How to report Form 1042-S Code 15 early draw of retirement

Forum|Forum|5 years ago
May 14, 2021
1 reply
28 views

Hi,

I have a client who worked in the US and decided to move back to her home country Germany in July 2020. She cashed out her retirement early but they gave her 1042-S instead of 1099-R. There is Fed W/H on box 7a and box 10.

I went to 58.2 Foreign withholding and inputed all the information from the Form 1042-S my client received.

But when I looked at the Tax Summary there is nothing being reported on the early draw or withholding. I've read that I should do a Substitute 1099-R.

However Charles Schwab informed my client they have to issue her 1042-S since she lives overseas even though the retirement is from her US souce job.

Please advise on how I should report the early retirement draw and the Fed W/H from a Form 1042-S.

Thank you

Len

Lacerte Tax

This topic has been closed for replies.

Best answer by registeringsucks

She's US green card holder. She was employed in a US company till July 2020, then moved back home to Germany.

Per Charles Schwab they told her because she cashed out the 401k at the end of December 2020 while already being in Germany, so that's the reason why Charles Schwab had to treat her like a "foreigner" in the sense of being outside the US. Technically she's a US Green Card holder without having
residency in the US anymore.

Aside from the 1042-S, she was still working for that same company till July 2020. The retirement contribution is with the same US employer.

Thanks for all your help.