Changes to withholding rate table. Table 1, Withholding Tax Rates on Income Other Than Personal Services Income, is revised. Columns have been deleted or renamed and footnotes have been added, deleted, or revised for clarity.

U.S. real property interest. In most cases, the treatment of a regulated investment company (RIC) as a qualified investment entity (QIE) changes in 2012. The special rules that apply to distributions from a QIE attributable to the gain from the sale or exchange of a U.S. real property interest will continue to apply to certain distributions from a RIC that are directly or indirectly attributable to distributions received by the RIC from a real estate investment trust. See Qualified investment entities under U.S. Real Property Interest.

Interest-related dividends and short-term capital gain dividends received from mutual funds. Beginning January 1, 2012, the exemption from withholding on certain interest-related dividends and short-term capital gain dividends paid by a mutual fund or other regulated investment company expires.

Portfolio interest. The rules determining whether interest is considered portfolio interest change for obligations issued after March 18, 2012. Generally, interest paid on nonregistered (bearer) bonds will not be treated as portfolio interest. See Portfolio interest.

New codes for payments to artists or athletes. Use Income Code 42 for payments to an artist or athlete who has not signed a central withholding agreement. Use Income Code 43 for payments to an artist or athlete who has signed a central withholding agreement.

More requests for extensions must be filed electronically. Requests on Form 8809 for an extension of time to file Form 1042-S must be made electronically if the request is for more than one payer. See Extension to file Form 1042-S with the IRS.

Future developments. The IRS has created a page on IRS.gov for information about Publication 515 at www.irs.gov/pub515. Information about any future developments affecting Publication 515 (such as legislation enacted after we release it) will be posted on that page.

Exemption from requirement to withhold for certain payments to qualified securities lenders. If you made U.S.-source substitute dividend payments to qualified securities lenders, and these payments are part of a chain of substitute dividend payments, you may be exempt from withholding tax on the payments. See Amounts paid to qualified securities lenders .

Electronic deposits. You must make all deposits of taxes electronically.

Substitute forms. Any substitute forms you use must comply with the requirements in Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns. If they do not, the forms may be rejected as incorrect and the IRS may impose penalties. See Penalties.

Filing electronically. If you file Form 1042-S electronically, you will use the Filing Information Returns Electronically (FIRE) system. You get to the system through the Internet at fire.irs.gov.For files submitted on the FIRE system, it is the responsibility of the filer to verify the results of the transmission within 5 business days. The IRS will not mail error reports for files that are bad.

Qualified intermediaries. A branch of a financial institution may not act as a qualified intermediary in a country that does not have approved know-your-customer rules. See Qualified intermediary under Foreign Intermediaries.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

This publication is for withholding agents who pay income to foreign persons, including nonresident aliens, foreign corporations, foreign partnerships, foreign trusts, foreign estates, foreign governments, and international organizations. Specifically, it describes the persons responsible for withholding (withholding agents), the types of income subject to withholding, and the information return and tax return filing obligations of withholding agents. In addition to discussing the rules that apply generally to payments of U.S. source income to foreign persons, it also contains sections on the withholding that applies to the disposition of U.S. real property interests and the withholding by partnerships on income effectively connected with the active conduct of a U.S. trade or business.