Form 1042-S for 2027: income code 15 is split into five codes

What changed

That is the only change to the code tables. We compared every income, exemption and status code on the draft with the final 2026 form; apart from code 15 and the four new codes, the only differences are wording (chapter 4 exemption code 18 now reads "a participating FFI") and the year.

When it applies

Form 1042-S is an annual form, so the 2027 revision is used for payments made in calendar 2027, filed with the IRS and furnished to recipients by March 15, 2028. The 2026 form, with the old code 15, is the one for payments made in 2026 and filed in March 2027. The 2027 form is a draft: the IRS posted it in June 2026 and re-posted a revised draft on October 6, 2026, and the 2027 instructions, which will say how each code is to be used, have not been posted.

What did not change

• The box layout, including the recipient's chapter 3 and chapter 4 status codes in boxes 13j and 13k, the U.S. TIN in 13i, the GIIN in 13l and the LOB code in 13n.
• The chapter 3 and chapter 4 exemption codes in boxes 3a and 4a, including 04 for a treaty claim.
• Every other income code, from 01 interest to 61 settlement payments.

Mapping your payment types

The practical work is in the payment-type table of the AP or withholding system. A single "pension/annuity/other" type that feeds code 15 today needs to become separate types next year, because the codes now tell the IRS which kind of payment it was. Treaties often treat these payments differently too: pensions and annuities usually share a treaty article but not always, alimony is frequently taxable only in the recipient's country of residence, and social security benefits are handled under their own rules. The country pages in the treaty rates section give the article for pensions in each treaty.

The 1042-S code finder still shows the 2026 codes, which are the ones to use until the 2027 form is final; it will add 62 to 65 then.

Social security benefits

U.S. social security benefits paid to a nonresident alien are already reported by the Social Security Administration on its own Form SSA-1042S, with 85% of the benefit taxable at 30% (an effective 25.5%) unless a treaty changes that. The draft does not say which other payers would use code 65; wait for the 2027 instructions before assigning it.

What to do now

• File 2026 as usual. The forms due March 15, 2027 use the 2026 codes.
• Split the payment types in your vendor and payment records during 2027, so the data supports the new codes by year end.
• Check the treaty article for each foreign recipient of annuities or alimony separately from pensions.
• Watch for the 2027 instructions and the final form; drafts can still change.

Questions people ask