Box 1 code 01 reported on an IRS form 1042-S is interest paid. See Instructions for form 1042-S, page 37, here. On an IRS form 1040 income tax return, report as interest income reported on IRS form 1099-INT. Down the left side of the screen, click Federal. Down the left side of the screen, click Wages & Income. You may need to click Add more income. Scroll down to Investments and Savings and click on the dropdown menu. Click Start to the right of Interest on 1099-INT.