Vanguard is refusing to give me a 1042-S for 2020

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Topic Author
freelancer
Posts: 33
Joined: Sat Jan 10, 2015 2:55 pm

Vanguard is refusing to give me a 1042-S for 2020

Post by freelancer »

I was a Canadian resident through all of 2020. I used to live in the US on a non-immigrant visa when I first opened my Vanguard account. I told Vanguard in 2019 when I moved to Canada. But they messed things up on their end and issued me a 1099-DIV instead of a 1042-S for my 2020 dividend income in the vanguard account. They also didn't send me a W-8 BEN form when I asked them in 2019 which would have made the correct witholding of 15% happen in 2020 because of the Canada-USA tax treaty.

I called them and they are refusing to fix this error. I'm very nervous about filing my 1040-NR for 2020 with this incorrect form. Do I have any recourse? Do I just keep calling them and insisting they issue a 1042-S or can I explain the situation to the IRS while filing my 1040-NR?

Please help!
TedSwippet
Posts: 3563
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Vanguard is refusing to give me a 1042-S for 2020

Post by TedSwippet »

freelancer wrote: Wed Apr 07, 2021 1:51 pm II called them and they are refusing to fix this error. I'm very nervous about filing my 1040-NR for 2020 with this incorrect form. Do I have any recourse? Do I just keep calling them and insisting they issue a 1042-S or can I explain the situation to the IRS while filing my 1040-NR?
Just file a paper 1040-NR with Schedule NEC and Schedule OI, and attach the 1099 to the return. Presumably there is no withholding shown on your 1099? In which case, enter the dividends you received in the 15% column of Schedule NEC (US/Canada treaty rate), pay the US their 15%, and (presumably) claim this as a credit against your Canadian tax. Filing a 1040-NR for this case should be simple, and all the numbers ought to drop out cleanly. You don't include anything at all on it relating to your non-US finances. If you feel you must explain, you could add a Form 8833 treaty claim for the 15% rate; this will tell the IRS everything they might want to know.

This sort of thing isn't rare, so it shouldn't cause any issues with the IRS. In future though, you'll want to be sure to have a W-8BEN on file with Vanguard from this point on. This isn't really Vanguard's error, as you should have checked your W-8BEN status with them well before now. Also, their process for completing a W-8BEN is online, so don't expect them to send you anything. It's possible I suppose that you might need a Vanguard rep to switch on access to this online W-8BEN system. Can't remember, as it's been a loooong time since I moved out of the US.
Topic Author
freelancer
Posts: 33
Joined: Sat Jan 10, 2015 2:55 pm

Re: Vanguard is refusing to give me a 1042-S for 2020

Post by freelancer »

Thank you for the reply. That is quite reassuring!
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