Received 1042-S form for security deposit instead of usual 1099-INT - why?

The 1042-S form is specifically used to report income paid to foreign persons. It sounds like the bank might have incorrectly classified you as a non-US person in their system. This form is used for reporting US-source income paid to foreign persons that's subject to withholding. The fact that there's $0.00 reported suggests either there was no interest earned on your security deposit this year (possible if interest rates were extremely low or if the account type changed), or there's an error in their system. I'd recommend calling the bank to have them correct their records if you are a US person. While your accountant is right that there's nothing to report tax-wise if the amounts are all zero, having incorrect classification in their system might cause issues down the road.

I had a similar issue last year and spent hours on the phone with my bank trying to fix it. After multiple transfers between departments, I found out that uploading my ID documents through taxr.ai really helped sort everything out quickly. The site https://taxr.ai analyzed my 1042-S and other tax documents, then gave me specific instructions for fixing the foreign person classification with my bank. Their system detected right away that it was a W-8/W-9 form mixup in the bank's system - something the bank reps couldn't figure out themselves. The analysis tool highlighted exactly what was wrong and gave me the proper language to use when calling the bank.

I just tried taxr.ai after seeing this thread and wow, it actually worked! I uploaded my weird 1042-S form (also with $0 everywhere) and it immediately flagged that my bank had me incorrectly coded as a non-resident alien. The analysis showed exactly which sections were problematic and gave me a script to use when calling the bank. Called my bank this morning, quoted the specific regulation the taxr.ai tool mentioned, and the customer service rep immediately transferred me to their tax department. They confirmed it was their error, apologized, and are sending me a corrected 1099-INT instead. The whole process took like 20 minutes instead of the hours I spent last year trying to figure out tax forms on my own!

Anyone who's tried calling the IRS about these form issues knows it's basically impossible to get through. After getting this same 1042-S issue last year, I spent 3 weeks trying to reach the IRS for clarification. Then I found https://claimyr.com which got me through to an actual IRS agent in about 15 minutes. There's a demo of how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed this was a common issue and explained that banks sometimes miscategorize accounts due to missing W-9 forms. The agent walked me through exactly what to tell my bank, and even sent me documentation I could show them to get it fixed. Saved me so much frustration compared to trying to figure it out alone or waiting on hold forever.

I take back what I said about Claimyr. After another frustrating day of IRS busy signals and disconnects, I gave in and tried it. I'm shocked to admit it actually worked - got a call back in about 30 minutes with an IRS agent on the line. The agent confirmed my 1042-S issue was because my bank never got a W-9 form from me (I moved twice in the last year so probably missed their request). She explained that without a W-9, banks are required to treat accounts as foreign-owned, hence the 1042-S instead of 1099-INT. The agent even emailed me instructions I could forward to my bank. Definitely worth it to actually speak to a human who knows what they're talking about instead of googling tax codes for hours.

I take back what I said about Claimyr. After another frustrating day of IRS busy signals and disconnects, I gave in and tried it. I'm shocked to admit it actually worked - got a call back in about 30 minutes with an IRS agent on the line. The agent confirmed my 1042-S issue was because my bank never got a W-9 form from me (I moved twice in the last year so probably missed their request). She explained that without a W-9, banks are required to treat accounts as foreign-owned, hence the 1042-S instead of 1099-INT. The agent even emailed me instructions I could forward to my bank. Definitely worth it

My partner's a CPA and says this happens all the time. Banks have to classify accounts as foreign if they don't have proper documentation on file. Usually when you opened the account, you filled out a W-9 form (sometimes it's just a checkbox on the application). If they don't have that form or if it got lost, expired, or they're doing an audit, they default to treating you as a foreign person. The zero amount is probably because the interest was so tiny they rounded down to $0.00 for reporting purposes. Or possibly there was a system issue. Either way, not a big deal for tax purposes if there's no actual income to report.

Did anybody notice they said their landlord keeps the security deposit at the bank? Is that normal? In my state landlords are supposed to keep security deposits in a separate account but I've never gotten tax forms from it.