1042 Configuration

[former_member862468]

Hi, I have few questions on 1042S for USA withholding tax code

We have a foreign vendor who we pay for two income codes Rent and Services and 1042 has both federal w/h and state w/h taxes portion.

1) Should i have two w/h tax types like 03 (Federal) and 04 (State)

2) Should i use tax codes 42 for Federal (31%) and 43 for State (7%)?

3) If i use tax codes for Federal and state, how do i use both rent and services in Vendor master as we may have some invoices for Rent and some for Services and we want to differentiate and calculate tax accordingly when payment document is posted

4) Are there any other steps to be considered for calculation of these tax amount automatically. thank you

[former_member862468]

Also, I have two questions

1) When you submit it to IRS, would you pay federal and state full money and Fed would pay the states like in 1099?

2) Also, do i have to configure certificate # range. Is that a mandatory step to be done? I am not sure of the significance of this.

thank you