As in previous years, PQ Solutions LLC (“PQS”) will be able to support FIs with preparing and uploading FATCA, QI and CRS reportable data to the respective authorities.
Reporting Requirements
CRS Reporting
Important Changes in Brief
In addition to account holders resident in jurisdictions that were reportable for tax year 2024, from tax year 2025 on, Swiss financial institutions must also report all account holders resident in countries having an AEOI Agreement in force since January 1, 2025. A list of these states is available on the SFTA website. The following countries are new for the tax year 2025 reporting:
Georgia
Moldova
Ukraine
Periodic Filing Requirements
Swiss financial institutions must report CRS data to the SFTA. To do so, Swiss Reporting FIs must register on the Swiss registration and filing portal.
The Reporting FIs must transmit the reportable information to the SFTA by June 30, 2026 the latest.
The Reporting FIs registered with the SFTA must, regardless of whether they maintained reportable accounts in the respective calendar year, submit a reporting to the SFTA. If the Reporting FI did not have any reportable accounts, a nil reporting is required.
The reports must be filed according to the SFTA technical guidance.
Additionally, the SFTA has released a data transmission guide outlining technical specifications on how to transmit data to the FTA.
The data can be filed in three ways:
Upload of encrypted XML-file via SFTA Portal (XML Data-Upload)
Manual data entry via SFTA Portal (Online form)
Machine-to-machine webservice interface (M2M). If a FI chooses this option, the interface must be activated first.
The reports cannot be filed in paper form.
Should you seek assistance in preparing the CRS reporting, please do not hesitate to contact us.
FATCA Form 8966 Reporting
Important Changes in Brief
For the tax year 2025, there have been no changes to the FATCA Reporting standards applicable to Swiss FFIs.
Important Reminders in Brief
Reporting Model 2 FFIs reporting on non-consenting U.S. accounts
For preexisting accounts that are non-consenting U.S. accounts reported by Reporting Model 2 FFIs, the following pooled reporting categories should be used:
Category “recalcitrant account holders that are U.S. persons”,
Category “recalcitrant account holders with U.S. indicia” or
Category “recalcitrant account holders that are passive NFFE”.
In cases where a newly opened individual account has a change in circumstances that causes the original self-certification to be incorrect or unreliable, and where the Reporting Model 2 FFI is unable to obtain a valid self-certification establishing whether the account holder is a U.S. citizen or resident, the pooled reporting category “recalcitrant account holders with U.S. indicia” should be used.
Periodic Filing Requirements
Swiss Reporting Model 2 FFIs have the following two reporting deadlines for the tax year 2025:
January 30, 2026 for the aggregated reporting of non-consenting U.S. accounts
March 31, 2026 for U.S. accounts with consent to report
To request an automatic 90-day extension of time to file Forms 8966 to report consenting accounts, use Form 8809-I. Please note that Swiss FFIs cannot request an extension of time to file Forms 8966 to report non-consenting accounts.
It is the responsibility of the FFI to perform the 8966 FATCA reporting, a delegation of the responsibility to an upstream custodian is not possible.
As a Swiss Reporting Model 2 FFI, the 8966 FATCA reporting is performed electronically through the International Data Exchange Service (IDES). The FATCA XML Schemas and Business Rules for Form 8966 and the publications contained therein provide guidelines to meet the FATCA reporting requirements.
Please be reminded that the certificates used for the encryption of FATCA XML-files may expire: Before starting to prepare the 8966 reporting please verify that all certificates are up to date.
PQS has acquired the status “Third Party Preparer” with the IRS and can encrypt FATCA reportings from reporting financial institutions with its own certificate and submit the reportings to the IRS through its IDES account. Should you seek assistance in generating the FATCA XML-file or the encrypted file to be submitted onto IDES through your or our IDES account, please do not hesitate to contact us.
FATCA Group Request Reporting
The aggregated reporting of non-consenting accounts may result in a group request from the U.S., which in turn requires a Reporting Swiss Financial Institution to transmit account information to the SFTA. The information required to be exchanged with the SFTA includes a SEI-XML file, a FATCA-XML file and account documentation in PDF format.
We recommend affected Swiss financial institutions to continuously compile the required information and documentation for a possible transmission to the SFTA and to test the prepared information packages with the SFTA prior to the receipt of any request.
For more information, please contact us. PQS can provide all types of support in preparing the FATCA group request information packages.
QI Form 1042-S and 1042 Reporting
2025 Form 1042-S: Important Changes in Brief
New income codes 59, 60 and 61
The following income codes were added to 2025 Form 1042-S:
| 59 | Consent fees |
| 60 | Loan syndication fees |
| 61 | Settlement payments |
These codes are optional for tax year 2025.
New box 7d
Starting with tax year 2025, a QI, WP and WT must check box 7d on an amended Form 1042-S to show that the income was first reported in a withholding rate pool and is now being reported to an individual recipient.
When amending the reporting, the QIs must proceed as follows:
Check box 7d on an amended Form 1042-S that was originally filed using a withholding rate pool, and
Check box 7d on the new Form 1042-S filed for the specific recipient.
2025 Form 1042-S: Important Reminders in Brief
Request for extension of time to forward recipient copies
Starting with tax year 2024, QIs must use Form 15397 to submit a request for a 30-day extension to furnish Copies B of Forms 1042-S to recipients of U.S. reportable amounts. The Form 1042-S must be signed and submitted by fax. For further instructions, see Section Periodic Filing Requirements below.
2026 Form 1042-S: Outlook on Important Changes
For tax year 2026, significant changes are expected to Form 1042-S reporting. Because these changes will require adjustments to QIs’ systems and processes beginning in 2026, we have included an overview of the most important changes in this newsletter.
Retirement of the IRS FIRE System for Tax Year 2026
For the 2027 filing season and the 2026 tax year, the FIRE system currently used to file Forms 1042-S will be retired and replaced by the Information Returns Intake System (IRIS).
Access to IRIS is only possible with an IRIS Transmitter Control Code (TCC). An IRIS TCC can be granted only to users who have a U.S. Tax Identification Number (TIN) and a valid Secure Access account through the ID.me portal. For each entity, two users with a U.S. TIN and a valid ID.me Secure Access account are required. If a QI does not meet these requirements, it may engage a third-party transmitter.
We are pleased to inform you that PQS has successfully obtained an IRIS TCC, enabling us to act as a third-party transmitter for withholding agents. In addition, PQS has been approved by the IRS as a software developer. Our software is currently in the testing phase of the IRIS Assurance Testing System (IRIS ATS).
If you are interested in our IRIS transmitter services, please contact us.
Format change of Form 1042-S for tax years 2025 and 2026
For tax year 2026, the following adjustments have been made to lines 12, 13 and 15:
| Box no. | 2025 Form 1042-S: Box name | 2026 Form 1042-S: Box name |
|---|---|---|
| 12i | City or town, state or province, country, ZIP or foreign postal code | Room or suite no. |
| 12j (new) | City or town | |
| 12k (new) | State or province | |
| 12l (new) | Country | |
| 12m (new) | ZIP or foreign postal code | |
| 13d | City or town, state or province, country, ZIP or foreign postal code | Apt. no. |
| 13e | Recipient’s U.S. TIN, if an | City or town |
| 13f | Ch. 3 status code | State or province |
| 13g | Ch. 4 status code | Country |
| 13h | Recipient’s GIIN | ZIP or foreign postal code |
| 13i | Recipient’s foreign tax identification number, if any | Recipient’s U.S. TIN, if any |
| 13j | LOB code | Ch. 3 status code |
| 13k | Recipient’s account number | Ch. 4 status code |
| 13l | Recipient’s date of birth (YYYYMMDD) | Recipient’s GIIN |
| 13m (new) | Recipient’s FTIN, if any | |
| 13n (new) | LOB code | |
| 13o (new) | Recipient’s account number | |
| 13p (new) | Recipient’s date of birth (YYYYMMDD) | |
| 15i | City or town, state or province, country, ZIP or foreign postal code | Room or suite no. |
| 15j (new) | City or town | |
| 15k (new) | State or province | |
| 15l (new) | Country | |
| 15m (new) | ZIP or foreign postal code |
Chapter 3 exemption codes
Starting with tax year 2026, it will be newly required to use a chapter 3 exemption code whenever the tax rate on the Form 1042-S is less than 30 percent. For this purpose, the following chapter 3 exemption codes were modified as follows:
| Chapter 3 exemption code | 2025 Form 1042-S | 2026 Form 1042-S |
|---|---|---|
| 02 | Exempt under IRC | Exempt or reduced withholding under IRC |
| 04 | Exempt under tax treaty | Exempt or reduced withholding under tax treaty |
2025 Form 1042-S: Filing Requirement
A QI must file Forms 1042-S with the IRS by March 16, 2026. The Forms 1042-S must be filed electronically as a .txt-file through the FIRE system.
The specifications for the electronic filing of Forms 1042-S for the tax year 2025 can be found in Publication 1187. Should you seek assistance in generating the electronic file, please do not hesitate to contact us.
Currently, new TCCs can only be requested through the Information Returns (IR) TCC application system (IR-TCC). In addition, any updates to existing TCCs must also be submitted through the IR-TCC system. QIs that already hold a TCC may continue to use it until the retirement of the FIRE system.
As the FIRE system will be retired beginning with the tax year 2026, existing TCCs remain valid only for filings relating to the tax year 2025.
PQS acquired the status third-party transmitter (“TPT”) with the IRS and can transmit Forms 1042-S for the tax year 2025 on behalf of QIs to the IRS by using its own TCC and EIN. Should you need our support regarding electronic filing, please do not hesitate to contact us.
To request an automatic extension 30-day extension of time to file Forms 1042-S use Form 8809. The form can be completed and submitted online through the FIRE System. For an extension request to be accepted, it must be filed with the IRS by March 16, 2026.
Please note that if a QI is required to file recipient-specific Forms 1042-S, the Form 8809 does not extend the deadline to furnish the copies of those forms. To extend the deadline to file a recipient-specific Form 1042-S you have to request a 30-day extension of time by fax by using the following contact information:
Internal Revenue Service Technical Services Operation
Attn: Extension of Time Coordinator
Fax: +1 304 579 4105
The letter must include (a) your name, (b) your TIN, (c) your address, (d) type of return, (e) a statement that your extension request is for providing statements to recipients, (f) reason for delay, and (g) the signature of the payer or authorized agent. Your request must be dated by the date on which the statements are due to the recipients.
2026 Form 1042-S: Outlook on Important Changes to the Filing Requirements
Starting with the 2026 tax year, an IRIS Transmitter Control Code (IRIS TCC) will be required.
In addition, the filing format will change: Instead of the current .txt format, Forms 1042-S will be filed in XML format through the Information Returns Intake System (IRIS).
2025 Form 1042: Important Changes in Brief
Electronic Filing of Form 1042
Starting with the 2025 tax year, QIs must file Form 1042 electronically through the Modernized e-File (MeF) platform. Physical (paper) submission of Form 1042 is no longer permitted, unless a QI obtains a waiver exempting it from the mandatory electronic filing requirement. PQS completed an enrolment process to act a transmitter for Form 1042 filings. For more details, see Section 2025 Form 1042: Filing Requirements below.
Direct deposit and electronic payments
As of tax year 2025, it is possible to request a refund on Form 1042 by direct deposit instead of a check, which is the default option for tax refunds with the IRS. The withholding agent must inform PQS as Electronic Return Originator and Transmitter for the electronic submission of 2025 Form 1042 through modernized e-File its U.S. Bank account number, the routing number of its U.S. Bank for the credit of the refund and whether the U.S. Bank account is a checking or savings account. The 2025 Form 1042 in .pdf has three new lines for this purpose: Lines 71b-71d.
There is the new payment option “Electronic Funds Withdrawal”. In order to use this option, the withholding agent must request PQS as Electronic Return Originator and Transmitter for the electronic submission of 2025 Form 1042 through modernized e-File to select this option and provide with the U.S. Bank account number, the routing number of its U.S. Bank for the funds withdrawal, the requested payment date, the taxpayer’s daytime telephone number and whether the U.S. Bank account is a checking or savings account.
2025 Form 1042: Filing Requirements
A QI must file Forms 1042 with the IRS by March 16, 2026.
There is the option to request an automatic extension 6-month extension of time to file Form 1042 by using Form 7004. Please note the Form 7004 does not extend the time to pay your taxes due. The deadline to pay your taxes remains unchanged.
For completing Form 7004 on paper, please use the following address:
Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409
USA
If a private delivery service (e.g. DHL, FedEx etc.) is used, please utilize the following street address:
Ogden - Internal Revenue Submission Processing Centre
1973 Rulon White Blvd.
Ogden, UT 84201
USA
Starting tax year 2025, Form 1042 and its attachments must be submitted electronically via the Modernized e-File Platform (MeF).
Currently, the way the MeF platform is set up to be used by third-party transmitters to file the forms on behalf of taxpayers, not by taxpayers themselves.
PQS has attained the Electronic Return Originator and Transmitter status with the IRS and is able to support QIs, QDDs, U.S. withholding agents and WFPs with preparing the Form 1042, Schedule Q (Form 1042), the accompanying Forms 1042-S (to substantiate the tax credit claimed in line 67 of the Form 1042) and the Form 7004 in the correct format and filing it with the IRS on behalf of the filer.
The following graph illustrates the e-filing service process with PQS:
*QIs/QDDs, WFPs and our U.S. clients with an agreement with PQS to provide reporting or reconciliation services do not need to forward a template with information on Form 1042 and attachments, as PQS has this information already.
If you are interested in engaging us for this service, please contact us.
Should you seek assistance in generating the requests for extension, please do not hesitate to contact us.
QI Form 1099 Reporting
2025 Form 1099: Important Changes in Brief
FIRE Retirement for tax year 2026
For the 2027 filing season and the 2026 tax year, the FIRE system currently used to file Forms 1042-S will be retired and replaced by the Information Returns Intake System (IRIS).
Access to IRIS is only possible with an IRIS Transmitter Control Code (TCC). An IRIS TCC can be granted only to users who have a U.S. Tax Identification Number (TIN) and a valid Secure Access account through the ID.me portal. For each entity, two users with a U.S. TIN and a valid ID.me Secure Access account are required. If a QI does not meet these requirements, it may engage a third-party transmitter.
We are pleased to inform you that PQS has successfully obtained an IRIS TCC, enabling us to act as a third-party transmitter for withholding agents. In addition, PQS has been approved by the IRS as a software developer. Our software is currently in the testing phase of the IRIS Assurance Testing System (IRIS ATS).
2025 Form 1099: Important Reminders in Brief
Threshold for electronic filing
The threshold for electronic filing was lowered from 250 forms to 10 forms for tax year 2024 and onwards.
Exceptions for the use of the “Chapter 4 Pool of U.S. Payees”
Since the introduction of FATCA, more and more QIs started reporting reportable payments paid out to U.S. non-exempt account holders via Forms 1042-S form using a so-called “Chapter 4 Pool of U.S. Payees”. A QI is generally permitted to report payments made to a U.S. non-exempt account holder on a pooled basis if that account holder is also reported under FATCA.
However, this rule does not apply to all types of account holders, and we have seen many QIs applying the abovementioned exception too broadly. Therefore, please be strongly reminded that a pooled basis reporting of U.S. non-exempt recipients is not available for payments to certain indirect account holders, such as indirect account holders of nonqualified intermediaries (NQI) or flow-through entities (FTE), if these do not fulfill the required specifications under FATCA. Generally, payments paid out to flow-through entities and nonqualified intermediaries are only eligible to be reported via a U.S. Payees Pool if they fulfill the following conditions:
The FTE or NQI is a participating FFI (incl. Reporting Model 2 FFI) or a Registered Deemed-Compliant FFI (incl. Reporting Model 1 FFI)
The FTE or NQI provides a Withholding Statement allocating U.S. non-exempt recipients to a Chapter 4 withholding rate pool
The final recipients of the payments are not subject to Chapter 4 withholding or backup withholding.
If the FTE or NQI does not fulfill these conditions, the QI is still required to report the payments via Form 1099.
In addition, we would like to remind that QIs must continue to apply backup withholding on undocumented U.S. accounts under chapter 61 on reportable payments, if applicable, for the period during which an account is treated as undocumented U.S. account. Accounts subject to backup withholding are still subject to reporting via Forms 1099 and 945.
2025 Form 1099: Filing Requirements
In cases where a QI has to file a 1099 reporting, it must meet one of the following deadlines depending on what and how is submitted:
February 2, 2026 for forwarding all Forms 1099 to recipients (except Form 1099-B, Boxes 8 and 10 on Forms 1099-MISC and Form 1099-S)
February 16, 2026 for forwarding Forms 1099-B, 1099-S and 1099-MISC (if amounts are reported in box 8 or 10) to recipients
March 2, 2026 for filing the 1099 reporting (except those mentioned above) with the IRS on paper or
March 31, 2026 for filing the 1099 reporting (except those mentioned above) with the IRS electronically through the FIRE System or IRIS.
PQS acquired the status third-party transmitter ("TPT") with the IRS and can generate and transmit electronic files such as the electronic 1099 on behalf of QIs to the IRS by using its own TCC and EIN. Should you need our support regarding electronic filing, please do not hesitate to contact us.
Please note that the 1099 reporting on paper cannot be filed using the downloadable PDF. Copies 1, B, 2 and C can be filled out online in a PDF format, but the 1099 paper forms must be filed by ordering originals from the IRS. Should you require original paper forms for the 1099 reporting, they can be ordered from the IRS.
For a 30-day extension of time to file Forms 1099, use Form 8809. The Form 8809 can be filed electronically through the FIRE system no later than the above-described filing deadlines.
Please note that filing the Form 8809 does not extend the deadline for providing copies of the Form 1099 to recipients. If you need additional time to provide copies of Forms 1099 to the recipients, you have to request a 30-day extension of time by fax using the following details:
Internal Revenue Service Technical Services Operation
Attn: Extension of Time Coordinator
Fax: +1 304 579 4105
The letter must include (a) payer name, (b) payer TIN, (c) payer address, (d) type of return (Form 1042-S, Form W-2, specific 1099 family form), (e) a statement that your extension request is for providing statements to recipients, (f) reason for delay, and (g) the signature of the payer or authorized agent.
Please remember that it is the primary responsibility of the QI to ensure that the 1099 reporting has been performed, even if the reporting has been delegated to a custodian.
QDD Form 1120-F Reporting
In addition to Forms 1042 and 1042-S, a QDD needs to submit Forms Schedule Q (Form 1042) and Schedule Q (Form 1120-F) when filing Form 1042 and Form 1120-F annually.
The deadline for filing 2025 Form 1120-F and the Schedule Q (Form 1120-F) is June 15, 2026. By filing Form 7004, the deadline of the submission of Form 1120-F can be extended up to six months provided that Form 7004 is submitted by June 15, 2026.
The Form 1120-F must be submitted electronically via the meF system. PQS can prepare and submit this Form and attachments in its roles as Electronic Return Originator and Transmitter for QDD. If you are interested in engaging us for this service, please contact us.