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If you’re one of several thousand people who were affected by a brokerage acquisition over-withholding, you may be issued a Form 1042-S. This has been an issue for a significant number of taxpayers, so here are the steps to take to recover the over-withheld amount. If a brokerage firm issued you a Form 1042-S for the 2023 tax year because funds were withheld and paid to the IRS from a stock conversion you were a party to, the only means to recover the over withheld amount after March 15, 2024, is to file a refund claim. In this case, a refund claim is a U.S. tax return requesting a refund.
If you are an individual and a non-U.S. resident, you will generally file a Form 1040-NR. You must obtain an Individual Taxpayer Identification Number (ITIN) from the IRS before filing a Form 1040-NR.
If you are an individual and a U.S. resident, you will need to claim the over-withheld amount on your Form 1040 return.
The statute of limitations only allows you to file a refund claim within three (3) years of the issuance date of the Form 1042-S. After that, you can no longer receive a refund of the over-withheld amounts.
What is an ITIN and why do I need it?
Individual Taxpayer Identification Number | Internal Revenue Service (irs.gov)
TAS Get Help Page – How to get an ITIN
Getting an ITIN – Taxpayer Advocate Service (irs.gov)
IRS Tax Topic No. 857 – ITIN’s
Topic no. 857, Individual taxpayer identification number (ITIN) | Internal Revenue Service (irs.gov)
How do I apply for an ITIN?
How do I apply for an ITIN? | Internal Revenue Service (irs.gov)
Obtaining an ITIN from abroad:
Obtaining an ITIN from Abroad | Internal Revenue Service (irs.gov)
IRS video on how to get an ITIN:
How to get an Individual Taxpayer Identification Number – YouTube
Remember that you have the right to pay no more than the correct amount of tax. Learn more about this and other taxpayer rights by reading the Taxpayer Bill of Rights.
