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                                                                                                      Department of the Treasury
                                                                                                      Internal Revenue Service
2022

Instructions for

Form 1120-PC

U.S. Property and Casualty Insurance Company Income Tax Return

Section references are to the Internal             Future Developments                       See the instructions for Schedule A, 
Revenue Code unless otherwise noted.                                                         Line 13, Other income, later.
                                                   For the latest information about 
Contents                                    Page   developments related to Form              Alternative minimum tax.    For tax 
What's New .  . . . . . . . . . . . . . . . . . 1  1120-PC and its instructions, such as     years beginning after December 31, 
Photographs of Missing Children         . . . . 1  legislation enacted after they were       2022, the Inflation Reduction Act of 
The Taxpayer Advocate Service .         . . . . 1  published, go to IRS.gov/                 2022 (the IRA) imposes a corporate 
How To Get Forms and                               Form1120PC.                               alternative minimum tax (AMT). 
Publications .      . . . . . . . . . . . . . . 2                                            Applicable corporations (within the 
General Instructions .  . . . . . . . . . . . . 2  What's New                                meaning of section 59(k)) may be 
Purpose of Form .         . . . . . . . . . . . 2                                            required to pay this AMT. Short-period 
Who Must File         . . . . . . . . . . . . . 2  Increase in penalty for failure to 
Where To File .       . . . . . . . . . . . . . 2  file. For returns due in 2023, the        filers with a tax year beginning after 
Electronic Filing       . . . . . . . . . . . . 2  minimum penalty for failure to file a tax December 31, 2022, and ending 
When To File .        . . . . . . . . . . . . . 2  return that is more than 60 days late     before December 31, 2023, see 
Who Must Sign .         . . . . . . . . . . . . 3  has increased to the smaller of the tax   section 55 and the instructions for 
Paid Preparer Authorization .           . . . . 3  due or $450. See Late filing of return,   Line 12, Other taxes, later.
Statements .        . . . . . . . . . . . . . . 3  later.
                                                                                             Photographs of
Assembling the Return .           . . . . . . . 3  Form 1120-W now historical.        Form 
                                                                                             Missing Children
Tax Payments          . . . . . . . . . . . . . 4  1120-W, Estimated Tax for 
Estimated Tax Payments              . . . . . . 4                                            The Internal Revenue Service is a 
                                                   Corporations, and the Instructions for 
Interest and Penalties .        . . . . . . . . 4                                            proud partner with the National Center 
                                                   Form 1120-W are now historical. The 
Accounting Methods .            . . . . . . . . 5                                            for Missing & Exploited Children® 
                                                   2022 Form 1120-W (released in 2021) 
Accounting Period .         . . . . . . . . . . 5                                            (NCMEC). Photographs of missing 
                                                   and the 2022 Instructions for Form 
Rounding Off to Whole                                                                        children selected by the Center may 
        Dollars . . . . . . . . . . . . . . . . 5  1120-W (released in 2021) will be the 
                                                                                             appear in instructions on pages that 
Recordkeeping .         . . . . . . . . . . . . 5  last revisions of the form and its 
                                                                                             would otherwise be blank. You can 
Other Forms and                                    instructions. Prior versions will be 
                                                                                             help bring these children home by 
        Statements That May Be                     available on IRS.gov.
        Required .  . . . . . . . . . . . . . . 5                                            looking at the photographs and calling 
Specific Instructions . . . . . . . . . . . . . 6  COVID-19 related credit for quali-        1-800-THE-LOST (1-800-843-5678) if 
Period Covered          . . . . . . . . . . . . 6  fied sick and family leave.               you recognize a child.
Name and Address .            . . . . . . . . . 6  Generally, the credit for qualified sick 
Identifying Information .         . . . . . . . 6  and family leave wages, as enacted        The Taxpayer Advocate 
Employer Identification                            under the Families First Coronavirus      Service
        Number (EIN) .    . . . . . . . . . . . 7  Response Act (FFCRA) and amended 
                                                                                             The Taxpayer Advocate Service 
Section 953 Elections .         . . . . . . . . 7  and extended by the COVID-related 
                                                                                             (TAS) is an independent 
Final Return, Name Change,                         Tax Relief Act of 2020, and the credit 
                                                                                             organization within the IRS that helps 
        Address Change, or                         for qualified sick and family leave 
                                                                                             taxpayers and protects taxpayer 
        Amended Return .      . . . . . . . . . 8  wages, as enacted under the 
                                                                                             rights. TAS's job is to ensure that 
Taxable Income .          . . . . . . . . . . . 8  American Rescue Plan Act of 2021 
                                                                                             every taxpayer is treated fairly and 
Tax Computation and                                (the ARP), have expired. However, 
        Payments .    . . . . . . . . . . . . . 8                                            knows and understands their rights 
Schedule A .        . . . . . . . . . . . . .   10 employers that paid qualified sick and 
                                                                                             under the Taxpayer Bill of Rights.
Schedule B, Part I .        . . . . . . . . .   17 family leave wages in 2022 for leave 
Schedule B, Part II .       . . . . . . . . .   18 taken after March 31, 2020, and             As a taxpayer, the corporation has 
Schedule C .        . . . . . . . . . . . . .   18 before October 1, 2021, may be            rights that the IRS must abide by in its 
Schedule E .        . . . . . . . . . . . . .   20 eligible to claim a credit for qualified  dealings with the corporation. TAS 
Schedule F .        . . . . . . . . . . . . .   21 sick and family leave wages in 2022.      can help the corporation if:
Schedule G .        . . . . . . . . . . . . .   22 See the March 2022 revision of the        • A problem is causing financial 
Schedule H .        . . . . . . . . . . . . .   22 Instructions for Form 941 and the         difficulty for the business;
Schedule I .      . . . . . . . . . . . . . .   22 2022 Instructions for Form 944 for        • The business is facing an 
Schedule L        . . . . . . . . . . . . . .   25 more information. There is no double      immediate threat of adverse action; 
Schedule M-1 .        . . . . . . . . . . . .   25 tax benefit allowed and the amounts       and
Index . . . . . . . . . . . . . . . . . . . . . 27 claimed are reportable as income.         • The corporation has tried 
                                                                                             repeatedly to contact the IRS but no 

Feb 9, 2023                                                    Cat. No. 64537I

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one has responded, or the IRS hasn't
responded by the date promised. Where To File
The TAS tax toolkit at File the corporation's return at the applicable IRS address listed below.

TaxpayerAdvocate.IRS.gov can help
the corporation understand these If the corporation's principal business, office,
rights. or agency is located in: Use the following address:
TAS has offices in every state, the Department of the Treasury
District of Columbia, and Puerto Rico. The United States Internal Revenue Service
Ogden, UT 84201-0012
Local advocates' numbers are in their
local directories and at Internal Revenue Service
TaxpayerAdvocate.IRS.gov/Contact- A foreign country or U.S. possession P.O. Box 409101
Us. The corporation can also call TAS Ogden, UT 84409
at 877-777-4778.
TAS also works to resolve Who Must File insurance company that makes an
large-scale or systemic problems that Every domestic nonlife insurance election under section 953(d) (for
affect many taxpayers. If the company and every foreign information on these elections, see
corporation knows of one of these corporation that would qualify as a the instructions for item D). If a foreign
broad issues, please report it to TAS nonlife insurance company subject to insurance company electing under
through the Systemic Advocacy taxation under section 831, if it were a section 953(c)(3)(C) wholly owns a
Management System at IRS.gov/ U.S. corporation, must file Form domestic DE, the DE is required to file
SAMS. 1120-PC. This includes organizations Form 5472, Information Return of a
described in section 501(m)(1) that 25% Foreign-Owned U.S. Corporation
For more information, go to or a Foreign Corporation Engaged in a
provide commercial-type insurance
IRS.gov/Advocate. U.S. Trade or Business. For additional
and organizations described in
section 833. information and coordination with
How To Get Forms Form 5472 filing by the domestic DE,
and Publications Exceptions. A nonlife insurance see the Instructions for Form 5472.
company that is:
Internet. You can access the IRS • Exempt under section 501(c)(15) Electronic Filing
website 24 hours a day, 7 days a should file Form 990, Return of Go to IRS.gov/Filing for the latest
week, at IRS.gov to: Organization Exempt From Income information. Also, go to IRS.gov/MeF
• Download forms, instructions, and Tax; and click on the link for “Modernized
publications; • Subject to taxation under section e-File Forms” for information on which
• Order IRS products online; 831, and disposes of its insurance forms the corporation can or must
• Research your tax questions online; business and reserves, or otherwise e-file.
• Search publications online by topic ceases to be taxed under section 831,
or keyword; but continues its corporate existence When To File
• View Internal Revenue Bulletins while winding up and liquidating its
Generally, a corporation must file its
(IRBs) published in recent years; and affairs, should file Form 1120, U.S.
income tax return by the 15th day of
• Sign up to receive local and Corporation Income Tax Return.
national tax news by email. the 4th month after the end of its tax
Life insurance companies. Life year. A new corporation filing a
Tax forms and publications. The insurance companies should file Form short-period return must generally file
corporation can view, print, or 1120-L, U.S. Life Insurance Company by the 15th day of the 4th month after
download all of the forms and Income Tax Return. the short period ends. A corporation
publications it may need on IRS.gov/ that has dissolved must generally file
FormsPubs. Otherwise, the Foreign-owned domestic disregar-
corporation can go to IRS.gov/ ded entities. If a foreign person, by the 15th day of the 4th month after
OrderForms to place an order and including a foreign corporation, wholly the date it dissolved.
have forms mailed to it. The IRS will owns a domestic disregarded entity However, a corporation with a fiscal
process your order for forms and (DE), the domestic DE is treated as a tax year ending June 30 must file by
publications as soon as possible. domestic corporation separate from the 15th day of the 3rd month after the
its owner (the foreign corporation) for end of its tax year. A corporation with
purposes of the reporting a short tax year ending any time in
General Instructions requirements under section 6038A June will be treated as if the short year
that apply to 25% foreign-owned ended on June 30, and must file by
Purpose of Form domestic corporations. These rules the 15th day of the 3rd month after the
Use Form 1120-PC, to report the apply to a domestic DE owned by a end of its tax year.
income, gains, losses, deductions, foreign insurance company that
and credits, and to figure the income makes an election under section If the due date falls on a Saturday,
tax liability of insurance companies, 953(c)(3)(C) but do not apply to a Sunday, or legal holiday, the
other than life insurance companies. domestic DE owned by a foreign corporation can file on the next
business day.
-2- Instructions for Form 1120-PC (2022)

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Private Delivery Services                  • Include their Preparer Tax             831 that is not required to file an 
Corporations can use certain private       Identification Number (PTIN); and        annual statement must file a copy of 
delivery services (PDSs) designated        • Give a copy of the return to the       the pro forma annual statement. A 
by the IRS to meet the “timely mailing     taxpayer.                                penalty for the late filing of a return 
as timely filing” rule for tax returns. Go                                          may be imposed for not including the 
                                           Note. A paid preparer may sign 
to IRS.gov/PDS for the current list of                                              annual statement when the return is 
                                           original or amended returns by rubber 
designated services.                                                                filed. However, see Electronic filing, 
                                           stamp, mechanical device, or             next.
   The PDS can tell you how to get         computer software program.
written proof of the mailing date.                                                  Electronic filing.  If the domestic 
   For the IRS mailing address to use      Paid Preparer                            or foreign nonlife insurance company 
                                                                                    files Form 1120-PC electronically, do 
if you are using a PDS, go to IRS.gov/     Authorization                            not attach the annual statement or pro 
PDSstreetAddresses.                        If the corporation wants to allow the    forma annual statement to the 
        Private delivery services          IRS to discuss its 2022 tax return with  electronically filed return. However, 
                                           the paid preparer who signed it, check   you must provide a copy of the annual 
CAUTION boxes. You must use the U.S. 
   !    cannot deliver items to P.O.       the “Yes” box in the signature area of   statement or pro forma annual 
Postal Service to mail any item to an      the return. This authorization applies   statement to the IRS if requested and 
IRS P.O. box address.                      only to the individual whose signature   retain it with your other tax records for 
                                           appears in the “Paid Preparer Use        the period required by the regulations.
Extension of Time To File                  Only” section of the return. It does not 
                                           apply to the firm, if any, shown in that Reconciliation.     Corporations that 
File Form 7004, Application for                                                     do not file a Schedule M-3 (Form 
                                           section.
Automatic Extension of Time To File                                                 1120-PC), Net Income (Loss) 
Certain Business Income Tax,                 If the “Yes” box is checked, the 
                                                                                    Reconciliation for U.S. Property and 
Information, and Other Returns, to         corporation is authorizing the IRS to 
                                                                                    Casualty Insurance Companies With 
request an extension of time to file.      call the paid preparer to answer any 
                                                                                    Total Assets of $10 Million or More, 
Generally, the corporation must file       questions that may arise during the 
                                                                                    with Form 1120-PC must attach a 
Form 7004 by the regular due date of       processing of its return. The 
                                                                                    statement that reconciles the NAIC 
the return. See the Instructions for       corporation is also authorizing the 
                                                                                    annual statement to Form 1120-PC.
Form 7004.                                 paid preparer to:
                                           • Give the IRS any information that is 
Who Must Sign                              missing from the return;                 Assembling the Return
The return must be signed and dated        • Call the IRS for information about     To ensure that the corporation's tax 
by:                                        the processing of the return or the      return is correctly processed, attach 
• The president, vice president,           status of any related refund or          all schedules and other forms after 
treasurer, assistant treasurer, chief      payment(s); and                          page 9 of Form 1120-PC in the 
accounting officer; or                     • Respond to certain IRS notices         following order.
• Any other corporate officer (such as     about math errors, offsets, and return   1. Schedule N (Form 1120).
a tax officer) authorized to sign.         preparation.                             2. Form 4136.
   If a return is filed on behalf of a       The corporation is not authorizing     3. Form 8978.
corporation by a receiver, trustee, or     the paid preparer to receive any         4. Form 965-B.
assignee, the fiduciary must sign the      refund check, bind the corporation to 
return instead of the corporate officer.   anything (including any additional tax   5. Form 8941.
Returns and forms signed by a              liability), or otherwise represent the   6. Form 3800.
receiver or trustee in bankruptcy on       corporation before the IRS.              7. Additional schedules in 
behalf of a corporation must be              The authorization will automatically   alphabetical order.
accompanied by a copy of the order         end no later than the due date           8. Additional forms in numerical 
or instructions of the court authorizing   (excluding extensions) for filing the    order.
signing of the return or form.             corporation's 2023 tax return. If the    9. Supporting statements and 
Paid Preparer Use Only section.        If  corporation wants to expand the paid     attachments.
an employee of the corporation             preparer's authorization or revoke the 
completes Form 1120-PC, the paid           authorization before it ends, see Pub.   Complete every applicable entry 
preparer space should remain blank.        947, Practice Before the IRS and         space on Form 1120-PC. Do not enter 
Anyone who prepares Form 1120-PC           Power of Attorney.                       “See Attached” or “Available Upon 
but does not charge the corporation                                                 Request” instead of completing the 
should not complete that section.          Statements                               entry spaces. If more space is needed 
                                                                                    on the forms or schedules, attach 
Generally, anyone who is paid to           NAIC annual statement.                   separate sheets using the same size 
prepare the return must sign it and        Regulations section 1.6012-2(c)          and format as the printed forms. If 
complete the section.                      requires that the National Association   there are supporting statements and 
   The paid preparer must complete         of Insurance Commissioners (NAIC)        attachments, arrange them in the 
the required preparer information and:     annual statement be filed with Form      same order as the schedules or forms 
• Sign the return in the space             1120-PC. A foreign insurance             they support and attach them last. 
provided for the preparer's signature,     company subject to tax under section 

Instructions for Form 1120-PC (2022)                        -3-

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Show the totals on the printed forms. p.m. Eastern time the day before the • Its tax liability for the current year,
Enter the corporation's name and date a deposit is due, it can still make or
employer identification number (EIN) the deposit on time by using the • Its prior year tax.
on each supporting statement or Federal Tax Collection Service See section 6655 for details and
attachment. (FTCS). Before using the same-day exceptions, including special rules for
wire payment method, the corporation large corporations.
Tax Payments will need to make arrangements with
Use Form 2220, Underpayment of
Generally, the corporation must pay its financial institution ahead of time
Estimated Tax by Corporations, to
any tax due in full no later than the regarding availability, deadlines, and
see if the corporation owes a penalty
due date for filing its tax return (not costs. Financial institutions may
and to figure the amount of the
including extensions). See the charge a fee for payments made this
penalty. If Form 2220 is completed,
instructions for line 17. If the due date way. To learn more about making a
enter the penalty on line 16. See the
falls on a Saturday, Sunday, or legal same-day wire payment, go to
instructions for line 16.
holiday, the payment is due on the IRS.gov/SameDayWire.
next day that isn't a Saturday, Foreign insurance companies,
Sunday, or legal holiday. Estimated Tax Payments ! see Notice 90-13, 1990-1
Generally, the following rules apply to CAUTION C.B. 321, before computing
Electronic Deposit the corporation's payments of estimated tax.
Requirement estimated tax.
Corporations must use electronic • The corporation must make Interest and Penalties
funds transfer to make all federal tax installment payments of estimated tax
deposits (such as deposits of if it expects its total tax for the year If the corporation receives a
employment, excise, and corporate (less applicable credits) to be $500 or ! notice about penalties after it
income tax). Generally, electronic more. CAUTION files its return, send the IRS
funds transfers are made using the • The installments are due by the an explanation and we will determine
Electronic Federal Tax Payment 15th day of the 4th, 6th, 9th, and 12th if the corporation meets the criteria for
System (EFTPS). months of the tax year. If any date the reasonable-cause exception to the
If the corporation does not want to falls on a Saturday, Sunday, or legal penalties. Do not attach an
use EFTPS, it can arrange for its tax holiday, the installment is due on the explanation when the corporation's
professional, financial institution, next regular business day. return is filed.
payroll service, or other trusted third • The corporation must use electronic
party to make deposits on its behalf. funds transfer to make installment Interest. Interest is charged on taxes
Also, it can arrange for its financial payments of estimated tax. paid late even if an extension of time
institution to submit a same-day • If, after the corporation figures and to file is granted. Interest is also
payment (discussed later) on its deposits estimated tax, it finds that its charged on penalties imposed for
behalf. EFTPS is a free service tax liability for the year will be more or failure to file, negligence, fraud,
provided by the Department of the less than originally estimated, it may substantial valuation misstatements,
Treasury. Services provided by a tax have to refigure its required substantial understatements of tax,
professional, financial institution, installments. If earlier installments and reportable transaction
payroll service, or other third party were underpaid, the corporation may understatements from the due date
may have a fee. owe a penalty. See Estimated tax (including extensions) to the date of
penalty below. payment. The interest charge is
To get more information about • If the corporation overpaid figured at a rate determined under
EFTPS or to enroll in EFTPS, go to estimated tax, it may be able to get a section 6621.
EFTPS.gov or call 800-555-4477. To quick refund by filing Form 4466, Late filing of return. A corporation
contact EFTPS using Corporation Application for Quick that does not file its tax return by the
Telecommunications Relay Services Refund of Overpayment of Estimated due date, including extensions, may
(TRS) for people who are deaf, hard Tax. See the instructions for Form be penalized 5% of the unpaid tax for
of hearing, or have a speech 1120-PC, lines 15c and 15e, later. each month or part of a month the
disability, dial 711 and provide the return is late, up to a maximum of 25%
TRS assistant the 800-555-4477 See section 6655 for more
number above or 800-733-4829. information on estimated taxes. of the unpaid tax. The minimum
penalty for a return that is over 60
Depositing on time. To make Estimated tax penalty. A days late is the smaller of the tax due
EFTPS deposits on time, the corporation that does not make or $450 (adjusted for inflation). The
corporation must submit the estimated tax payments when due penalty will not be imposed if the
transaction by 8 p.m. Eastern time the may be subject to an underpayment corporation can show that the failure
day before the date the deposit is due. penalty for the period of to file on time was due to reasonable
If the corporation uses a third party to underpayment. Generally, a cause. See Caution, earlier.
make deposits on its behalf, they may corporation is subject to the penalty if
have different cutoff times. its tax liability is $500 or more and it Late payment of tax. A corporation
did not timely pay at least the smaller that does not pay the tax when due
Same-day wire payment option. If of: may generally be penalized / of 1% 1 2
the corporation fails to submit a of the unpaid tax for each month or
deposit transaction on EFTPS by 8 part of a month the tax is not paid, up

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to a maximum of 25% of the unpaid the method used must clearly show company is the calendar year.
tax. See Caution, earlier. taxable income. However, if an insurance company
joins in the filing of a consolidated
Trust fund recovery penalty. This Change in accounting method.
return, it may adopt the tax year of the
penalty may apply if certain excise, Generally, the corporation must get
common parent corporation even if
income, social security, and Medicare IRS consent to change either an
that year is not a calendar year.
taxes that must be collected or overall method of accounting or the
withheld are not collected or withheld, accounting treatment of any material
or these taxes are not paid. These item for income tax purposes. To Rounding Off to Whole
taxes are generally reported on: obtain consent, the corporation must Dollars
• Form 720, Quarterly Federal Excise generally file Form 3115, Application The corporation may enter decimal
Tax Return; for Change in Accounting Method, points and cents when completing its
• Form 941, Employer's during the tax year for which the tax return. However, the corporation
QUARTERLY Federal Tax Return; change was requested. See the should round off cents to whole
• Form 944, Employer's ANNUAL Instructions for Form 3115 and Pub. dollars on its return, forms, and
Federal Tax Return; or 538, Accounting Periods and schedules to make completing its
• Form 945, Annual Return of Methods, for more information and return easier. The corporation must
Withheld Federal Income Tax. exceptions, including filing exceptions either round off all amounts on its
The trust fund recovery penalty for qualified small business taxpayers. return to whole dollars, or use cents
may be imposed on all persons who Also see the Instructions for Form for all amounts. To round, drop
are determined by the IRS to be 3115 for procedures that may apply amounts under 50 cents and increase
responsible for collecting, accounting for obtaining automatic consent to amounts from 50 to 99 cents to the
for, or paying over these taxes, and change certain methods of next dollar. For example, $8.40
who acted willfully in not doing so. accounting, non-automatic change rounds to $8 and $8.50 rounds to $9.
The penalty is equal to the full amount procedures, and reduced Form 3115 If two or more amounts must be
of the unpaid trust fund tax. See the filing requirements. added to figure the amount to enter on
Instructions for Form 720 or Pub. 15 Safe harbor method of accounting a line, include cents when adding the
(Circular E), Employer's Tax Guide, for premium acquisition expenses. amounts and round off only the total.
for details, including the definition of Insurance companies subject to tax
responsible persons. under section 831 are provided with a Recordkeeping
safe harbor method of accounting for Keep the corporation's records for as
Note. The trust fund recovery penalty premium acquisition expenses. Form long as they may be needed for the
will not apply to any amount of trust 3115 must be filed in order to change administration of any provision of the
fund taxes an employer holds back in to the safe harbor method. For more Internal Revenue Code. Usually,
anticipation of the credit for qualified information, see the Instructions for records that support an item of
sick and family leave wages or the Form 3115. income, deduction, or credit on the
employee retention credit that they
are entitled to. See Pub. 15 for more Certain changes in method of ac- return must be kept for 3 years from
information. counting for organizations to the date the return is due or filed,
which section 833 applies. Blue whichever is later. Keep records that
Other penalties. Other penalties can Cross or Blue Shield organizations verify the corporation's basis in
be imposed for negligence, under section 833(c)(2), or property for as long as they are
substantial understatement of tax, organizations described in section needed to figure the basis of the
reportable transaction 833(c)(3), can obtain automatic original or replacement property.
understatements, and fraud. See consent to change the method of The corporation should keep
sections 6662, 6662A, and 6663. accounting for unearned premiums copies of all filed returns. They help in
resulting from either a failure to meet preparing future and amended returns
Accounting Methods the medical loss ratio (MLR) and in the calculation of earnings and
Figure taxable income using the requirements of section 833(c)(5), or profits.
method of accounting regularly used meeting the MLR requirements after
in keeping the corporation's books failing to do so in a prior year. Form Other Forms and
and records. In all cases, the method 3115 must be filed in order to make Statements That May Be
used must clearly show taxable this change in accounting method.
income. Permissible methods include See the Instructions for Form 3115. Required
cash, accrual, or any other method Reportable transaction disclosure
authorized by the Internal Revenue Accounting Period statement. Participants in any
Code. An insurance company must figure its reportable transaction must file Form
The gross amounts of underwriting taxable income on the basis of a tax 8886, Reportable Transaction
and investment income should be year. A tax year is the annual Disclosure Statement. See the
computed on the basis of the accounting period an insurance Instructions for Form 8886.
Statement of Income of the NAIC company uses to keep its records and Reportable transactions by materi-
annual statement to the extent not report its income and expenses. al advisors. Material advisors to any
inconsistent with the Internal Revenue As a general rule under section reportable transaction must file Form
Code and its regulations. In all cases, 843, the tax year for every insurance 8918, Material Advisor Disclosure

Instructions for Form 1120-PC (2022) -5-

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Statement. See the Instructions for section 362(e)(2), the transferor and practice for entering the name of the
Form 8918. the transferee corporation may elect, state or province and postal code.
under section 362(e)(2)(C), to reduce
Transfers to a corporation control- If the corporation receives its mail
the transferor's basis in the stock
led by the transferor. Every in care of a third party (such as an
received instead of reducing the
significant transferor (as defined in accountant or an attorney), enter on
transferee corporation's basis in the
Regulations section 1.351-3(d)(1)) the street address line “C/O” followed
property transferred. Once made, the
that receives stock of a corporation in by the third party's name and street
election is irrevocable. For more
exchange for property in a address or P.O. box.
information, see section 362(e)(2) and
nonrecognition event must include the
Regulations section 1.362-4. If an
statement required by Regulations Item A. Identifying
election is made, a statement must be
section 1.351-3(a) on or with the Information
filed in accordance with Regulations
transferor's tax return for the tax year
section 1.362-4(d)(3).
of the exchange. The transferee Consolidated Return
corporation must include the Other forms and statements. See If an affiliated group of corporations
statement required by Regulations Pub. 542, Corporations, for a list of includes one or more domestic life
section 1.351-3(b) on or with its return other forms and statements a insurance companies taxed under
for the tax year of the exchange, corporation may need to file in section 801, the common parent may
unless all the required information is addition to the forms and statements elect to treat those companies as
included in any statement(s) provided discussed throughout these includible corporations. The life
by a significant transferor that is instructions. insurance companies must have been
attached to the same return for the members of the group for the 5 tax
same section 351 exchange. If the years immediately preceding the tax
transferor or transferee corporation is Specific Instructions year for which the election is made.
a controlled foreign corporation See section 1504(c)(2) and
(CFC), each U.S. shareholder (within Period Covered Regulations section 1.1502-47(b)(12).
the meaning of section 951(b)) must Generally, file the 2022 return for
include the required statement on or calendar year 2022. However, if an Corporations filing a consolidated
with its return. insurance company joins in the filing return must check Item A, box 1, and
of a consolidated return, it may adopt attach Form 851, Affiliations
Distributions under section 355. the tax year of the common parent Schedule, and other supporting
Every corporation that makes a corporation even if that year is not a statements to the return. Also, for the
distribution of stock or securities of a calendar year. For a fiscal or short tax first year a subsidiary corporation is
controlled corporation, as described year return, fill in the tax year space at being included in a consolidated
in section 355 (or so much of section the top of the form. return, attach Form 1122,
356 as it relates to section 355), must Authorization and Consent of
Subsidiary Corporation To Be
include the statement required by Name and Address
Included in a Consolidated Income
Regulations section 1.355-5(a) on or Enter the corporation's true name (as Tax Return, to the parent's
with its return for the year of the set forth in the charter or other legal consolidated return. Attach a separate
distribution. A significant distributee document creating it), address, and Form 1122 for each new subsidiary
(as defined in Regulations section EIN on the appropriate lines. Enter the being included in the consolidated
1.355-5(c)) that receives stock or address of the corporation's principal return.
securities of a controlled corporation office or place of business. Include
must include the statement required the suite, room, or other unit number File supporting statements for each
by Regulations section 1.355-5(b) on after the street address. If the post corporation included in the
or with its return for the year of receipt. office does not deliver mail to the consolidated return. Do not use Form
If the distributing or distributee street address and the corporation 1120-PC as a substitute for the
corporation is a CFC, each U.S. has a P.O. box, show the box number supporting statement. On the
shareholder (within the meaning of instead. supporting statement, use columns to
section 951(b)) must include the show the following, both before and
statement on or with its return. Note. Do not use the address of the after adjustments.
Dual-consolidated losses. If a registered agent for the state in which 1. Items of gross income and
domestic corporation incurs a the corporation is incorporated. For deductions.
dual-consolidated loss (as defined in example, if a business is incorporated
2. A computation of taxable
Regulations section 1.1503(d)-1(b) in Delaware or Nevada and the
income.
(5)), the corporation (or consolidated corporation's principal office is located
group) may need to attach a domestic in Little Rock, Arkansas, the 3. Balance sheets as of the
use agreement and/or an annual corporation should enter the Little beginning and end of the tax year.
certification, as provided in Rock address. 4. A reconciliation of income per
Regulations sections 1.1503(d)-6(d) If the corporation has a foreign books with income per return.
and (g). address, include the city or town, 5. A reconciliation of retained
state or province, country, and foreign earnings.
Election to reduce basis under
postal code. Do not abbreviate the
section 362(e)(2)(C). If property is Enter on Form 1120-PC the totals
country name. Follow the country's
transferred to a corporation subject to for each item of income, gain, loss,
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expense, or deduction, net of return), for all life members of the subsidiaries should enter “Applied
eliminating entries for intercompany consolidated group. For” in the space for the EIN on their
transactions between corporations returns. The subsidiaries' returns are
within the consolidated group. Attach Schedule M-3 (Form 1120-PC) identified under the parent
consolidated balance sheets and a A nonlife insurance company with corporation's EIN.
reconciliation of consolidated retained total assets (nonconsolidated or
earnings. consolidated for all companies For more information, see the
included within a tax consolidation Instructions for Form SS-4.
For more information on group) of $10 million or more on the
consolidated returns, see the last day of the tax year must file Item D. Section 831(b) and
regulations under section 1502. Schedule M-3 (Form 1120-PC) Section 953 Elections
instead of Schedule M-1. A
Section 831(b) election. Check the
Note. If a nonlife insurance company corporation filing Form 1120-PC that
831(b) box if the insurance company
is a member of an affiliated group, file is not required to file Schedule M-3
elects to be taxed on taxable
Form 1120-PC as an attachment to may voluntarily file Schedule M-3
investment income in lieu of the tax
the consolidated return in addition to instead of Schedule M-1.
the supporting statements discussed otherwise applicable under section
earlier. Across the top of page 1 of If you are filing Schedule M-3 831(a). Section 831(b) applies to a
Form 1120-PC, enter “Supporting (Form 1120-PC), check Item A, box 3, small company, as defined under
Statement to Consolidated Return.” at the top of page 1 of Form 1120-PC. section 831(b)(2)(A), if such company
See the Instructions for Schedule M-3 meets the diversification requirements
Life-Nonlife Consolidated (Form 1120-PC) for more details. of section 831(b)(2)(B) and such
Return corporation elects the application of
Note. If you do not file Schedule M-3
If the corporation is the common section 831(b) for such tax year under
(Form 1120-PC) with Form 1120-PC,
parent of a life-nonlife consolidated section 831(b)(2)(A)(iii). See the
see Reconciliation under Statements,
group, check Item A, boxes 1 and 2. instructions for Schedule I, Question
earlier. 14, later. See Regulations section
Filing requirements. The common 301.9100-8(a) for the rules regarding
parent of a life-nonlife consolidated Item B. Employer the timing and manner of making the
group is required to do the following. Identification Number election under section 831(b)(2)(A)
• File the applicable consolidated (iii).
corporate income tax return as one of (EIN)
the following: a Form 1120-L, where Enter the corporation's EIN. If the Note. The election under section
the common parent is a life insurance corporation does not have an EIN, it 831(b)(2)(A)(iii) applies to the tax year
company; a Form 1120-PC, where the must apply for one. An EIN can be for which made and for all subsequent
common parent is an insurance applied for in any of the following tax years for which a corporation is a
company, other than a life insurance ways. small company, as defined under
company; or a Form 1120, where the • Online—Go to section 831(b)(2)(A), and such
common parent is any other type of IRS.gov/EIN. The EIN is issued corporation meets the diversification
corporation. immediately once the application requirements of section 831(b)(2)(B).
• Indicate clearly on the face of the information is validated. Once made, an election under section
return that the corporate tax return is a • By faxing or mailing Form SS-4, 831(b)(2)(A)(iii) may only be revoked
life-nonlife return. This requirement is Application for Employer Identification with the consent of the Secretary.
satisfied by checking Item A, boxes 1 Number.
Section 953 elections. Check the
and 2. Corporations located in the applicable box if the corporation is a
• Show any setoffs required by ! United States or U.S. foreign corporation and elects under:
paragraphs (e), (h), and (j) of CAUTION possessions can use the
1. Section 953(c)(3)(C) to treat its
Regulations section 1.1502-47. online application. Foreign
related person insurance income as
• Report separately the nonlife corporations may call 267-941-1099
effectively connected with the conduct
consolidated taxable income or loss, (not a toll-free number) for more
of a trade or business in the United
determined under Regulations section information on obtaining an EIN. See
States, or
1.1502-47(f), on a Form 1120 or the Instructions for Form SS-4.
1120-PC (whether filed by the 2. Section 953(d) to be treated as
common parent or as an attachment EIN applied for, but not received. If a domestic corporation.
to the consolidated return), for all the corporation has not received its Generally, a foreign corporation
nonlife members of the consolidated EIN by the time the return is due, making either section 953 election
group. enter “Applied For” and the date the must file its return by sending it to:
• Report separately the consolidated corporation applied in the space for
life insurance company taxable the EIN. However, if the corporation is Internal Revenue Service Center
income (as defined by Regulations filing its return electronically, an EIN is P.O. Box 409101
section 1.1502-47(b)(3)) determined required at the time the return is filed. Ogden, UT 84409
under Regulations section 1.1502-47, An exception applies to subsidiaries
on a Form 1120-L (whether filed by of corporations whose returns are See Notice 87-50, 1987-2 C.B. 357;
the common parent or as an filed with the parent's electronically and Rev. Proc. 2003-47, 2003-28
attachment to the consolidated filed consolidated Form 1120. These

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I.R.B. 55, for the procedural rules, Tax Computation and increase in taxable income of a
election statement formats, and filing reciprocal as a result of this limitation
Payments
addresses for making the respective is taxed at the highest rate of tax
elections under section 953(c)(3)(C) Line 3. Member of a control group. specified in section 11(b).
or section 953(d). If the corporation is a member of a Make no entry on line 5 if the
controlled group, check the box on mutual insurance company's taxable
Note. Once either election is made, it line 3. Complete and attach income before including the section
will apply to the tax year for which Schedule O (Form 1120), Consent 835(b) amount is $100,000 or more.
made and all subsequent tax years Plan and Apportionment Schedule for Otherwise, this tax is 21% of the
unless revoked with the consent of the a Controlled Group. Component
section 835(b) amount. If an entry is
IRS. Also, any loss of a foreign members of a controlled group must made on line 5, attach a statement
corporation electing to be treated as a use Schedule O (Form 1120) to report showing how the tax was computed.
domestic insurance company under the apportionment of certain tax
section 953(d) will be treated as a benefits between the members of the Reciprocal underwriters making the
dual-consolidated loss and may not group. See Schedule O (Form 1120) section 835(a) election are allowed a
be used to reduce the taxable income and the Instructions for Schedule O credit on line 15h for the amount of tax
of any other member of the affiliated (Form 1120) for more information. paid by the attorney-in-fact that is
group for this tax year or any other tax related to the income received by the
year. Line 4. Income tax. Corporations attorney-in-fact from the reciprocal in
figure their tax by multiplying taxable the tax year.
Note. If a section 953(d) election is income by 21% (0.21). See section 835 and the related
made, include the additional tax Deferred tax under section regulations for special rules and
required to be paid on page 1, line 13. 1291. If the corporation was a information regarding the statements
On the dotted line to the left of line 13, shareholder in a passive foreign required to be attached to the return.
enter “Section 953(d)” and the investment company (PFIC) and Line 6. Base erosion minimum tax
amount. Attach a statement showing received an excess distribution or amount. If the corporation had gross
the computation. See section 953(d) disposed of its investment in the PFIC receipts of at least $500 million in any
for more details. during the year, it must include the 1 of the 3 preceding tax years, see
total increase in taxes due under section 59A and the Instructions for
Item E. Final Return, Name section 1291(c)(2) from Form 8621 in Form 8991 for further guidance on the
Change, Address Change, the amount entered on line 4. On the determination of the amount of base
or Amended Return dotted line next to line 4, enter erosion minimum tax.
Indicate a final return, name change, “Section 1291” and the amount.
Line 8a. Foreign tax credit. To find
address change, or amended return Do not include on line 4 any
out when a corporation can take the
by checking the appropriate box. interest due under section 1291(c)(3).
credit for payment of income tax to a
Instead, include the amount of interest
foreign country or U.S. possession,
Note. If a change in address or owed on line 12.
see Form 1118, Foreign Tax
responsible party occurs after the For more information on reporting Credit—Corporations.
return is filed, use Form 8822-B, the deferred tax and interest, see the
Change of Address or Responsible Instructions for Form 8621. Line 8b. Credit from Form 8834.
Party — Business, to notify the IRS. Enter any qualified electric vehicle
See the instructions for Form 8822-B Additional tax under section passive activity credits from prior
for details. 197(f). A corporation that elects to years allowed for the current tax year
recognize gain and pay tax on the from Form 8834, Qualified Electric
Taxable Income sale of a section 197 intangible under Vehicle Credit. Attach Form 8834.
the related person exception to the
Line 1, Taxable income, and line 2, Line 8c. General business credit.
anti-churning rules should include any
Taxable investment income. If the Enter on line 8c the allowable credit
additional tax due in the total for
corporation is a small company as from Form 3800, General Business
line 4. On the dotted line next to line 4,
defined in section 831(b)(2) and Credit, Part II, line 38.
enter “Section 197” and the amount.
elects under section 831(b)(2)(A)(iii) The corporation is required to file
See section 197(f)(9)(B)(ii).
to be taxed on taxable investment Form 3800 to claim most business
income, complete Schedule B (ignore Line 5. Enter amount of tax that a credits. For a list of allowable credits,
Schedule A) and enter the amount reciprocal must include. A mutual see Form 3800. Also, see the
from Schedule B, line 21, on page 1, insurance company that is an applicable credit form and its
line 2. Also, complete Schedule I, interinsurer or reciprocal underwriter instructions.
Question 14. All other corporations may elect, under section 835, to limit
should complete Schedule A (ignore the deduction for amounts paid or Line 8d. Credit for prior year mini-
Schedule B) and enter on page 1, incurred to a qualifying mum tax. Enter any allowable credit
line 1, the amount from Schedule A, attorney-in-fact to the amount of the from Form 8827, Credit for Prior Year
line 37. deductions of the attorney-in-fact Minimum Tax—Corporations.
allocable to the income received by Complete and attach Form 8827.
the attorney-in-fact from the Line 8e. Bond credits from Form
reciprocal. If this election is made, any 8912. Enter the allowable credits

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from Form 8912, Credit to Holders of Line 11. Personal holding compa- must be recaptured. See Form 8845
Tax Credit Bonds, line 12. ny tax. A corporation (other than a and section 45A.
Line 10. Foreign corporations. A corporation described in section • Recapture of new markets credit
foreign corporation carrying on an 542(c)) is taxed as a personal holding (see Form 8874, New Markets Credit,
insurance business in the United company (PHC) under section 542 if: and Form 8874-B, Notice of
States is taxed as a domestic • At least 60% of its adjusted ordinary Recapture Event for New Markets
insurance company on its income gross income for the tax year is PHC Credit).
effectively connected with the conduct income, and • Recapture of employer-provided
of a trade or business in the United • At any time during the last half of childcare facilities and services credit
States (see sections 864(c) and 897 the tax year more than 50% in value of (see Form 8882).
for a definition). its outstanding stock is directly or • Interest on deferred tax attributable
indirectly owned by five or fewer to certain nondealer installment
Generally, any other U.S.-source obligations (see section 453A(c)).
individuals.
income received by the foreign • Interest due on deferred gain (see
corporation is taxed at 30% (or at a See Schedule PH (Form 1120),
section 1260(b)).
lower treaty rate) under section 881. If U.S. Personal Holding Company
• Interest due under section 1291(c)
the corporation has this income, (PHC) Tax, for definitions and details
(3). See Form 8621 and its
attach a statement showing the kind on how to figure the tax.
instructions.
and amount of income, the tax rate, Line 12. Other taxes. Include any of • Alternative tax on qualifying
and the amount of tax. Enter the tax the following taxes and interest in the shipping activities (see Form 8902).
on line 10. However, see Reduction of total on line 12. Check the appropriate
Alternative minimum tax (AMT).
section 881 tax, later. box(es) for the form, if any, used to
Applicable corporations subject to
compute the total.
Note. Interest received from certain AMT under section 59(k), if filing a
portfolio debt investments that were Recapture of investment credit. return for a short tax year that begins
issued after July 18, 1984, is not If the corporation disposed of in 2023 and ends in 2023, include on
subject to the tax. See section 881(c). investment credit property or changed line 12 any corporate AMT imposed
See section 842 for more its use before the end of its useful life under section 55, as amended by the
information. or recovery period, it may owe a tax. Inflation Reduction Act of 2022.
See Form 4255, Recapture of Check the “Other” box. On the dotted
Minimum effectively connected Investment Credit. line next to line 12, enter “CAMT” and
net investment income. See the AMT amount. Attach a detailed
section 842(b) and Notice 89-96, Recapture of low-income
statement showing the computation of
1989-2 C.B. 417, for the general rules housing credit. If the corporation
the AMT. Include a computation of
for computing this amount. Also, see disposed of property (or there was a
adjusted financial statement income.
Rev. Proc. 2022-36, 2022-40 I.R.B. reduction in the qualified basis of the
Label the statement “CAMT.”
274, available at IRS.gov/irb/ property) for which it took the
2022-40_IRB#REV-PROC-2022-36, low-income housing credit, and the Line 13. Total tax. Include any
for the domestic asset/liability corporation did not follow the deferred tax on the termination of a
percentages and domestic investment procedures that would have section 1294 election applicable to
yields needed to compute this prevented recapture of the credit, it shareholders in a qualified electing
amount. may owe a tax. See Form 8611, fund (QEF) in the amount entered on
Recapture of Low-Income Housing line 13.
Any additional income required by
Credit.
section 842(b) must be included in Subtract any deferred tax on the
taxable income (for example, Other. Additional taxes and corporation's share of undistributed
Schedule A, line 13). interest amounts can be included in earnings of a QEF (see Form 8621).
the total entered on line 12. Check the
Reduction of section 881 tax. How to report. Attach a statement
“Other” box if the corporation includes
Additional taxes resulting from the net showing the computation of each item
any additional taxes and interest such
investment income adjustment may included in, or subtracted from, the
as the items discussed below. Attach
offset a corporation's section 881 tax total for line 13. On the dotted line
a statement showing the computation
on U.S.-source income. The tax next to line 13, specify (a) the
of each item included in the total for
reduction is determined by multiplying applicable Code section, (b) the type
line 12 and identify the applicable
the section 881 tax by the ratio of the of tax, and (c) the amount of tax.
Code section and the type of tax or
amount of income adjustment to Line 14. Reserved for future use.
interest.
income subject to the section 881 tax,
• Recapture of Indian employment
computed without the exclusion for Line 15b. Reserved for future use.
credit. Generally, if an employer
interest on state and local bonds or Line 15c. Estimated tax payments.
terminates the employment of a
income exempted from taxation by Enter any estimated tax payments the
qualified employee less than 1 year
treaty. See section 842(c)(1). Attach a corporation made for the tax year.
after the date of initial employment,
statement showing how the reduction
any Indian employment credit allowed Line 15d. Reserved for future use.
under section 881 was figured. Enter
for a prior tax year because of wages
the net tax imposed by section 881 on Line 15e. Overpaid estimated tax.
paid or incurred to that employee
line 10. If the corporation overpaid estimated

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tax, it may be able to get a quick Line 19. Electronic deposit of tax This exclusion does not apply to
refund by filing Form 4466. The refund of $1 million or more. If the any:
overpayment must be at least 10% of corporation is due a refund of $1 1. Private activity bond which is
the corporation's expected income tax million or more and wants it not a qualified bond, as defined by
liability and at least $500. File Form electronically deposited into its section 141;
4466 after the end of the corporation's checking or savings account at any 2. Arbitrage bond, as defined by
tax year, and no later than the due U.S. bank or other financial institution section 148; or
date for filing the corporation’s tax instead of having a check sent to the
3. Bonds not meeting the
return. Form 4466 must be filed corporation, complete Form 8302 and
requirements of section 149
before the corporation files its tax attach it to the corporation's tax return.
return. See the instructions for Form (regarding the registration of
4466. tax-exempt bonds).
Schedule A—Taxable
Line 15h. Credit by reciprocal for Lines 3a and 3b, column (b). Am-
tax paid by attorney-in-fact under Income ortization of premium. Enter on
section 835(d). Enter the amount of Gross income. Under section 832, line 3a, column (b), the total
tax paid by an attorney-in-fact as a gross amounts of underwriting and amortization of bond premium,
result of income received by the investment income should be including amortization on tax-exempt
attorney-in-fact from the reciprocal computed on the basis of the bonds. Enter on line 3b, column (b),
during the tax year. For more Statement of Income of the NAIC the amortization of bond premium on
information, see section 835 and the annual statement to the extent not tax-exempt bonds only.
related regulations, and the inconsistent with the Internal Revenue
instructions for line 5, earlier. Code and its regulations. Note. Insurance companies electing
to amortize discount for tax purposes
Line 15i. Other credits and pay- Income from qualifying shipping must reduce the amortization of
ments. Enter the amount of any other activities. Gross income does not premium by any amortization of
credits the corporation may take include income from qualifying discount.
and/or payments made. Enter an shipping activities if the corporation
explanation of the entry to the left of makes an election under section 1354 Line 4. Gross rents. Enter gross
the entry space. to be taxed on its notional shipping rents, computed as indicated under
Backup withholding. If the income (as defined in section 1353) at Gross income, earlier. Deduct
corporation had federal income tax the highest corporate tax rate expenses, such as repairs, interest,
withheld from any payments it specified in section 11. If the election taxes, and depreciation, on the proper
received because, for example, it is made, the corporation may lines for deductions.
failed to give the payer its correct EIN, generally not claim any loss, Line 6. Capital gain net income.
include the amount withheld in the deduction, or credit with respect to Every sale or exchange of a capital
total for line 15i. Enter the amount qualifying shipping activities. A asset must be reported in detail on
withheld and the words “Backup corporation making this election may Schedule D (Form 1120), Capital
Withholding” on the dotted line to the also elect to defer gain on the Gains and Losses, even if there is no
left of the entry space for line 15i. disposition of a qualifying vessel. gain or loss.
Line 15k. Total payments. Add the Use Form 8902, Alternative Tax on Generally, losses from sales or
amounts on lines 15f through 15i and Qualifying Shipping Activities, to exchanges of capital assets are only
enter the total on line 15k. figure the tax. Include the alternative allowed to the extent of gains.
tax on Form 1120-PC, page 1, line 12. However, corporations taxed under
Line 16. Estimated tax penalty. section 831 may claim losses from
Generally, the corporation does not Note. In computing the amounts for capital assets sold or exchanged to
have to file Form 2220 with its income lines 2, 3, and 4, take all interest, get funds to meet abnormal insurance
tax return because the IRS will figure dividends, or rents received during the losses and to pay dividends and
the amount of any penalty and notify year; add interest, dividends, or rents similar distributions to policyholders.
the corporation of any amount due. due and accrued at the end of the tax Do not include those types of losses
However, see the Instructions for year; and deduct interest, dividends, here; instead, report them on
Form 2220 for circumstances where or rents due and accrued at the end of Schedule G.
the corporation must file Form 2220 the preceding tax year. For rules
even if it owes no penalty. regarding the accrual of dividends, The net capital loss for these
If Form 2220 is attached, check the see Regulations section 1.301-1(b). corporations is the amount by which
losses for the year from sales or
box on line 16 and enter any penalty Line 3a, column (a). Interest (in- exchanges of capital assets exceed
on this line. See Estimated tax cluding tax-exempt interest). Enter the gains from these sales or
penalty, earlier. the gross amount of interest income, exchanges plus the smaller of:
Line 17. Amount owed. If the including all tax-exempt interest.
1. Taxable income (computed
corporation cannot pay the full amount Line 3b, column (a). Interest ex- without gains or losses from sales or
of tax owed, it can apply for an empt under section 103. Section exchanges of capital assets); or
installment agreement online. Go to 103(a) excludes interest on state or 2. Losses from the sale or
IRS.gov/OPA for the latest local bonds from gross income. exchange of capital assets sold or
information.

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exchanged to obtain funds to meet still in effect. Attach a statement amounts recognized are treated as
abnormal insurance losses and to showing the computation. derived from sources within the
provide for the payment of dividends United States.
Line 11. Mutual interinsurers or re-
and similar distributions to • Part or all of the proceeds received
ciprocal underwriters—decrease
policyholders. from certain corporate-owned life
in subscriber accounts. Enter the
insurance contracts issued after
Subject to the limitations in section decrease for the tax year in savings
August 17, 2006. Corporations that
1212(a), a net capital loss can be credited to subscriber accounts of a
own one or more employer-owned life
carried back 3 years and forward 5 mutual insurance company that is an
insurance contracts issued after
years as a short-term capital loss. interinsurer or a reciprocal
August 17, 2006, must file Form 8925,
underwriter.
Line 8. Certain mutual fire or flood Report of Employer-Owned Life
insurance company premiums. A Line 13. Other income. Enter any Insurance Contracts. See Form 8925.
mutual fire or flood insurance other taxable income not reported on • One-eighth of any adjustment
company whose principal business is lines 1 through 11. List the type and attributable to the application of the
the issuance of policies (1) for which amount of income on an attached discount factors published in Rev.
the premium deposits are the same statement. If the corporation has only Proc. 2019-06, 2019-02 I.R.B 284,
(regardless of the length of the term one item of other income, describe it available at IRS.gov/irb/
the policies are written for), and (2) in parentheses on line 13. Examples 2019-02_IRB#RP-2019-06, to unpaid
under which the unabsorbed portion of other income to report on line 13 losses for the tax year preceding the
of such premium deposits not include the following. first tax year beginning after
required for losses, expenses, or • Any income under P.L. 115-97, December 31, 2017. See P.L. 115-97,
establishment of reserves is returned section 13517(c)(3)(B)(ii) (transitional section 13523(e).
or credited to the policyholder on relief for change in reserve). • The corporation's share of the
cancellation or expiration of the policy, • The amount included in income following income from Form 8621,
must include in income an amount from Form 6478, Biofuel Producer Information Return by a Shareholder
equal to 2% of the premiums earned Credit. of a Passive Foreign Investment
on insurance contracts during the tax • The amount included in income Company or Qualified Electing Fund.
year with respect to such policies after from Form 8864, Biodiesel, 1. Ordinary earnings of a QEF.
deduction of premium deposits Renewable Diesel, or Sustainable
returned or credited during the same Aviation Fuels Credit. 2. Gain or loss from marking PFIC
tax year. • Refunds of taxes deducted in prior stock to market.
years to the extent they reduced 3. Gain or loss from sale or other
Line 9. Income on account of spe- disposition of section 1296 stock.
income subject to tax imposed. See
cial income and deduction ac-
section 111 and the related
counts. Corporations which write the 4. Excess distributions from a
regulations. Do not offset current year
kinds of insurance below must section 1291 fund allocated to the
taxes against tax refunds.
maintain the following special current year and pre-PFIC years, if
• Ordinary income from trade or
accounts. A corporation which writes: any.
business activities of a partnership
See Form 8621 and its instructions
1. Mortgage guaranty insurance from Schedule K-1 (Form 1065). Do
for details.
must maintain a mortgage guaranty not offset ordinary losses against
• The amount of payroll tax credit
account, ordinary income. Instead, include the
taken by an employer on its 2022
2. Lease guaranty insurance must losses on line 31. Show the
employment tax returns (Forms 941,
maintain a lease guaranty account, partnership's name, address, and EIN
943, and 944) for qualified paid sick
and on a separate statement attached to
leave and qualified paid family leave
3. Insurance on obligations the this return. If the amount entered is
under the FFCRA and the ARP (both
interest on which is excludable from from more than one partnership,
the nonrefundable and refundable
gross income under section 103 must identify the amount from each
portions). The corporation must
maintain an account with respect to partnership.
include the full amount of the credit for
insurance on state and local • The transferred loss amount
qualified sick and family leave wages
obligations. identified as “Section 91 Transferred
in gross income for the tax year that
Loss Amount.” This amount is
includes the last day of any calendar
Amounts required to be subtracted required to be recognized under
quarter in which the credit is allowed.
from these accounts under sections section 91 resulting from a transfer of
832(e)(5) and 832(e)(6) must be substantially all the assets of a foreign Note. A credit is available only if the
reported as income on line 9. See branch (within the meaning of section leave was taken after March 31, 2020,
section 832(e) for more information. 367(a)(3)(C), as in effect before its and before October 1, 2021, and only
Line 10. Income from protection repeal) to a specified 10%-owned after the qualified leave wages were
against loss account. Although foreign corporation (as defined in paid, which might, under certain
section 1024 of P.L. 99-514 repealed section 245A(b)) with respect to which circumstances, not occur until a
section 824 relating to the protection the corporation was a U.S. quarter after September 30, 2021,
against loss (PAL) account, PAL shareholder immediately after the including quarters in 2022.
account balances are includible in transfer as other income. Under
income as though section 824 were section 91(d), transferred loss

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Deductions and organizational costs it paid or • Orphan drug credit (Form 8820).
incurred. Any remaining costs must • Disabled access credit (Form
Limitations on Deductions generally be amortized over a 8826).
180-month period. See sections 195 • Employer credit for social security
Section 263A uniform capitaliza- and 248 and the related regulations. and Medicare taxes paid on certain
tion rules. The uniform capitalization employee tips (Form 8846).
rules of section 263A require Time for making an election.
• Credit for small employer pension
corporations to capitalize certain The corporation generally elects to
plan start-up costs (Form 8881).
costs. deduct startup or organizational costs
• Credit for employer-provided
by claiming the deduction on its
childcare facilities and services (Form
A small business taxpayer is not income tax return filed by the due date
8882).
required to capitalize costs under (including extensions) for the tax year
• Credit for small employer health
section 263A. A small business in which the active trade or business
insurance premiums (Form 8941).
taxpayer that wants to discontinue begins. For more details including
capitalizing costs under section 263A special rules for costs paid or incurred If the corporation has any of these
must change its method of before September 9, 2008, see the credits, figure the current year credit
accounting. See section 263A(i) and Instructions for Form 4562, before figuring the deduction for
Regulations section 1.263A-1(j). Also, Depreciation and Amortization. Also, expenses on which the credit is
see the Instructions for Form 3115. see Pub. 535, Business Expenses. based. If the corporation capitalized
any costs on which it figured the
For more information on the If the corporation timely filed its
credit, it may need to reduce the
uniform capitalization rules, see Pub. return for the year without making an
amount capitalized by the credit
538. Also, see Regulations sections election, it can still make an election
attributable to these costs.
1.263A-1 through 1.263A-3. by filing an amended return within 6
Transactions between related tax- months of the due date of the return See the instructions for the form
payers. Generally, an accrual basis (excluding extensions). Clearly used to figure the applicable credit for
taxpayer can only deduct business indicate the election on the amended more details.
expenses and interest owed to a return and enter “Filed pursuant to Limitations on deductions related
related party in the year the payment Regulations section 301.9100-2” at to property leased to tax-exempt
is included in the income of the the top of the amended return. File the entities. If a corporation leases
related party. See sections 163(e)(3) amended return at the same address property to a governmental or other
and 267 for limitations on deductions the corporation filed its original return. tax-exempt entity, the corporation
for unpaid interest and expenses. The election applies when figuring cannot claim deductions related to the
taxable income for the current tax year
Limitations on business interest property to the extent that they
and all subsequent years.
expense. Business interest expense exceed the corporation's income from
may be limited. See section 163(j) and The corporation can choose to the lease payments. This disallowed
Form 8990, Limitation on Business forgo the election by affirmatively tax-exempt use loss can be carried
Interest Expense Under Section electing to capitalize its start-up or over to the next tax year and treated
163(j). Also, see Limitation on organizational costs on its income tax as a deduction with respect to the
deduction in the instructions for return filed by the due date (including property for that tax year. See section
Line 20a and Schedule K, Question extensions) for the tax year in which 470(d) for exceptions.
18, later.< the active trade or business begins. Limitation on tax benefits for re-
muneration under the Patient Pro-
Section 291 limitations. Note. The election to either amortize
tection and Affordable Care Act.
Corporations may be required to or capitalize start-up costs is
The $1 million compensation limit is
adjust certain deductions. See section irrevocable and applies to all start-up
reduced to $500,000 for remuneration
291 to determine the amount of the costs that are related to the trade or
adjustment. business. for services provided by individuals for
or on behalf of certain health
Golden parachute payments. A Report the deductible amount of insurance providers. The $500,000
portion of the payments made by a such costs and any amortization on limitation applies to remuneration that
corporation to key personnel that Schedule A, line 31. For amortization is deductible in the tax year during
exceeds their usual compensation that begins during the current tax which the services were performed
may not be deductible. This occurs year, complete and attach Form 4562. and remuneration for services during
when the corporation has an Reducing certain expenses for the year that is deductible in a future
agreement (golden parachute) with which credits are allowable. If the tax year (called “deferred deduction
these key employees to pay them corporation claims certain credits, it remuneration”). The $500,000
these excess amounts if control of the may need to reduce allowable limitation is reduced by any amounts
corporation changes. See section deductions for expenses used to disallowed as excess parachute
280G and Regulations section figure the credit. This applies to payments. See section 162(m)(6) and
1.280G-1. Also, see the instructions credits such as the following. Regulations section 1.162-31 for
for line 15. • Employment credits. See definitions and other special rules.
Business start-up and organiza- Employment credits, later. Also, see Notice 2011-2, 2011-2
tional costs. A corporation can elect • Credit for increasing research I.R.B. 260.
to deduct a limited amount of start-up activities (Form 6765).

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Line 15. Compensation of officers. • Qualified performance-based If the corporation provided taxable
Enter deductible officers' compensation; and fringe benefits to its employees, such
compensation on line 15. See • Income payable under a written, as the personal use of a car, do not
Employment credits, later, for binding contract in effect on February deduct as wages the amount
employment credits that may reduce 17, 1993. allocated for depreciation and other
your deduction for officers' The $1 million limit is reduced by expenses that are claimed elsewhere
compensation. Do not include amounts disallowed as excess on the return (for example, on
compensation deductible elsewhere parachute payments under section Schedule A, line 22 or line 31).
on the return, such as elective 280G. If the corporation claims a
contributions to a section 401(k) cash See section 162(m) and ! credit for any wages paid or
or deferred arrangement, or amounts Regulations section 1.162-27. Also, CAUTION incurred, it may need to
contributed under a salary reduction see Notice 2007-49, 2007-25 I.R.B. reduce any corresponding deduction
SEP agreement or a SIMPLE IRA 1429. for salaries and wages. See
plan. Employment credits below.
Limitations on tax benefits for ex-
Include only the deductible part of
ecutive compensation under the
each officer's compensation on Employment credits. If the
Treasury Troubled Asset Relief
line 15. (See Disallowance of corporation claims a credit on any of
Program (TARP). The $1 million
deduction for employee the forms below, it may need to
compensation limit is reduced to
compensation in excess of $1 million, reduce its deduction for officers’
$500,000 for executive remuneration
later). Attach a statement for all compensation and salaries and
and deferred deduction executive
officers using the following columns. wages. See the applicable form for
remuneration paid to covered details.
1. Name of officer. executives by any entity that receives • Form 5884, Work Opportunity
2. Social security number. or has received financial assistance Credit.
3. Percentage of time devoted to under the TARP. The limit applies for • Form 8844, Empowerment Zone
business. each period in which obligations Employment Credit.
arising from financial assistance • Form 8845, Indian Employment
4. Amount of compensation. under the TARP remain outstanding. Credit.
If a consolidated return is filed, The $500,000 is reduced by any • Form 8932, Credit for Employer
each member of an affiliated group amounts disallowed as excess Differential Wage Payments.
must furnish this information. parachute payments. See section • Form 8994, Employer Credit for
162(m)(5) for definitions and other Paid Family and Medical Leave.
Disallowance of deduction for em- special rules. Also, see Notice
ployee compensation in excess of 2008-94, 2008-44 I.R.B. 1070, for Line 18. Rents. If the corporation
$1 million. Publicly held corporations additional guidance. rented or leased a vehicle, enter the
cannot deduct compensation to a total annual rent or lease expense
“covered employee” to the extent that In addition, a portion of any
paid or incurred during the year. Also,
the compensation exceeds $1 million. parachute payments made to a
complete Form 4562, Part V. If the
Generally, a covered employee is: covered executive by an applicable
corporation leased a vehicle for a term
• The principal executive officer of employer participating in a TARP is
of 30 days or more, the deduction for
the corporation (or an individual acting not deductible as compensation if the
the vehicle lease expense may have
in that capacity) as of the end of the payments are made because of a
to be reduced by an amount includible
tax year, or severance from employment during
in income called the inclusion amount.
• An employee whose total an applicable tax year. For this
The corporation may have an
compensation must be reported to purpose, a parachute payment is any
inclusion amount if:
shareholders under the Securities payment to a senior executive officer
Exchange Act of 1934 because the for departure from a company for any
employee is among the three highest reason, except for payments for
compensated officers for that tax year services performed or benefits
(other than the principal executive accrued. These limits do not apply to
officer). a payment already treated as a
parachute payment. See section
For this purpose, compensation 280G(e) and Notice 2008-94.
does not include the following.
• Income from certain employee Line 16. Salaries and wages. Enter
trusts, annuity plans, or pensions. the total salaries and wages paid for
• Any benefit paid to an employee the tax year. Do not include salaries
that is excluded from the employee's and wages deductible elsewhere on
income. the return, such as amounts included
The deduction limit does not apply in officers' compensation, elective
to: contributions to a section 401(k) cash
• Commissions based on individual or deferred arrangement, or amounts
performance; contributed under a salary reduction
SEP agreement or a SIMPLE IRA
plan.

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And the vehicle's Note. Section 9010 of the Patient • Interest on unpaid taxes attributable
FMV on the first day Protection and Affordable Care Act to nondisclosed reportable
of the lease
The lease term began: exceeded: imposes a fee on each covered entity transactions. See section 163(m).
engaged in the business of providing
Cars (excluding trucks and Limitation on deduction. Under
vans) health insurance for U.S. health risks.
section 163(j), business interest
After 12/31/21 but before The fee is treated as a tax described
expense is generally limited to the
1/1/23 . . . . . . . . . . $56,000 in section 275 relating to taxes for
sum of business interest income, 30%
After 12/31/20 but before which no deduction is allowed. For
of the adjusted taxable income, and
1/1/22 . . . . . . . . . . $51,000 more information, see the final
floor plan financing interest. The
After 12/31/17 but before regulations and Rev. Rul. 2013-27.
1/1/21 . . . . . . . . . . $50,000 amount of any business interest
After 12/31/12 but before Do not reduce the expense that is not allowed as a
1/1/18 . . . . . . . . . . $19,000 ! corporation's deduction for deduction for the tax year is carried
After 12/31/07 but before CAUTION social security and Medicare forward to the following year. If
1/1/13 . . . . . . . . . . $18,500
taxes by the nonrefundable and
Trucks and Vans section 163(j) applies, use Form 8990
refundable portions of the FFCRA and
After 12/31/21 but before to figure the amount of business
1/1/23 . . . . . . . . . . $56,000 ARP credits for qualified sick and interest expense the corporation can
After 12/31/20 but before family leave wages claimed on its deduct for the current tax year and the
1/1/22 . . . . . . . . . . $51,000 employment tax returns. Instead, amount that can be carried forward to
After 12/31/17 but before report this amount as income on the next year. See the Instructions for
1/1/21 . . . . . . . . . . $50,000 line 13. Form 8990. Also see Schedule I,
After 12/31/13 but before Question 18, later.
1/1/18 . . . . . . . . . . $19,500 Line 20a. Interest.
After 12/31/09 but before Special rules apply to the
1/1/14 . . . . . . . . . . $19,000 following.
Note. Do not offset interest income
After 12/31/08 but before • Forgone interest on certain
1/1/10 . . . . . . . . . . $18,500 against interest expense.
below-market-rate loans (see section
After 12/31/07 but before The corporation must allocate the 7872).
1/1/09 . . . . . . . . . . $19,000 interest expense if the proceeds of a Original issue discount (OID) on
•
loan were used for more than one certain high-yield discount obligations.
purpose (for example, to purchase a
See Pub. 463, Travel, Gift, and Car See section 163(e)(5) to determine
portfolio investment and to acquire an
Expenses, for instructions on figuring the disqualified amount of the
interest in a passive activity). See
the inclusion amount. deduction for OID that is deferred and
Temporary Regulations section the amount that is disallowed on a
Note. The inclusion amount for lease 1.163-8T for the interest allocation high-yield discount obligation. The
terms beginning in 2023 will be rules. rules under section 163(e)(5) do not
published in the Internal Revenue Do not deduct the following apply to certain high-yield discount
Bulletin in early 2023. interest. obligations issued before January 1,
Line 19. Taxes and licenses. Enter • Interest on indebtedness incurred 2011. See section 163(e)(5)(F), and
or continued to purchase or carry
taxes paid or accrued during the tax Notice 2010-11, 2010-4 I.R.B. 326.
obligations if the interest is wholly
year, but do not include the following. • Interest which is allocable to
exempt from income tax. See section
• Federal income taxes. unborrowed policy cash values of life
265(b) for special rules and
• Foreign or U.S. possession income insurance, endowment, or annuity
exceptions for financial institutions.
taxes if a tax credit is claimed. contracts issued after June 8, 1997.
Also, see section 265(b)(7) for a
• Taxes not imposed on the See section 264(f). Attach a
temporary de minimis exception for
corporation. statement showing the computation of
financial institutions for certain
• Taxes, including state or local sales the deduction.
tax-exempt bonds issued in 2009 and
taxes, that are paid or incurred in Line 20b. Less tax-exempt interest
2010.
connection with an acquisition or expense. Enter interest paid or
disposition of property (these taxes • Interest and carrying charges on
straddles. Generally, these amounts accrued during the tax year on
must be treated as a part of the cost of indebtedness incurred or continued to
must be capitalized. See section
the acquired property or, in the case purchase or carry obligations if the
263(g).
of a disposition, as a reduction in the interest is wholly exempt from income
amount realized on the disposition). • Interest on debt allocable to the
production of designated property by tax. See section 265.
• Taxes assessed against local
a corporation for its own use or for Line 21. Charitable contributions.
benefits that increase the value of the
sale. The corporation must capitalize Include charitable contributions, as
property assessed (such as for
this interest. Also, capitalize any provided in section 170. See section
paving, etc.).
interest on debt allocable to an asset 170 and its regulations for limitations,
• Taxes deducted elsewhere on the
used to produce the property. See carryover, exclusions, requirements,
return.
section 263A(f) and Regulations substantiation, and other rules.
See section 164(d) for information sections 1.263A-8 through 1.263A-15 For more information on charitable
on the apportionment of taxes on real for definitions and more information. contributions, including substantiation
property between a seller and a
and recordkeeping requirements, see
purchaser.

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section 170 and the related cancellation or expiration of policies earlier under Limitations on
regulations and Pub. 526. For other issued by a mutual fire or flood Deductions).
special rules that apply to insurance company: • Legal and professional fees.
corporations, see Pub. 542. 1. Where the premium deposits for • Supplies used and consumed in the
Line 22. Depreciation. Include on the policy are the same (regardless of business.
line 22 depreciation and the cost of the length of the policy); and • Travel, meals, and entertainment
expenses. Special rules apply
certain property that the corporation 2. The unabsorbed portion of the
(discussed later).
elected to expense under section 179. premium deposits not required for
• Utilities.
See Form 4562 and the Instructions losses, expenses, or establishment of
• Ordinary losses from trade or
for Form 4562. reserves is returned or credited to the
business activities of a partnership
Line 23. Depletion. See sections policyholder on cancellation or
from Schedule K-1 (Form 1065). Do
613 and 613A for percentage expiration of the policy.
not offset ordinary income against
depletion rates applicable to natural In the case of a qualified group ordinary losses. Instead, include the
deposits. Also, see section 291 for the self-insurers fund, the fund's income on line 13. Show the
limitation on the depletion deduction deduction for policyholder dividends partnership's name, address, and EIN
for iron ore and coal (including lignite). is allowed no earlier than the date the on a separate statement attached to
Attach Form T (Timber), Forest state regulatory authority determines this return. If the amount entered is
Activities Schedule, if a deduction for the amount of the policyholder from more than one partnership,
depletion of timber is taken. dividend that may be paid. See identify the amount from each
There are special rules for section 6076 of the Technical and partnership.
intangible drilling and development Miscellaneous Revenue Act of 1988. • Any extraterritorial income
exclusion from Form 8873,
costs incurred outside the United Line 30. Mutual interinsurers or re-
Extraterritorial Income Exclusion.
States. See section 263(i). ciprocal underwriters—increase in
See Pub. 535 for more information subscriber accounts. A mutual • Dividends paid in cash on stock
held by an employee stock ownership
on depletion. insurance company that is an
plan (ESOP). However, a deduction
interinsurer or reciprocal underwriter
may only be taken for the dividends
Line 24. Pension, profit-sharing, may deduct the increase in savings
above if, according to the plan, the
etc., plans. Enter the deduction for credited to subscriber accounts for
dividends are:
contributions to qualified pension, the tax year.
profit-sharing, or other funded 1. Paid in cash directly to the plan
deferred compensation plans. Savings credited to subscriber
participants or beneficiaries;
accounts means the surplus credited
Note. Employers who maintain a plan to the individual accounts of 2. Paid to the plan, which
are generally required to file Form subscribers before the 16th day of the distributes them in cash to the plan
5500, Form 5500-SF, or Form 3rd month following the close of the participants or their beneficiaries no
5500-EZ. Go to www.EFAST.dol.gov tax year. This is true only if the later than 90 days after the end of the
and IRS.gov/Form5500EZ for more corporation would be required to pay plan year in which the dividends are
information. this amount promptly to a subscriber if paid;
the subscriber ended the contract 3. At the election of the
Line 25. Employee benefit pro- when the corporation's tax year ends. participants or their beneficiaries (a)
grams. Enter contributions to payable as provided under (1) or (2)
employee benefit programs not Line 31. Other deductions. Attach a
claimed elsewhere on the return (for statement listing by type and amount above, or (b) paid to the plan and
example, insurance, health and all allowable deductions under reinvested in qualifying employer
welfare programs, etc.) that are not an sections 832(c)(1) and (10) (net of the securities; or
incidental part of a pension, annual statement change in 4. Used to make payments on a
profit-sharing, etc., plan included on undiscounted unpaid loss adjustment loan described in section 404(a)(9).
line 24. expenses) that are not deductible on See section 404(k) for more details
lines 15 through 30. and the limitation on certain
Line 29. Dividends to policyhold-
ers. Enter the total dividends and Examples of other deductions may dividends.
similar distributions paid or declared include the following. See Pub. 535 Do not deduct expenses such as
to policyholders, as policyholders, for details on other deductions that the following.
except in the case of a mutual fire may apply to corporations. • Amounts paid to, or at the direction
insurance company exclusively • Any deduction under P.L. 115-97, of, a government or specified
issuing perpetual policies. Whether section 13517(c)(3)(B)(i) (transitional nongovernmental entity for the
dividends have been paid or declared relief for change in reserve). violation, or investigation or inquiry, of
should be determined according to • Any applicable deduction under a law. However, see the exceptions
the method of accounting employed section 179D for costs of energy discussed later.
by the insurance company. efficient commercial building property • Lobbying expenses. However, see
placed in service during the tax year. the exceptions discussed later.
Dividends and similar distribu- Complete and attach new Form 7205. • Amounts paid or incurred for any
tions. Include amounts returned or • Certain business startup and settlement, payout, or attorney fees
credited to policyholders on organizational costs (discussed related to sexual harassment or

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sexual abuse, if such payments are However, no deduction is allowed if a agreements in which no government
subject to a nondisclosure agreement. principal purpose of the organization or governmental entity is a party, and
See section 162(q). is to entertain or provide • Amounts paid or incurred for taxes
entertainment facilities for members due. No deduction is allowed unless
Travel, meals, and entertainment.
or their guests. This includes country the amounts are specifically identified
Subject to limitations and restrictions
clubs, golf and athletic clubs, airline in the order or agreement and the
discussed below, a corporation can
and hotel clubs, and clubs operated to corporation establishes that the
deduct ordinary and necessary travel,
provide meals under conditions amounts were paid for that purpose.
meals, and non-entertainment
favorable to business discussion. Also, any amount paid or incurred as
expenses paid or incurred in its trade
reimbursement to the government for
or business. Generally, entertainment Qualified transportation fringes
the costs of any investigation or
expenses, membership dues, and (QTFs). Generally, no deduction is
litigation are not eligible for the
facilities used in connection with these allowed under section 274(a)(4) for
exceptions and are nondeductible.
activities cannot be deducted. In QTFs provided by employers to their
See section 162(f).
addition, no deduction is generally employees. QTFs are defined in
allowed for qualified transportation section 132(f)(1) and include: Lobbying expenses. Generally,
fringe benefits. Also, special rules • Transportation in a commuter lobbying expenses are not deductible.
apply to deductions for gifts, luxury highway vehicle between the These expenses include:
water travel, and convention employee’s residence and place of • Amounts paid or incurred in
expenses. See section 274, Pub. 463, employment, connection with influencing federal,
and Pub. 535. • Any transit pass, and state, or local legislation (but not
Travel. The corporation cannot • Qualified parking. amounts paid or incurred before
deduct travel expenses of any See section 274; Pub. 15-B, December 22, 2017, in connection
individual accompanying a corporate Employer’s Tax Guide to Fringe with local legislation); or
officer or employee, including a Benefits; and Pub. 535 for details. • Amounts paid or incurred in
connection with any communication
spouse or dependent of the officer or Entertainment facilities. with certain federal executive branch
employee, unless: Generally, the corporation cannot officials in an attempt to influence the
• That individual is an employee of deduct an expense paid or incurred official actions or positions of the
the corporation, and for a facility (such as a yacht or officials. See Regulations section
• That individual’s travel is for a bona hunting lodge) used for an activity 1.162 29 for the definition of ‐
fide business purpose and would usually considered entertainment, “influencing legislation.”
otherwise be deductible by that amusement, or recreation. Dues and other similar amounts
individual.
Amounts treated as paid to certain tax exempt ‐
Meals. Generally, the corporation compensation. Generally, the organizations may not be deductible.
can deduct only 50% of the amount corporation may be able to deduct If certain in house lobbying ‐
otherwise allowable for otherwise nondeductible expenditures do not exceed $2,000,
non-entertainment-related meal entertainment, amusement, or they are deductible.
expenses paid or incurred in its trade recreation expenses if the amounts Line 32. Total deductions. Section
or business. However, the corporation are treated as compensation to the 848 (capitalization of certain policy
can deduct 100% of business meal recipient and reported on Form W 2 ‐ acquisition expenses) requires
expenses if the meals are food and for an employee or on Form 1099‐ insurance companies to capitalize
beverages provided by a restaurant. NEC for an independent contractor. specified policy acquisition expenses
This applies only to amounts paid or
incurred after December 31, 2020, However, if the recipient is an and deduct them ratably over time.
and before January 1, 2023. officer, director, beneficial owner Attach a statement showing all
(directly or indirectly), or other computations. See section 848 and its
Meals not separately stated from “specified individual” (as defined in regulations.
entertainment are generally not section 274(e)(2)(B) and Regulations
Line 34b. Deduction on account of
deductible. In addition (subject to section 1.274 9(b)), special rules ‐ the special income and deduction
exceptions under section 274(k)(2)): apply.
• Meals must not be lavish or accounts. Enter the total of the
extravagant, and Fines and penalties. Generally, no amounts required to be added under
• An employee of the corporation deduction is allowed for fines or sections 832(e)(4) and (6). However,
must be present at the meal. similar penalties paid or incurred to, or no deduction is permitted unless tax
at the direction of, a government or and loss bonds are purchased in an
Membership dues. The governmental entity for violating any amount equal to the tax benefit of the
corporation can deduct amounts paid law, or for the investigation or inquiry deduction. See section 832(e).
or incurred for membership dues in into the potential violation of a law,
civic or public service organizations, except: Note. The deduction on account of
professional organizations (such as • Amounts that constitute restitution, the special income and deduction
bar and medical associations), • Amounts paid to come into accounts is limited to taxable income
business leagues, trade associations, compliance with the law, for the tax year (computed without
chambers of commerce, boards of • Amounts paid or incurred as the regard to this deduction or to any
trade, and real estate boards. result of certain court orders or

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carryback of a net operating loss investment trusts (FASITs). See Line 1b, column (a). Interest ex-
(NOL)). section 860E(a). empt under section 103. Enter the
Line 36b. Net operating loss de- Net operating loss. Only certain amount of interest on state and local
duction. Section 172 provides for an losses can be carried back. The bonds that is exempt from taxation
NOL deduction, limitation, carryovers, carryback period for these losses is 2 under section 103. See the
and carrybacks. Attach a statement years. For NOLs that can be carried instructions for Schedule A, line 3b,
showing the computation of the NOL back, the corporation can elect to column (a), for more information.
deduction. waive the carryback period and Lines 1a and 1b, column (b). Am-
The following special rules apply. instead carry the NOL forward to ortization of premium. Enter on
• Section 382 provides a limitation on future tax years. line 1a, column (b), the total
NOL carryforwards and certain built-in See the Instructions for Form 1139. amortization of bond premium,
losses following ownership change. See the instructions for Schedule I, including amortization on tax-exempt
• If a corporation acquires control of Item 10 for information on making the bonds.
another corporation (or acquires its election to waive the entire carryback Enter on line 1b, column (b), the
assets in a reorganization), the period. amortization of bond premium on
amount of pre-acquisition losses that The NOL deduction for tax year tax-exempt bonds.
may offset recognized built-in gain 2022 cannot exceed the aggregate
may be limited (see section 384). amount of NOLs arising in tax years Note. Insurance companies electing
• If a corporation elects the beginning before January 1, 2018, to amortize discount for tax purposes
alternative tax on qualifying shipping carried to such year plus the lesser of: must reduce the amortization of
activities under section 1354, no premium by any amortization of
1. The aggregate amount of NOLs
deduction is allowed for an NOL discount.
arising in tax years beginning after
attributable to the qualifying shipping
December 31, 2017, carried to such Line 3. Rents. Enter the gross rents
activities to the extent that the loss is
tax year; or received or accrued during the tax
carried forward from a tax year
preceding the first tax year for which 2. 80% of the excess, if any, of year. Deduct rental expenses such as
the alternative tax election was made. taxable income determined without repairs, interest, taxes, and
See section 1358(b)(2). any NOL deduction, section 199A depreciation on the proper lines in the
• Section 831(b)(3) provides for a deduction, or section 250 deduction, Deductions section.
limitation on use of NOLs. over any NOL carryover to the tax Line 5. Gross income from a trade
year from tax years beginning before
For more details on the NOL or business, other than an insur-
January 1, 2018.
deduction, see section 172 and the ance business, and from Form
Instructions for Form 1139, An exception applies for NOLs of 4797. Enter the gross income from a
Corporation Application for Tentative insurance companies other than life trade or business, other than an
Refund. insurance companies. The 80% insurance business, carried on by the
Line 37. Taxable income. If line 37 taxable income limit does not apply to insurance company or by a
(figured without regard to the items these entities. See sections 172(b) partnership of which the insurance
listed under Minimum taxable income and (f). company is a partner. Include section
1245 and section 1250 gains (as
below) is zero or less, the corporation See the Instructions for Form 1139 modified by section 291) and other
may have an NOL that can be carried for other special rules and elections. gains from Form 4797, on investment
back or forward as a deduction to assets only.
other tax years.
Schedule B, Part Line 6. Income from leases descri-
Minimum taxable income. The I—Taxable Investment bed in sections 834(b)(1)(B) and
corporation's taxable income cannot 834(b)(1)(C). Enter gross income
be less than the largest of the Income of Electing Small
from entering into, changing, or
following amounts. Companies ending any lease, mortgage, or other
• The inversion gain of the instrument or agreement from which
corporation for the tax year, if the Note. (1) Once an election under
corporation is an expatriated entity or section 831(b) is made to be taxed the company earns interest, rents, or
a partner in an expatriated entity. See only on investment income, it can only royalties.
section 7874(a). be revoked with the consent of the Line 8. Gross investment income.
• The sum of the corporation's Secretary; and (2) a corporation If gross investment income includes
excess inclusions from its residual making this election must include on an amount subtracted from the PAL
interest in a real estate mortgage Schedule B, line 8, any amount account, enter on the dotted line next
investment conduit (REMIC) from subtracted from a PAL account. to line 8, “PAL” and the amount.
Schedules Q (Form 1066), line 2c, Income Deductions
and the corporation's taxable income
determined solely with respect to its Line 1a, column (a). Interest (in- Line 9. Real estate taxes. Enter
ownership and high-yield interests in cluding tax-exempt interest). Enter taxes paid or accrued on real estate
financial asset securitization the gross amount of interest income, owned by the corporation and
including all tax-exempt interest deductible under section 164.
income.

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Line 10. Other real estate expen- and interest in transactions between 1. All dividends (other than 100%
ses. Enter all ordinary and necessary related taxpayers. dividends) received on stock acquired
real estate expenses, such as fire after August 7, 1986; and
insurance, heat, light, and labor. Also, Schedule B, Part 2. 100% dividends received on
enter the cost of incidental repairs, stock acquired after August 7, 1986,
such as labor and supplies, that do II—Invested Assets Book to the extent that such dividends are
not add to the property's value or Values attributable to prorated amounts (see
appreciably prolong its life. Do not Use Schedule B, Part II, to compute definition earlier).
include any amount paid for new the limitation on investment expenses
In the case of an insurance
buildings or for permanent under section 834(c)(2) when any
company that files a consolidated
improvements or betterments made to general expenses are in part assigned
return, the determination with respect
increase the value of any property. Do to, or included in, the investment
to any dividend paid by a member to
not include any amount spent on expenses deducted on Schedule B,
another member of the affiliated group
foreclosed property before the Part I, line 17.
is made as if no consolidated return
property is held for rent.
was filed. See section 832(g).
Line 11. Depreciation. Enter Schedule C—Dividends, Line 1. Enter dividends (except those
depreciation on assets only to the
Inclusions, received on certain debt-financed
extent that the assets are used to
produce gross investment income Dividends-Received stock acquired after July 18, 1984
(see section 246A)) that are:
reported on Schedule B, lines 1 Deduction, and Other
• Received from
through 7. For more information, see Special Deductions less-than-20%-owned domestic
the instructions for Schedule A,
line 22. Definitions corporations subject to income tax,
and
Prorated amounts. Prorated
Note. See section 834(d)(1) • Qualified for the 50% deduction
amounts mean tax-exempt interest
regarding the limitation of expenses under section 243(a)(1).
and dividends for which a deduction is
on real estate owned and occupied in See section 246 and section 854
allowable under section 243, 244 (as
part or in whole by a mutual insurance for limitations and exclusions.
affected by P.L. 113-295, Div. A,
company. Report so-called dividends or
section 221(a)(41)(A), December 19,
Line 12. Depletion. Enter any 2014, 128 Stat. 4043), or 245 (other earnings received from mutual
allowable depletion on royalty income than 100% dividends). savings banks, etc., as interest. Do
reported on Schedule B, line 4. See not treat them as dividends.
100% dividend. 100% dividend
the instructions for Schedule A, Line 2. Enter on line 2:
means any dividend if the percentage
line 23 for more information. • Dividends (except those received
used for purposes of determining the
Line 13. Trade or business deduc- deduction allowable under section on certain debt-financed stock
tions. Enter the total deductions 243, 244 (as affected by P.L. 113-295, acquired after July 18, 1984) that are
related to any trade or business Div. A, section 221(a)(41)(A), received from 20%-or-more-owned
income included in gross investment December 19, 2014, 128 Stat. 4043), domestic corporations subject to
income under section 834(b)(2). Do or 245(b) is 100%. See section 243, income tax and that are subject to the
not include deductions for any section 244 as affected by P.L. 65% deduction under section 243(c),
insurance business. Do not include 113-295, and section 245. and
losses from sales or exchanges of • Taxable distributions from an
capital assets or property used in the Lines 1 Through 25 interest charge domestic international
business, or from the compulsory or sales corporation (IC-DISC) or former
domestic international sales
involuntary conversion of property For purposes of the 20% ownership
corporation (DISC) that are
used in the trade or business. test on lines 1 through 7, the
considered eligible for the 65%
Line 14. Interest. See the percentage of stock owned by the
deduction.
instructions for Schedule A, lines 20a corporation is based on voting power
and 20b. and value of the stock. Preferred Line 3. Enter the following.
stock described in section 1504(a)(4) • Dividends received on certain
Line 17. Investment expenses. is not taken into account. debt-financed stock acquired after
Enter expenses that are properly July 18, 1984, from domestic and
chargeable as investment expenses. Consolidated returns. Corporations
foreign corporations subject to income
If general expenses are allocated to filing consolidated returns should see
tax that would otherwise be subject to
investment expenses, the total Regulations sections 1.1502-13,
the dividends-received deduction
deduction cannot be more than the 1.1502-26, and 1.1502-27 before
under section 243(a)(1), 243(c), or
amount on Schedule B, Part II, line 39. completing Schedule C. 245(a). Generally, debt-financed
Attach a statement showing the kind Lines 1 through 9, column (a). stock is stock that the corporation
and amount of general expenses. Enter in column (a) of the appropriate acquired by incurring a debt (for
Minor items may be grouped together. line those dividends that are subject example, it borrowed money to buy
See section 267 for the limitation to the provisions of section 832(b)(5) the stock).
on deductions for unpaid expenses (B).This will include:

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• Dividends received from a conduct of a trade or business within Regulations section 1.245A-5(b),
regulated investment company (RIC) the United States (excluding foreign dividends that fail to meet the holding
on certain debt-financed stock. The trade income), and period requirement under section
amount of dividends eligible for the • Qualify for the 65% deduction 246(c)(5), etc.).
dividends-received deduction is provided in section 245(c)(1)(B). Also, include on line 11 the
limited by section 854(b). The corporation's share of distributions
Line 8. Enter dividends received
corporation should receive a notice from a section 1291 fund from Form
from wholly owned foreign
from the RIC specifying the amount of 8621, to the extent that the amounts
subsidiaries that are eligible for the
dividends that qualify for the are taxed as dividends under section
100% deduction under section 245(b).
deduction. 301. See Form 8621 and its
In general, the deduction under
instructions.
Line 4. Enter dividends received on section 245(b) applies to dividends
preferred stock of a paid out of the earnings and profits of Attach a statement identifying the
less-than-20%-owned public utility a foreign corporation for a tax year amount of each dividend reported on
that is subject to income tax and is during which: line 11 and the provision pursuant to
allowed the deduction provided in • All of its outstanding stock is which a deduction is not allowed with
section 247 (as affected by P.L. directly or indirectly owned by the respect to such dividend.
113-295, Div. A, section 221(a)(41) domestic corporation receiving the Line 12a, column (b). Enter the
(A), December 19, 2014, 128 Stat. dividends, and foreign-source portion of any subpart
4043) for dividends paid. • All of its gross income from all F inclusions attributable to the sale or
Line 5. Enter dividends received on sources is effectively connected with exchange by a CFC of stock in
preferred stock of a the conduct of a trade or business another foreign corporation described
20%-or-more-owned public utility that within the United States. in section 964(e)(4). This should
is subject to income tax and is allowed Also, include on line 8 dividends equal the sum of the amounts
the deduction provided in section 247 from FSCs that are attributable to reported by the U.S. shareholder on
(as affected by P.L. 113-295, Div. A, foreign trade income and that are Form(s) 5471, Schedule I, line 1a. (Do
section 221(a)(41)(A), December 19, eligible for the 100% deduction not include on line 12a any portion of
2014, 128 Stat. 4043) for dividends provided in section 245(c)(1)(A). such subpart F inclusion that is not
paid. eligible for the section 245A deduction
Line 9. Enter only those dividends
pursuant to Regulations section
Line 6. Enter the U.S.-source portion that qualify under section 243(b) for
1.245A-5(g)(2). Include such amounts
of dividends that: the 100% dividends-received
on line 12c.)
• Are received from deduction described in section 243(a)
less-than-20%-owned foreign (3). Line 12b, column (b). Enter the total
corporations, and The 100% deduction does not subpart F inclusions attributable to
• Qualify for the 50% deduction apply to affiliated group members that tiered hybrid dividends. This should
under section 245(a). To qualify for are joining in the filing of a equal the sum of the amounts
the 50% deduction, the corporation consolidated return. reported by the U.S. shareholder on
must own at least 10% of the stock of Form(s) 5471, Schedule I, line 1b.
the foreign corporation by vote and Line 10, column (b). Enter the
value. foreign-source portion of dividends Line 12c, column (b). Enter all other
that: amounts included in income under
Also, include dividends received section 951, other than amounts on
from a less-than-20%-owned foreign • Are received from specified
10%-owned foreign corporations (as line 15. This should equal the sum of
sales corporation (FSC) that: the amounts reported by the U.S.
defined in section 245A(b)), including,
• Are attributable to income treated shareholder on Form(s) 5471,
for example, gain from the sale of
as effectively connected with the Schedule I, lines 1c–1h, 2, and 4.
stock of a foreign corporation that is
conduct of a trade or business within
treated as a dividend under sections
the United States (excluding foreign Line 13, column (b). Enter amounts
1248(a) and (j); and
trade income), and included in income under the section
• Qualify for the 50% deduction • Qualify for the 100% deduction 951. See Form 8992, Part II, line 5;
under section 245A(a) (excluding any
under section 245(c)(1)(B). and the Instructions for Form 8992. If
hybrid dividends; see the instructions you also have a Form 5471 reporting
Line 7. Enter the U.S.-source portion for line 11 below). requirement, attach Form 5471.
of dividends that:
Line 11, column (b). Enter the
• Are received from Line 15, column (b). Reserved for
foreign dividends not reportable on
20%-or-more-owned foreign future use.
line 3, 6, 7, 8, or 10 of column (b).
corporations, and Line 16, column (b). Include the
• Qualify for the 65% deduction Include on line 11 the following.
under sections 245(a) and 242 by foreign-source portion of any dividend
reference. that does not qualify for the section 1. Dividends (other than capital
245A deduction (for example, hybrid gain distributions reported on
Also, include dividends received Schedule D (Form 1120) and
dividends within the meaning of
from a 20%-or-more-owned FSC that: exempt-interest dividends) that are
section 245A(e), ineligible amounts of
• Are attributable to income treated received from RICs and that are not
dividends within the meaning of
as effectively connected with the subject to the 50% deduction.

Instructions for Form 1120-PC (2022) -19-

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2. Dividends from tax-exempt 
organizations.
                                         Worksheet for Schedule C, Line 26                    Keep for Your Records
3. Dividends (other than capital 
gain distributions) received from a real 1. Refigure the amount from Schedule A, line 35, or Schedule B, 
estate investment trust (REIT) that, for line 19, whichever applies, without any adjustment under 
the tax year of the trust in which the   section 1059, and without any capital loss carryback to the tax 
dividends are paid, qualifies under      year under section 1212(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . .               
sections 856 through 860.                2. Enter the sum of the amounts from line 25, column (b) (without 
4. Dividends not eligible for a          regard to wholly owned foreign subsidiary dividends), and 
dividends-received deduction, which      line 9, column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      
include the following.                   3. Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        
a. Dividends received on any             4. Multiply line 3 by 65% (0.65) . . . . . . . . . . . . . . . . . . . . . . . . . . . .          
share of stock held for less than 46     5. Add lines 19, 22, 24, and 25, column (b) (without regard to FSC 
days during the 91-day period            dividends), and the portion of the deduction on line 20, column 
beginning 45 days before the             (b), that is attributable to dividends received from 
ex-dividend date. When counting the      20%-or-more-owned corporations . . . . . . . . . . . . . . . . . . . . . . .                      
number of days the corporation held      6. Enter the smaller of line 4 or line 5. If line 5 is greater than line 4, 
the stock, you cannot count certain      stop here; enter the amount from line 6 on line 26, column (b), 
days during which the corporation's      and do not complete the rest of this worksheet . . . . . . . . . . . . .                          
risk of loss was diminished. See         7. Enter the total amount of dividends received from 
section 246(c)(4) and Regulations        20%-or-more-owned corporations that are included on lines 2, 
section 1.246-5 for more details.        3, 5, 7, and 8, column (b) (without regard to FSC 
b. Dividends received on any             dividends) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
share of preferred stock which are       8. Subtract line 7 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        
attributable to periods totaling more    9. Multiply line 8 by 50% (0.50) . . . . . . . . . . . . . . . . . . . . . . . . . . . .          
than 366 days, if such stock was held    10. Subtract line 5 from line 26, column (b) (without regard to FSC 
for less than 91 days during the         dividends) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
181-day period that began 90 days        11. Enter the smaller of line 9 or line 10 . . . . . . . . . . . . . . . . . . . . . .            
before the ex-dividend date. When 
counting the number of days the          12. Dividends-received deduction after limitation (section 
corporation held the stock, you cannot   246(b)). Add lines 6 and 11. Enter the result here and on 
count certain days during which the      line 26, column (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       
corporation's risk of loss was 
diminished. See section 246(c)(4) and 
Regulations section 1.246-5 for more     Attach a statement showing how the     premiums means the unearned 
details. Preferred dividends             amount on line 20 was figured.         premiums shown in the annual 
                                                                                statement filed for the year ending 
attributable to periods totaling less    Line 26, column (b). Generally, 
                                                                                with or within the tax year.
than 367 days are subject to the         line 26, column (b), cannot exceed the 
46-day holding period rule above.        amount from the Worksheet for          Applicable interest rate.                                 Applicable 
c. Dividends on any share of stock       Schedule C, Line 26, above.            interest rate means the annual rate 
to the extent the corporation is under   However, in a year in which an NOL     determined under section 846(c)(2) 
an obligation (including a short sale)   occurs, this limitation does not apply for the calendar year the premiums 
to make related payments with            even if the loss is created by the     are received.
respect to positions in substantially    dividends-received deduction. See      Applicable statutory premium rec-
similar or related property.             sections 172(d) and 246(b).
                                                                                ognition pattern.   Applicable 
5. Any other taxable dividend            Line 28, column (b). Enter the         statutory premium recognition pattern 
income not properly reported             section 250 deduction claimed for      means the statutory premium 
elsewhere on Schedule C.                 foreign-derived intangible income      recognition pattern in effect for the 
                                         (FDII) and global intangible low-taxed calendar year the premiums are 
Line 20. Dividends received on           income (GILTI). This should equal the  received, and is based on the 
certain debt-financed stock acquired     sum of Form 8993, Part III, lines 28   statutory premium recognition pattern 
after July 18, 1984, are not entitled to and 29.                                which applies to premiums received 
the full 50% or 65%                                                             by the corporation in that calendar 
dividends-received deduction. The        Line 29.  Reserved for future use.
                                                                                year. For purposes of the preceding 
50% or 65% deduction is reduced by                                              sentence, premiums received during 
a percentage that is related to the                                             any calendar year will be treated as 
                                         Schedule E—Premiums 
amount of debt incurred to acquire the                                          received in the middle of such year.
stock. See section 246A. Also, see       Earned
                                                                                Medical loss ratio (MLR).                                 Section 
section 245(a) before making this        Definitions
computation for an additional                                                   833(c)(5) limits the 100% deduction of 
limitation that applies to dividends     Undiscounted unearned premi-           unearned premiums by Blue Cross 
received from foreign corporations.      ums. Undiscounted unearned             and Blue Shield organizations 

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described in section 833(c)(2), and of premium acquisition expenses applicable to noncancelable accident
other organizations described in should increase its unearned and health insurance contracts and
section 833(c)(3), to those with an premiums by the amount of such using a mortality or morbidity table
MLR of 85% or more. Organizations acquisition expenses prior to making reflecting the taxpayer’s experience,
with an MLR less than 85% are the computation on lines 2d and 4d. except that the limitation of section
allowed to deduct only 80% of See section 832(b)(7)(E). 846(a)(3) (Limitation on amount of
unearned premiums. See section discounted losses) will apply; and (b)
Line 6. Transitional adjustments
833(c)(5) and Regulations section in all other cases, by using an
apply to companies which become
1.833-1. assumption (in lieu of a loss payment
taxable under section 831(a). See
pattern) that unpaid losses are paid in
Line 1. Enter gross premiums written section 832(b)(7)(D).
the middle of the year following the
on insurance contracts during the tax
accident year.
year, less return premiums and
premiums paid for reinsurance. See Schedule F—Losses A separate series of discount
Regulations section 1.832-4. Incurred factors are computed for, and applied
to, undiscounted unpaid losses
Lines 2a and 4a. Include on lines 2a Line 1. Losses paid. Enter the total
attributable to each accident year of
and 4a the following. losses paid on insurance contracts
each line of business shown on the
1. All life insurance reserves, as during the tax year less salvage and
annual statement (as defined by
defined in section 816(b) (but reinsurance recovered during the tax
section 846(e)(3)) filed for the
determined under section 807). year. Attach a statement that
calendar year ending with or within
reconciles the amount entered on
the tax year. See section 1.832-4(b)
2. Generally, all section 833 line 1 to the amount reported on the
relating to the determination of unpaid
organizations with an MLR of 85% or corporation's annual statement.
more (discussed earlier) are permitted losses.
to enter 100% of unearned premiums Lines 2a and 4a. Unpaid losses on Section 832(b)(5)(A) provides rules
on lines 2a and 4a. Section 833 life insurance contracts. Unpaid for figuring losses incurred. Section
organizations with an MLR of less losses must be adjusted for 832(b)(5)(B) provides rules for
than 85% must change to an 80% recoveries of reinsurance. The reducing the deduction figured in
Unearned Premium Reserve. For amounts of expected recoveries section 832(b)(5)(A).
more information, see Change in should be estimated based on the
Rev. Proc. 2023-10, 2023-3, I.R.B.
accounting method, earlier. facts in each case and the
411, available at IRS.gov/irb/
corporation's experience with similar
2023-3_IRB#REV-PROC-2023-10,
Lines 2b and 4b. Include on lines 2b cases. See Regulations section
prescribes discount factors for the
and 4b 90% of unearned premiums 1.832-4(b).
for insurance against default in the 2022 accident year for use by
Lines 2b and 4b. Discounted un-
payment of principal or interest on insurance companies in computing
paid losses outstanding. Enter all
securities described in section 165(g) discounted unpaid losses under
discounted unpaid losses, as defined
(2)(C) (relating to worthless securities) section 846 and discounted estimated
in section 846.
with maturities of more than 5 years. salvage recoverable under section
See section 832(b)(7)(B). Section 846 provides that the 832. Rev. Proc. 2023-10 also
amount of discounted unpaid losses provides, for convenience, discount
Lines 2c and 4c. The amount of must be figured separately by each factors for losses incurred in earlier
discounted unearned premiums at the line of business (multiple peril lines accident years for use in tax years
end of any tax year must be the must be treated as a single line of beginning in 2022. The discount
present value of those premiums (as business) and by each accident year factors set forth in Rev. Proc. 2023-10
of such time and separately with and must be equal to the present are determined under section 846 and
respect to premiums received in each value of those losses determined by Regulations section 1.846-1.
calendar year) determined by using: using the:
Note. P.L. 115-97, section 13523,
1. The amount of the 1. Amount of the undiscounted modified discounting rules for
undiscounted unearned premiums at unpaid losses, property and casualty insurance
such time,
2. Applicable interest rate, and companies, modified the rate of
2. The applicable interest rate, interest used to discount unpaid
and 3. Applicable loss payment
pattern. losses, modified computational rules
3. The applicable statutory for loss payment patterns, and
premium recognition pattern. Section 846(e)(6) provides that any repealed the historical payment
determination under section 846(a) pattern election. These amendments
Lines 2d and 4d. Include on lines 2d (discounted losses determined) with apply to tax years beginning after
and 4d 80% of the total of all respect to unpaid losses relating to 2017. An 8-year transition rule also
unearned premiums not reported on accident and health insurance lines of applies. See section 846 of the
lines 2a through 2c, or 4a through 4c, businesses (other than credit disability Internal Revenue Code, as modified
respectively. insurance) must be made (a) in the by P.L. 115-97, section 13523.
A reciprocal or interinsurer required case of unpaid losses relating to
under state law to reflect unearned disability income, by using the general Note. There is a special application
premiums on its annual statement net rules prescribed under section 807(d) of the “fresh start” provision for an

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insurance company that is not subject necessary, the corporation may report 85%, enter zero on line 6 and
to tax under section 831(a) for its first part of the gross receipts from a Schedule A, line 34a.
tax year beginning after December 31, particular sale of a capital asset on
1986, because (1) it is described in this schedule and the rest on Note. The deduction for any tax year
section 501(c), or (2) it is subject to Schedule D (Form 1120). Otherwise, is limited to taxable income for that tax
tax under section 831(b) on its do not include on Schedule D (Form year determined without regard to this
investment income. 1120) any sales reported on this deduction.
If the insurance company later schedule.
Note. Any determination under
becomes subject to tax under section section 833(b) must be made by only
831(a), the rules relating to the fresh Schedule H—Special taking into account items from the
start under the discounting provisions health-related business of the
are applied by treating the last tax Deduction and Ending
corporation.
year before the year in which the Adjusted Surplus for
insurance company becomes subject Section 833 Organizations Line 8a. Adjusted tax-exempt in-
come. Reduce the total tax-exempt
to tax under section 831(a) as the Section 833(c)(5) provides that
interest received or accrued during
insurance company's last tax year section 833(a)(2) and section 833(a)
the tax year by any amount (not
beginning before 1987. See section (3) do not apply to any organization
otherwise deductible) which would
1010(e) of the Technical and with an MLR of less than 85%. See
have been allowable as a deduction
Miscellaneous Revenue Act of 1988 section 833(c)(5). Also, see Medical
for the tax year if such interest were
and Notice 88-100, 1988-2 C.B. 439. loss ratio, earlier.
not tax exempt. Enter the result on
Lines 6 and 7. Estimated salvage Line 5. Beginning adjusted sur- line 8a.
and reinsurance recoverable. plus. If the corporation was a section
Line 8b. Adjusted dividends-re-
Enter on lines 6 and 7 the amount of 833 organization in 2021, it should
ceived deduction. Reduce the total
estimated salvage and reinsurance enter the amount from its 2021 Form
amount allowed as a deduction under
recoverable. See Rev. Proc. 2023-10 1120-PC, Schedule H, line 10.
for the latest information and sections 243, 244 (as affected by P.L.
Generally, the adjusted surplus as
guidance. 113-295, Div. A, section 221(a)(41)
of the beginning of any tax year is an (A), December 19, 2014, 128 Stat.
Line 9. Tax-exempt interest subject amount equal to the adjusted surplus 4043), and 245 by the amount of any
to section 832(b)(5)(B). Enter the as of the beginning of the preceding decrease in deductions allowable for
amount of tax-exempt interest tax year: the tax year because of section 832(b)
received or accrued during the tax 1. Increased by the amount of any (5)(B) when the decrease is caused
year on investments made after adjusted taxable income for the by the deductions under sections 243,
August 7, 1986. For information preceding tax year, or 244 (as affected by P.L. 113-295, Div.
regarding the determination of the A, section 221(a)(41)(A), December
acquisition date of an investment, see 2. Decreased by the amount of
the instructions for Schedule C. any adjusted NOL for the preceding 19, 2014, 128 Stat. 4043), and 245.
tax year. Enter the result on line 8b.
Line 13. Reduction of deduction
under section 832(b)(5)(B). If 2022 is the first tax year the
Multiply line 12 by the applicable taxpayer qualifies as a section 833 Schedule I—Other
percentage, which is 25% for 2021 organization, see section 833(c)(3)(C) Information
(5.25% divided by the highest to determine the adjusted surplus as Complete all items that apply to the
corporate tax rate). of the beginning of the 2022 tax year. corporation.
For purposes of the computation of
Question 4
the adjusted surplus, the terms
Schedule G—Other Capital “adjusted taxable income” and Check the “Yes” box if:
Losses “adjusted net operating loss” mean • The corporation is a subsidiary in
Capital assets are considered sold or the taxable income or the NOL, an affiliated group (defined later), but
exchanged to provide funds to meet respectively, determined with the is not filing a consolidated return for
abnormal insurance losses and to pay following modifications. the tax year with that group; or
• The corporation is a subsidiary in a
dividends and make similar 1. Without regard to the deduction
parent-subsidiary controlled group.
distributions to policyholders to the determined under section 833(b)(1).
extent that the gross receipts from For a definition of parent-subsidiary
2. Without regard to any carryover
their sale or exchange are not more controlled group, see the Instructions
or carryback to that tax year.
than the amount by which the sum of for Schedule O (Form 1120).
dividends and similar distributions 3. By increasing gross income by
Any corporation that meets either
paid to policyholders, losses paid, and an amount equal to the net exempt
of the requirements above should
expenses paid for the tax year is more income for the tax year.
check the “Yes” box. This applies
than the total on Schedule G, line 9. even if the corporation is a subsidiary
Line 6. Special deduction. The
Total gross receipts from sales of special deduction under section member of one group and the parent
capital assets (line 12, column (c)) 833(b) cannot be taken if the MLR is corporation of another.
must not be more than line 10. If less than 85%. If the MLR is less than

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Note. If the corporation is an with the highest percentage of in Temporary Regulations section
“excluded member” of a controlled ownership. 301.9100-12T. Generally, once made,
group (see the definition in the the election is irrevocable.
Foreign person. The term “foreign
Instructions for Schedule O (Form
person” means:
1120)), it is still considered a member If the corporation timely filed its
• An individual who is not a citizen or
of a controlled group for this purpose. return for the loss year without making
resident of the United States; the election, it can make the election
Affiliated group. An affiliated group • An individual who is a citizen or on an amended return filed within 6
is one or more chains of includible resident of a U.S. possession who is months of the due date of the loss
corporations (see section 1504(a)) not otherwise a citizen or resident of year return (excluding extensions).
connected through stock ownership the United States; Attach the election to the amended
with a common parent corporation. • Any partnership, association, return and enter "Filed pursuant to
The common parent must be an company, or corporation that is not section 301.9100-2" on the election
includible corporation and the created or organized in the United statement. See the Instructions for
following requirements must be met. States; Form 1139.
1. The common parent must own • Any foreign estate or trust within the
directly stock that represents at least meaning of section 7701(a)(31); or Corporations filing a consolidated
80% of the total voting power and at • A foreign government (or one of its return that elect to waive the entire
least 80% of the total value of the agencies or instrumentalities) to the carryback period for the group must
stock of at least one of the other extent that it is engaged in the also attach the statement required by
includible corporations. conduct of a commercial activity, as Regulations section 1.1502-21(b)(3)
described in section 892. or the election will not be valid.
2. Stock that represents at least
80% of the total voting power and at However, the term “foreign person” Item 11
least 80% of the total value of the does not include any foreign person Enter the amount of the NOL
stock of each of the other who consents to the filing of a joint carryover to this tax year from prior
corporations (except for the common income tax return. years, even if some of the loss is used
parent) must be owned directly by one Owner's country. For individuals, to offset income on this return. The
or more of the other includible the term “owner's country” means the amount to enter is the total of all NOLs
corporations. country of residence. For all others, it generated in prior years but not used
For this purpose, the term “stock” is the country where incorporated, to offset income (either as a carryback
generally does not include any stock organized, created, or administered. or carryover) in a tax year prior to
2022. Do not reduce the amount by
that (a) is nonvoting, (b) is Requirement to file Form 5472. If any NOL deduction reported on
nonconvertible, (c) is limited and the corporation checked “Yes,” it may Schedule A, line 36b.
preferred as to dividends and does have to file Form 5472. Generally, a
not participate significantly in 25% foreign-owned corporation that Question 12
corporate growth, and (d) has had a reportable transaction with a Schedule UTP (Form 1120) asks for
redemption and liquidation rights that foreign or domestic related party information about tax positions that
do not exceed the issue price of the during the tax year must file Form affect the U.S. federal income tax
stock (except for a reasonable 5472. See the Instructions for Form liabilities of certain corporations that
redemption or liquidation premium). 5472 for filing instructions and issue or are included in audited
See section 1504(a)(4). penalties for failure to file. financial statements and have assets
Question 6 Item 9 that equal or exceed $10 million. For
details, see the Instructions for
Check the “Yes” box if one foreign Show any tax-exempt interest Schedule UTP.
person owned at least 25% of the total received or accrued. Include any
voting power of all classes of stock of exempt-interest dividends received as Attach Schedule UTP to the
the corporation entitled to vote, or at a shareholder in a mutual fund or corporation's income tax return. Do
least 25% of the total value of all other RIC. Also, if required, include not file it separately. A taxpayer that
classes of stock of the corporation. the same amount on Schedule M-1, files a protective Form 1120-PC must
line 7 (or Schedule M-3 (Form also file Schedule UTP if it satisfies
The constructive ownership rules of 1120-PC), Part II, line 13, if the requirements set forth above.
section 318 apply in determining if a applicable).
corporation is foreign owned. See Question 13
section 6038A(c)(5) and the related Item 10 Section 833(c)(5) provides that
regulations. Generally, if the corporation has an section 833(a)(2) and section 833(a)
NOL for tax year 2022, it can (3) do not apply to a Blue Cross or
Enter on line 6a the percentage generally elect to waive the entire Blue Shield organization described in
owned by the foreign person specified carryback period for the NOL and section 833(c)(2), or other
in question 6. On line 6b, enter the instead carry the NOL forward to organization described in section
name of the owner's country. future tax years. To do so, check the 833(c)(3), unless it has an MLR of
box on line 10 and file the tax return 85% or more for the tax year.
Note. If there is more than one
by its due date, including extensions.
25%-or-more foreign owner, complete For purposes of section 833(c)(5),
Do not attach the statement described
lines 6a and 6b for the foreign person the MLR is equal to the amount

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expended on reimbursement for              in such insurance company is a            paid or accrued by the corporation 
clinical services provided to enrollees    specified holder who holds (directly or   (including the corporation's allocable 
(as defined in 45 C.F.R. 158.140) and      indirectly) aggregate interest in such    share through a partnership) for which 
for activities that improve health care    insurance company which constitutes       a deduction is not allowed.
quality (as defined in 45 C.F.R.           a percentage of the entire interests in 
                                                                                     Payments to which section 267A 
158.150) under its policies during the     such insurance company which is 
                                                                                     applies.  Interest or royalty paid or 
tax year (section 833(c)(5) MLR            more than 2% higher than the 
                                                                                     accrued by a domestic corporation 
numerator) divided by the total            percentage of interests in the 
                                                                                     (including, in the case of a domestic 
premium revenue (section 833(c)(5)         specified assets with respect to such 
                                                                                     corporation that is a partner in a 
MLR denominator). See section              insurance company held (directly or 
                                                                                     partnership, the domestic 
833(c)(5) and Regulations section          indirectly) by such specified holder 
                                                                                     corporation's allocable share of 
1.833-1. Also, see Medical loss ratio,     under section 831(b)(2)(B)(i)(II).
                                                                                     interest or royalty paid or accrued by 
earlier.                                   A corporation making an election          the partnership) is subject to section 
  Check the “Yes” box if the               under section 831(b)(2)(A)(iii) must      267A. Section 267A generally applies 
corporation is a Blue Cross or Blue        complete question 14 to indicate          to interest or royalty paid or accrued 
Shield organization described in           whether it qualifies as a small           according to a hybrid arrangement 
section 833(c)(2), or other                company, and, therefore, is eligible to   (such as, for example, a payment 
organization described in section          make the election to be taxed on          according to a hybrid instrument, or a 
833(c)(3), that has satisfied the MLR      taxable investment income because it      payment to a reverse hybrid), 
requirements of section 833(c)(5).         meets the diversification requirements    provided that the payment or accrual 
                                           of the 20% test in section 831(b)(2)(B)   is to a related party (or according to a 
  If you checked “Yes,” you must           (i)(I). If the corporation answers “No”   structured arrangement). In addition, 
enter:                                     for question 14(a), then the              under an imported mismatch rule, 
• The section 833(c)(5) MLR                corporation must satisfy the specified    section 267A generally applies to 
numerator on line 13(a),                   holder/specified asset test in section    interest or royalties paid or accrued 
• The section 833(c)(5) MLR                831(b)(2)(B)(i)(II) to qualify to make    according to a non-hybrid 
denominator on line 13(b), and             the section 831(b)(2)(A)(iii) election to arrangement where the income 
• The section 833(c)(5) percentage         be taxed on taxable investment            attributable to that payment or accrual 
on line 13(c).                             income. If the corporation satisfies the  is directly or indirectly offset by certain 
  If you checked “No,” enter zero on       specified holder/specified asset test in  deductions involving hybridity incurred 
Schedule H, line 6, and Schedule A,        section 831(b)(2)(B)(i)(II), the          by a related party or according to a 
line 34a. You cannot take the special      corporation should answer “Yes” for       structured arrangement. However, 
deduction. See the instructions for        question 14(b). If the corporation does   section 267A does not apply if a de 
Schedule H.                                not satisfy either the diversification    minimis exception is satisfied. See 
                                           requirements of section 831(b)(2)(B)      Regulations section 1.267A-1(c). For 
  Also, if you checked “No,” your          (i)(I) or section 831(b)(2)(B)(i)(II) for purposes of section 267A, interest 
deduction of unearned premiums is          the tax year (answering “No” for both     and royalties are defined broadly. For 
limited. See the instructions for          questions), the corporation is not a      additional information about 
Schedule E for more information.           small company and, therefore, is not      arrangements subject to section 
Question 14                                eligible to be taxed on taxable           267A, see Regulations sections 
                                           investment income under section           1.267A-2 and 1.267A-4. Also, see the 
Only a corporation that qualifies as a     831(b) in lieu of the tax otherwise       anti-avoidance rule under Regulations 
small company under section 831(b)         applicable under section 831(a).          section 1.267A-5(b)(6).
(2) is eligible to elect to be taxed on 
taxable investment income under            Question 15                               Extent to which deduction is disal-
section 831(b) in lieu of the tax          If the corporation had gross receipts     lowed.  When section 267A applies 
otherwise applicable under section         of at least $500 million in any 1 of the  to interest or royalties paid or accrued 
831(a). See section 831(b)(2)(A)(iii).     3 preceding tax years, complete Form      pursuant to a hybrid arrangement, it 
Section 831(b)(2)(A)(ii) provides that     8991 and attach it to this return. For    generally disallows a deduction for the 
a corporation must meet the                this purpose, the corporation's gross     amount to the extent that, under the 
diversification requirements in section    receipts include the gross receipts of    foreign tax law, there is not a 
831(b)(2)(B) to qualify as a small         all persons aggregated with the           corresponding income inclusion 
company. A corporation meets the           corporation, as specified in section      (including long-term deferral). 
diversification requirements if under      59A(e)(3). See the Instructions for       However, the deduction is not 
section 831(b)(2)(B)(i)(I) no more than    Form 8991 to determine if the             disallowed to the extent the amount is 
20% of the net written premiums (or, if    corporation is subject to the base        directly or indirectly included in 
greater, direct written premiums) of       erosion minimum tax.                      income in the United States, such as if 
such corporation for the tax year is                                                 the amount is taken into account with 
attributable to any one policyholder.      Question 16                               respect to a U.S. shareholder under 
However, a corporation that does not       If the corporation paid or accrued any    section 951(a) or section 951A. For 
meet this 20% test can meet the            interest or royalty for which a           additional information, see 
diversification requirement under          deduction is not allowed under            Regulations sections 1.267A-2 
section 831(b)(2)(B) if no person who      section 267A, check "Yes" and enter       through 1.267A-4. For examples 
holds (directly or indirectly) an interest the total amount of interest and royalty 
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illustrating the application of section The balance sheets should agree
267A, see Regulations section with the corporation's books and Schedule M-1—
1.267A-6. records. Reconciliation of Income
Question 17 If filing a consolidated return, report (Loss) per Books With
Check “Yes” if the taxpayer has an total consolidated assets, liabilities, Income (Loss) per Return
election in effect to exclude a real and shareholders’ equity for all In completing Schedule M-1, the
property trade or business or a corporations joining in the return. See following apply.
farming business from section 163(j). Consolidated returns, earlier.
• All insurance companies required to
For more information, see section Corporations with total assets file Form 1120-PC with total assets
163(j) and the Instructions for Form (nonconsolidated or consolidated for (nonconsolidated or consolidated for
8990. all corporations included within the tax all corporations included within the tax
Question 18 consolidation group) of $10 million or consolidation group) of $10 million or
more on the last day of the tax year
Generally, a taxpayer with a trade or more on the last day of the tax year
must file Schedule M-3 (Form
business must file Form 8990 to claim must file Schedule M-3 (Form
1120-PC) instead of Schedule M-1.
a deduction for business interest. In 1120-PC) instead of Schedule M-1.
See the separate Instructions for
addition, Form 8990 must be filed by See Schedule M-3 (Form 1120-PC),
Schedule M-3 (Form 1120-PC) for
any taxpayer that owns an interest in a earlier.
provisions that also affect Schedule L.
partnership with current year, or prior • A corporation filing Form 1120-PC
year carryover, excess business Line 1. Cash. Include certificates of that is not required to file
interest expense allocated from the deposit as cash on this line. Schedule M-3 (Form 1120-PC) may
voluntarily file Schedule M-3 (Form
partnership. Line 5. Tax-exempt securities. 1120-PC) instead of Schedule M-1.
Exclusions from filing. A taxpayer Include on this line: See the Instructions for Schedule M-3
is not required to file Form 8990 if the • State and local government (Form 1120-PC) for more information.
taxpayer is a small business taxpayer obligations, the interest on which is
(defined below) and does not have excludable from gross income under Line 5c. Travel and entertainment.
excess business interest expense section 103(a); and Include on line 5c any of the following.
from a partnership. A taxpayer is also • Stock in a mutual fund or other RIC • Entertainment expenses not
not required to file Form 8990 if the that distributed exempt-interest deductible under section 274(a).
taxpayer only has business interest dividends during the tax year of the • Meal expenses not deductible
expense from the following excepted corporation. under section 274(n).
• Expenses for the use of an
trades or businesses. Line 18. Insurance liabilities. entertainment facility.
• An electing real property trade or Include on this line: • The part of business gifts over $25.
•
business. Undiscounted unpaid losses, • Expenses of an individual over
•
• An electing farming business. Loss adjustment expenses, and $2,000, allocable to conventions on
•
• Certain utility businesses. Unearned premiums. cruise ships.
Small business taxpayer. A small See section 846 for more • Employee achievement awards of
business taxpayer is not subject to the information. nontangible or tangible property over
business interest expense limitation $400 ($1,600 if part of a qualified
and is not required to file Form 8990. Line 27. Adjustments to sharehol-
A small business taxpayer is a ders' equity. Some examples of plan).
taxpayer that (a) is not a tax shelter adjustments to report on this line • The cost of skyboxes.
(as defined in section 448(d)(3)); and include: • Nondeductible club dues.
(b) meets the gross receipts test of • Unrealized gains and losses on • The part of luxury water travel
section 448(c), discussed next. securities held “available for sale,” expenses not deductible under
• Foreign currency translation section 274(m).
Gross receipts test. For tax years adjustments, • Expenses for travel as a form of
beginning in 2022, a taxpayer meets • The excess of additional pension education.
the gross receipts test if the taxpayer liability over unrecognized prior • Other nondeductible travel and
has average annual gross receipts of service cost, entertainment expenses.
$27 million or less for the 3 prior tax • Guarantees of ESOP debt, and For more information, see Pub.
years. See section 448(c) and the • Compensation related to employee 535.
Instructions for Form 8990 for stock award plans. Line 7a. Tax-exempt interest.
additional information.
If the total adjustment to be entered Report any tax-exempt interest
on line 27 is a negative amount, enter received or accrued, including any
Schedule L—Balance the amount in parentheses. exempt-interest dividends received as
Sheets per Books a shareholder in a mutual fund or
other RIC. Also, report this same
Note. All insurance companies amount on Schedule I, item 10.
required to file Form 1120-PC must
complete Schedule L.

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Paperwork Reduction Act Notice. We ask for the information on these forms to carry out the Internal Revenue laws of
the United States. You are required to give us the information. We need it to ensure that you are complying with these
laws and to allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be
retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden
for business taxpayers filing this form is approved under OMB control number 1545-0123 and is included in the
estimates shown in the instructions for their business income tax return.
If you have comments or suggestions for making this form and related schedules simpler, we would be happy to hear
from you. You can send us comments through IRS.gov/FormComments. Or you can write to:

Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224

Do not send the tax form to this address. Instead, see Where To File, earlier.

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Index
 
                                Prorated amounts   18                                      Related party 
A                               Undiscounted unearned     L                                 transactions  12
Accounting methods     5        premiums      20          Limitation on 
Accounting methods,           Depository methods of tax       dividends-received           S
  change in  5                  payment    4                  deduction 20                 Schedule:
Accounting period (tax        Disclosure statement   5    Limitations on                    A 10
  year) 5                                                     deductions     12             B, Part I 17
Address change   8            E                           Lobbying expenses     16          B, Part II 18
Adjustments to                Electronic deposit of tax                                     C 18
  shareholders' equity   25     refund of $1 million or   M                                 E 20
Affiliated group 23             more 10                   Medical loss ratio    5 21 23, -  F 21
Amended return   8            Electronic federal tax      Medical loss ratio (MLR)     20   G 22
Amortization 12                 payment system 
Assembling the return  3        (EFTPS) 4                 Minimum tax:                      H 22
                              Electronic filing 2             Prior year, credit for 8      I 22
B                             Employer identification                                       L 25
                                number (EIN)    7         N                                 M-1 25
Backup withholding  10        Estimated tax:              NAIC annual statement        3    M-3 7
Base erosion minimum            Payments   4 9,           Name change    8                 Section 953 election           7
  tax 8                         Penalty 4 10,             Net operating loss    17
Blue Cross or Blue            Extension of time to file 3                                  T
  Shield 20 23, 
                                                          O                                Tax and payments              8
Business start-up             F                           Other deductions      15         Tax issues, unresolved          1
  expenses  12
                              Final return 8              Owner's country    23            Tax rate 8
C                             Foreign corporations   9                                     Tax-exempt securities           25
Charitable contributions   14 Foreign person    23        P                                Travel, meals, and 
                                                                                            entertainment   16
Consolidated return 6         Foreign tax credit  8       Paid preparer 
Controlled group:             Forms and publications,         authorization  3
  Member of  8                                            Penalties    4 10,               U
                                how to get 2
                                                          Pension, profit-sharing, etc.    Uncertain tax positions         23
  Parent-subsidiary 8         G                               plans 15
D                             General business credit   8 Period covered     6             W
                              Golden parachute            Personal holding company         When to file, extension         3
Deductions  12                  payments   12                 tax 9                        Where to file 2
Definitions 18                                            Private delivery services    3   Who must file:
  100% dividend  18           I                                                             Exceptions   2
  Applicable interest rate 20                             R                                 Life insurance companies         2
  Applicable statutory        Insurance liabilities 25
  premium recognition         Interest due on late        Recordkeeping      5             Who must sign  3
  pattern   20                  payment of tax   4                                         Worksheet for 
                                                                                            Schedule C    20

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