Form 1042 Penalties for Late Filing and Late Payment

Penalty for Late filing of Form 1042

The penalty for not filing Form 1042 by the due date (including extensions) is 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax.

However, if you can demonstrate a legitimate cause for failing to file or pay on time and that it was not willful negligence, you may not be required to pay the penalties.

Penalty for Late Payment of 1042 Taxes

The penalty for not paying the tax by the due date is generally one-half of 1% of the unpaid tax for each month or part of a month the tax remains unpaid, up to a maximum of 25% of the unpaid tax.

All depository tax liabilities must be paid electronically using EFTPS. Failure to use EFTPS may result in a 10% penalty.

How to avoid Form 1042 penalties?

• File your return by the IRS deadline: Submit Form 1042 by March 16, 2026, to avoid late filing penalties of up to 25%. File early or request an extension (Form 7004) if needed.
• Report your tax liability accurately: Ensure all details, including amounts withheld and recipient information, are correct to prevent penalties and interest.
• Timely payments or deposits of taxes: Pay withheld taxes on time through EFTPS to avoid late deposit penalties.