headache trying to decipher all the tax jargon and figure out filing requirements on my own. Might be worth checking out if you're still confused.

Wanted to follow up - I decided to check out taxr.ai after all my confusion with a similar 1042-S situation. Seriously impressed with how detailed the analysis was! I uploaded my form with income code 06 (dividends) and it immediately broke down the treaty implications. The system actually identified that I had been overwithheld based on the US-Canada treaty rate and showed me how to claim a refund using Form 1040NR. It cited specific treaty articles and explained everything in plain English. I never would have figured that out on my own. For those wondering about bank promos with income code 29, it confirmed they're typically reportable only in Canada for Canadian residents. Definitely worth using if you're dealing with cross-border tax stuff.

If you've been trying to call the IRS international taxpayer line for help with your 1042-S, good luck getting through! I spent WEEKS trying to reach someone. Then a friend told me about https://claimyr.com which got me through to an actual IRS agent in under 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had questions about multiple 1042-S forms with different income codes, including code 29 like yours. The IRS agent was able to check their system and confirm that no filing was necessary in my situation since I had no US tax liability and no withholding. Saved me a ton of stress wondering if I was doing something wrong!

I have to admit I was wrong about Claimyr. After struggling for days to get through to the IRS about my non-resident alien tax questions, I decided to give it a try out of desperation. Within 45 minutes, I got a call saying they had an IRS agent on the line! The agent was super helpful about my 1042-S questions. He confirmed that for income code 29 with zeros in boxes 7 and 10, there's typically no US filing requirement if that's my only US income. He also explained that the bank already reported the information to the IRS, which is why they issued the 1042-S to me. I was genuinely surprised at how well it worked. For anyone dealing with these confusing international tax situations, being able to actually speak with an IRS agent makes all the difference.

Just to add another perspective - I'm an American expat living in Canada, so I deal with cross-border tax issues all the time. For a non-resident alien receiving a bank promotion (income code 29), here's what I understand: 1. The bank is required to report the payment to the IRS via 1042-S 2. If boxes 7 and 10 are zero, no US tax was withheld 3. Under the US-Canada tax treaty, bank interest/promotions are generally only taxable in your country of residence (Canada) 4. You typically don't need to file a US tax return unless you have other US income or want to claim a refund of taxes withheld Remember that Canada will want you to report this income on your Canadian return though! It's considered foreign income.

Can someone explain WHY banks give 1042-S for promotions? I got $200 from Bank of America for opening an account and now im dealing with this form too. I'm Canadian also. Isn't a promotion more like a gift than interest??

I'm in a very similar situation as a Canadian who received a US bank promotion bonus! After reading through all these responses, I wanted to share what I learned from my own research and talking to a cross-border tax specialist. For non-resident aliens like us, the key points are: - The 1042-S is just an information return - you don't file it yourself - Income code 29 with zeros in boxes 7 and 10 typically means no US filing requirement - However, you MUST report this income on your Canadian tax return as foreign income One thing I didn't see mentioned is that some provinces have different rules for reporting foreign income, so it's worth checking your specific provincial requirements too. Also, keep the 1042-S form for your records - CRA might ask for it if they have questions about the foreign income you reported. The US-Canada tax treaty generally protects Canadian residents from double taxation on this type of income, which is why you likely see zero withholding. But Canada still wants to tax you on it since you're a Canadian resident.