Compensation Reporting

Wages for working in US waters must be reported on Form W-2. This form shows the total wages paid to the employee along with income and payroll tax withholdings. Wages paid to a nonresident alien not reported on a W-2, such as expected treaty exempt compensation, should be reported on Form 1042-S.

The W-2 and 1042-S are annual summaries issued by the employer after year-end. A copy is provided to both the employee and the government.

A social security (SSN) number is the only taxpayer number that can be shown on a W-2. The IRS does not permit an individual taxpayer identification number (ITIN) to be shown on this form. In those cases, the taxpayer number space will be blank or show all zeros (000-00-0000).

The Form 1042-S does permit an ITIN to be shown in the taxpayer number space when no SSN is available.