The IRS is accelerating its shift from paper to electronic filing for withholding returns. Qualified Intermediaries (QIs), especially IT and tax leads, should assess readiness now.

No more exemptions?

IRS Notice 2024-26 granted a temporary administrative exemption from the Form 1042 e-filing requirement, via Modernized e-File (MeF), for tax period (TP) 2023 (filed in 2024) for all withholding agents and for TP 2024 (filed in 2025) for foreign withholding agents. As of January 27, 2026, no extension has been announced for TP 2025 Forms 1042 filed in 2026.

What does it mean for you?

If your organization is a QI, you should plan for the possibility that your TP 2025 Form 1042 may need to be filed electronically via MeF, rather than on paper (absent further IRS guidance).

For detailed information, please consult our detailed Tax Regulatory Services Alert below.