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                                                                                                         Department of the Treasury
                                                                                                         Internal Revenue Service
2022

Instructions for Form 1120-L

U.S. Life Insurance Company Income Tax Return

Section references are to the Internal            Contents                                    Page   benefit allowed and the amounts 
Revenue Code unless otherwise noted.              Schedule L        . . . . . . . . . . . . . .   22 claimed are reportable as income. 
Contents                                  Page    Schedule M—Other                                   See Line 7. Other income, later.
Future Developments .   . . . . . . . . . . . 1           Information   . . . . . . . . . . . .   22
                                                                                                     Alternative minimum tax.    For tax 
What's New . . . . . . . . . . . . . . . . . . 1  Index . . . . . . . . . . . . . . . . . . . . . 25
                                                                                                     years beginning after December 31, 
Photographs of Missing Children       . . . . 1                                                      2022, the Inflation Reduction Act of 
The Taxpayer Advocate Service .       . . . . 1   Future Developments                                2022 (the IRA) imposes a corporate 
How To Get Forms and                              For the latest information about                   alternative minimum tax (AMT). 
Publications .   . . . . . . . . . . . . . . 2                                                       Applicable corporations (within the 
                                                  developments related to Form 1120-L 
General Instructions .  . . . . . . . . . . . . 2                                                    meaning of section 59(k)) may be 
                                                  and its instructions, such as 
Purpose of Form .       . . . . . . . . . . . 2
Who Must File      . . . . . . . . . . . . . 2    legislation enacted after they were                required to pay this AMT. Short-period 
Definitions .  . . . . . . . . . . . . . . . 2    published, go to IRS.gov/Form1120L.                filers with a tax year beginning after 
                                                                                                     December 31, 2022, and ending 
Electronic Filing       . . . . . . . . . . . . 3
When To File .     . . . . . . . . . . . . . 3    What's New                                         before December 31, 2023, see 
                                                                                                     section 55 and the instructions for 
Where To File .    . . . . . . . . . . . . . 3    Increase in penalty for failure to                 Schedule K, line 9, later.
Who Must Sign .         . . . . . . . . . . . . 3 file. For returns due in 2023, the 
Paid Preparer Authorization .         . . . . 3   minimum penalty for failure to file a              Photographs of Missing 
Statements .     . . . . . . . . . . . . . . 4    return that is more than 60 days late 
Assembling the Return .         . . . . . . . 4   has increased to the smaller of the tax            Children
Tax Payments       . . . . . . . . . . . . . 4    due or $450. See Late filing of return,            The IRS is a proud partner with the 
Interest and Penalties .      . . . . . . . . 5   later.                                             National Center for Missing & 
Accounting Methods .          . . . . . . . . 5                                                      Exploited Children® (NCMEC). 
Accounting Period .       . . . . . . . . . . 6   Form 1120-W now historical.                 Form   Photographs of missing children 
Rounding Off to Whole                             1120-W, Estimated Tax for                          selected by the Center may appear in 
Dollars .      . . . . . . . . . . . . . . . 6    Corporations, and the Instructions for             instructions on pages that would 
Recordkeeping .         . . . . . . . . . . . . 6 Form 1120-W are now historical. The                otherwise be blank. You can help 
Other Forms and                                   2022 Form 1120-W (released in 2021)                bring these children home by looking 
Statements That May Be                            and the 2022 Instructions for Form                 at the photographs and calling 
Required .       . . . . . . . . . . . . . . 6
                                                  1120-W (released in 2021) will be the 
Specific Instructions . . . . . . . . . . . . . 7                                                    1-800-THE-LOST (1-800-843-5678) if 
                                                  last revisions of the form and its 
Period Covered          . . . . . . . . . . . . 7                                                    you recognize a child.
                                                  instructions. Prior versions will be 
Name and Address .          . . . . . . . . . 7
                                                  available on IRS.gov.
Item A. Identifying                                                                                  The Taxpayer Advocate 
Information        . . . . . . . . . . . . . 7    Payroll credit for COVID-related                   Service
Item B. Employer                                  paid sick and family leave.                        The Taxpayer Advocate Service 
Identification Number                             Generally, the credit for qualified sick           (TAS) is an independent 
(EIN)        . . . . . . . . . . . . . . . . . 8
Item D. Section 953                               and family leave wages, as enacted                 organization within the IRS that helps 
Elections .      . . . . . . . . . . . . . . 8    under the Families First Coronavirus               taxpayers and protects taxpayer 
Item E. Final Return, Name                        Response Act (FFCRA) and amended                   rights. TAS's job is to ensure that 
Change, Address                                   and extended by the COVID-related                  every taxpayer is treated fairly and 
Change, or Amended                                Tax Relief Act of 2020, and the credit             knows and understands their rights 
Return       . . . . . . . . . . . . . . . . 8    for qualified sick and family leave                under the Taxpayer Bill of Rights.
Life Insurance Company                            wages, as enacted under the 
Taxable Income .            . . . . . . . . . 9
Schedule A—Dividends,                             American Rescue Plan Act of 2021                     As a taxpayer, the corporation has 
Inclusions,                                       (the ARP), have expired. However,                  rights that the IRS must abide by in its 
Dividends-Received                                employers that paid qualified sick and             dealings with the corporation. TAS 
Deduction, and Other                              family leave wages in 2022 for leave               can help the corporation if:
Special Deductions .            . . . . . .   16  taken after March 31, 2020, and 
Schedule B—Investment                             before October 1, 2021, may be                     • A problem is causing financial 
Income .       . . . . . . . . . . . . . .    18                                                     difficulty for the business;
Schedule F—Increase                               eligible to claim a credit for qualified 
(Decrease) in Reserves                            sick and family leave wages in 2022.               • The business is facing an 
(Section 807) .         . . . . . . . . . .   19  See the March 2022 revision of the                 immediate threat of adverse action; or
Schedule G—Policy                                 Instructions for Form 941and the 2022              • The corporation has tried 
Acquisition Expenses .            . . . . .   20  Instructions for Form 944 for more                 repeatedly to contact the IRS but no 
Schedule K—Tax                                    information. There is no double tax                one has responded, or the IRS hasn't 
Computation             . . . . . . . . . . . 20                                                     responded by the date promised.

Feb 22, 2023                                                  Cat. No. 11485H

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The TAS toolkit at described in section 501(m)(1) that insurance company that makes an
TaxpayerAdvocate.IRS.gov can help provide commercial-type life election under section 953(d) (for
the corporation understand these insurance. information on these elections, see
rights. the instructions for item D). If a foreign
Mutual Savings Banks insurance company electing under
TAS has offices in every state, the Conducting Life Insurance section 953(c)(3)(C) wholly owns a
District of Columbia, and Puerto Rico. Business domestic DE, the DE may be required
Local advocates' numbers are in their to file Form 5472, Information Return
Mutual savings banks conducting life
local directories and at of a 25% Foreign-Owned U.S.
insurance business and meeting the
TaxpayerAdvocate.IRS.gov/Contact- Corporation or a Foreign Corporation
requirements of section 594 are
Us. The corporation can also call TAS Engaged in a U.S. Trade or Business.
subject to an alternative tax consisting
at 877-777-4778. For additional information and
of:
TAS also works to resolve • A partial tax computed on Form coordination with Form 5472 filing by
large-scale or systemic problems that 1120, U.S. Corporation Income Tax the domestic DE, see the Instructions
affect many taxpayers. If the Return, on the taxable income of the for Form 5472.
corporation knows of one of these bank, excluding the life insurance
broad issues, please report it to TAS department; and Note. A domestic DE is generally a
through the Systemic Advocacy • A partial tax on the taxable income transparent entity. Any insurance
Management System at IRS.gov/ computed on Form 1120-L of the life company that must file Form 1120-L
SAMS. insurance department. will include on Form 1120-L any tax
items of a wholly owned domestic DE
Enter the combined tax on Form
For more information, go to that are subject to reporting.
1120, Schedule J, line 2. File Form
IRS.gov/Advocate. Qualified opportunity investment.
1120 and attach Form 1120-L as a
statement (and identify it as such) or If the corporation held a qualified
How To Get Forms and attach a statement showing the investment in a qualified opportunity
Publications computation of the taxable income of fund (QOF) at any time during the
Internet. You can access the IRS the life insurance department year, the corporation must file its
website 24 hours a day, 7 days a (including all relevant information that return with Form 8997, Initial and
week, at IRS.gov to: would be reported on Form 1120-L). Annual Statement of Qualified
Opportunity Fund (QOF) Investments,
• Download forms, instructions, and Foreign Life Insurance attached. See the Instructions for
publications;
Companies Form 8997.
• Order IRS products online;
• Research your tax questions online; A foreign life insurance company that Other Insurance Companies
• Search publications online by topic sells a U.S. real property interest must
or keyword; file Form 1120-L and Schedule D Insurance companies, other than life
• View Internal Revenue Bulletins (Form 1120) to report the sale. Gain insurance companies, should file
(IRBs) published in recent years; and or loss from the sale of a U.S. real Form 1120-PC, U.S. Property and
• Sign up to receive local and property interest is considered Casualty Insurance Company Income
national tax news by email. effectively connected with the conduct Tax Return. A burial or funeral benefit
of a U.S. business, even though the insurance company that directly
Tax forms and publications. The foreign life insurance company does manufactures funeral supplies or
corporation can view, download, or not carry on any insurance business in performs funeral services is taxable
print all of the forms and publications the United States and is not otherwise under section 831 and should file
it may need on IRS.gov/FormsPubs. required to file a U.S. income tax Form 1120-PC.
Otherwise, the corporation can go to return. See sections 842 and 897; and
IRS.gov/OrderForms to place an the instructions for Schedule K, line 8, Definitions
order and have forms mailed to it. later. An “insurance company” means any
corporation if more than half of its
Foreign-owned domestic disregar- business during the tax year is from
General Instructions ded entities. If a foreign person, the issuance of insurance or annuity
including a foreign corporation, wholly contracts or the reinsuring of risks
Purpose of Form owns a domestic disregarded entity underwritten by insurance companies.
Use Form 1120-L to report the (DE), the domestic DE is treated as a
income, gains, losses, deductions, domestic corporation separate from A “life insurance company” is an
credits, and to figure the income tax its owner (the foreign corporation) for insurance company in the business of
liability of life insurance companies. purposes of the reporting issuing life insurance and annuity
requirements under section 6038A contracts either separately or
Who Must File that apply to 25% foreign-owned combined with health and accident
Every domestic life insurance domestic corporations. These rules insurance, or noncancelable contracts
company and certain foreign apply to a domestic DE owned by a of health and accident insurance that
corporations that would qualify as a foreign insurance company that meet the reserves test in section
life insurance company if it were a makes an election under section 816(a). Guaranteed renewable life,
U.S. corporation must file Form 953(c)(3)(C) but do not apply to a health, and accident insurance that
1120-L. This includes organizations domestic DE owned by a foreign the corporation cannot cancel but
-2- Instructions Form 1120-L (2022)

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reserves the right to adjust premium 
rates by classes, according to          Where To File
experience under the kind of policy     File the corporation's return at the applicable IRS address listed below.
involved, are treated as 
noncancelable.                           
The “reserves test” requires that life  If the corporation's principal business, office,    
insurance reserves, as defined in       or agency is located in:                            Use the following address:
section 816(b), plus unearned                                                               Department of the Treasury 
premiums and unpaid losses (whether     The United States                                   Internal Revenue Service Center
or not ascertained) on noncancelable                                                        Ogden, UT 84201-0012
life, health, or accident policies not                                                      Internal Revenue Service Center
included in life insurance reserves     A foreign country or U.S. possession                P.O. Box 409101
must make up more than 50% of total                                                         Ogden, UT 84409
reserves as defined in section 816(c). 
When determining whether the 
reserves test has been met:             the short period ends. A corporation             Who Must Sign
1. Life insurance reserves and          that has dissolved must generally file           The return must be signed and dated 
total reserves must each be reduced     by the 15th day of the 4th month after           by:
by an amount equal to the mean of the   the date it dissolved.                           • The president, vice-president, 
aggregates, at the beginning and end                                                     treasurer, assistant treasurer, chief 
                                           However, a corporation with a fiscal 
of the tax year, of the policy loans                                                     accounting officer; or
                                        tax year ending June 30 must file by 
outstanding with respect to contracts                                                    • Any other corporate officer (such as 
                                        the 15th day of the 3rd month after the 
for which life insurance reserves are                                                    tax officer) authorized to sign.
                                        end of its tax year. A corporation with 
maintained;
                                        a short tax year ending any time in                If a return is filed on behalf of a 
2. Amounts set aside and held at        June will be treated as if the short year  corporation by a receiver, trustee, or 
interest to satisfy obligations under   ended on June 30, and must file by               assignee, the fiduciary must sign the 
contracts that do not contain           the 15th day of the 3rd month after the          return, instead of the corporate officer. 
permanent guarantees with respect to    end of its tax year.                             Returns and forms signed by a 
life, accident, or health contingencies                                                  receiver or trustee in bankruptcy on 
must not be included in either life        If the due date falls on a Saturday,          behalf of a corporation must be 
insurance reserves (section 816(c)(1))  Sunday, or legal holiday, the                    accompanied by a copy of the order 
or other reserves required by law       corporation can file on the next                 or instructions of the court authorizing 
(section 816(c)(3)); and                business day.                                    signing of the return or form.
3. Deficiency reserves must not be      Private Delivery Services                        Paid Preparer Use Only section.       If 
included in either life insurance 
                                        Corporations can use certain private             an employee of the corporation 
reserves or total reserves.
                                        delivery services (PDSs) designated              completes Form 1120-L, the paid 
                                        by the IRS to meet the “timely mailing           preparer section should remain blank. 
Electronic Filing                                                                        Anyone who prepares Form 1120-L 
                                        as timely filing” rule for tax returns. Go 
Corporations can generally              to IRS.gov/PDS for the current list of           but does not charge the corporation 
electronically file (e-file) Form 7004  designated services.                             should not complete that section. 
(automatic extension of time to file)                                                    Generally, anyone who is paid to 
and Forms 940, 941, and 944                The PDS can tell you how to get               prepare the return must sign it and 
(employment tax returns). If there is a written proof of the mailing date.               complete the section.
balance due, the corporation can 
authorize an electronic funds              For the IRS mailing address to use              The paid preparer must complete 
withdrawal while e-filing. Form 1099    if you're using a PDS, go to IRS.gov/            the required preparer information and:
and other information returns can also  PDSStreetAddresses.                              • Sign the return in the space 
be electronically filed. The option to                                                   provided for the preparer's signature,
                                                 PDSs cannot deliver items to 
e-file does not, however, apply to                                                       • Include their Preparer Tax 
                                                 P.O. boxes. You must use the 
certain returns.                        CAUTION!                                         Identification Number (PTIN), and
                                                 U.S. Postal Service to mail             • Give a copy of the return to the 
For more information, go to             any item to an IRS P.O. box address.             taxpayer.
IRS.gov/Filing. Click on the links for 
“Businesses & Self-Employed” and        Extension of Time To File                        Note. A paid preparer may sign 
“Corporations.”                         File Form 7004, Application for                  original or amended returns by rubber 
                                        Automatic Extension of Time To File              stamp, mechanical device, or 
When To File                            Certain Business Income Tax,                     computer software program.
Generally, a corporation must file its  Information, and Other Returns, to 
income tax return by the 15th day of    request an extension of time to file.            Paid Preparer 
the 4th month after the end of its tax  Generally, file Form 7004 by the                 Authorization
year. A new corporation filing a        regular due date of the return. See the          If the corporation wants to allow the 
short-period return must generally file Instructions for Form 7004.                      IRS to discuss its 2022 tax return with 
by the 15th day of the 4th month after 

Instructions Form 1120-L (2022)                           -3-

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the paid preparer who signed it, check attached, you must provide a copy of holiday, the payment is due on the
the “Yes” box in the signature area of the annual statement or pro forma next day that isn't a Saturday,
the return. This authorization applies annual statement to the IRS if Sunday, or legal holiday.
only to the individual whose signature requested and retain it with your other
appears in the “Paid Preparer Use tax records for the period required by Electronic Deposit
Only” section of the return. It doesn’t the regulations. Requirement
apply to the firm, if any, shown in that Corporations must use electronic
Reconciliation. Corporations that
section. funds transfer to make all federal tax
do not file Schedule M-3 (Form deposits (such as deposits of
If the “Yes” box is checked, the 1120-L) with Form 1120-L must attach employment, excise, and corporate
corporation is authorizing the IRS to a statement that reconciles Form income tax). Generally, electronic
call the paid preparer to answer any 1120-L with the annual statement funds transfers are made using the
questions that may arise during the used as the basis for computing Electronic Federal Tax Payment
processing of its return. The taxable income reported on Form System (EFTPS).
corporation is also authorizing the 1120-L. Also, see the Note under the
paid preparer to: instructions for Schedule F, later, for If the corporation does not want to
• Give the IRS any information that is additional required reconciliations. use EFTPS, it can arrange for its tax
missing from the return; professional, financial institution,
• Call the IRS for information about Assembling the Return payroll service, or other trusted third
the processing of the return or the To ensure that the corporation's tax party to make deposits on its behalf.
status of any related refund or return is correctly processed, attach Also, it can arrange for its financial
payment(s); and all schedules and other forms after institution to submit a same-day wire
• Respond to certain IRS notices page 5 of Form 1120-L in the payment (discussed later) on its
about math errors, offsets, and return following order. behalf. EFTPS is a free service
preparation. 1. Schedule N (Form 1120). provided by the Department of the
Treasury. Services provided by a tax
The corporation is not authorizing 2. Form 4136.
professional, financial institution,
the paid preparer to receive any 3. Form 8978. payroll service, or other third party
refund check, bind the corporation to
4. Form 965-B. may have a fee.
anything (including any additional tax
liability), or otherwise represent the 5. Form 8941.
To get more information about
corporation before the IRS. 6. Form 3800. EFTPS or to enroll in EFTPS, visit
The authorization will automatically 7. Additional schedules in EFTPS.gov or call 800-555-4477. To
end no later than the due date alphabetical order. contact EFTPS using
(excluding extensions) for filing the 8. Additional forms in numerical Telecommunications Relay Services
corporation's 2023 tax return. If the order. (TRS) for people who are deaf, hard
of hearing, or have a speech
corporation wants to expand the paid 9. Supporting statements and
disability, dial 711 and provide the
preparer's authorization or revoke the attachments.
authorization before it ends, see Pub. TRS assistant the 800-555-4477
947, Practice Before the IRS and Complete every applicable entry number above or 800-733-4829.
Power of Attorney. space on Form 1120-L. Do not enter Depositing on time. To make your
“See Attached” or “Available Upon EFTPS deposits on time, the
Statements Request” instead of completing the corporation must submit the
entry spaces. If more space is needed transaction by 8 p.m. Eastern time the
Annual statement. In general, every on the forms or schedules, attach day before the date the deposit is due.
domestic or foreign life insurance separate sheets using the same size If the corporation uses a third party to
company must attach a copy of the and format as on the printed forms. If make deposits on its behalf, they may
National Association of Insurance there are supporting statements and have different cutoff times.
Commissioners (NAIC) annual attachments, arrange them in the
statement filed with the state of same order as the schedules or forms Same-day wire payment option. If
domicile and used as the basis for they support and attach them last. the corporation fails to submit a
computing taxable income. If a Show the totals on the printed forms. deposit transaction on EFTPS by 8
different annual statement was used Enter the corporation's name and p.m. Eastern time the day before the
as the basis for computing taxable employer identification number (EIN) date a deposit is due, it can still make
income, attach that annual statement on each supporting statement or the deposit on time by using the
to Form 1120-L. However, see attachment. Federal Tax Collection Service
Electronic filing next. (FTCS). To use the same-day wire
Electronic filing. If a domestic or Tax Payments payment method, the corporation will
foreign life insurance company files Generally, the corporation must pay need to make arrangements with its
Form 1120-L electronically, don’t any tax due in full no later than the financial institution ahead of time
attach the annual statement or pro due date for filing its tax return (not regarding availability, deadlines, and
forma annual statement to the including extensions). See the costs. Financial institutions may
electronically filed return. However, if instructions for line 30. If the due date charge a fee for payments made this
the full annual statement is not falls on a Saturday, Sunday, or legal way. To learn more about making a

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same-day wire payment, go to penalty. If Form 2220 is completed, • Form 945, Annual Return of
IRS.gov/SameDayWire. enter the penalty on line 29. See the Withheld Federal Income Tax.
instructions for line 29, later. The trust fund recovery penalty
Estimated Tax Payments may be imposed on all persons who
Interest and Penalties are determined by the IRS to be
Generally, the following rules apply to responsible for collecting, accounting
If the corporation receives a
the corporation's payments of for, or paying over these taxes, and
notice about penalties after it
estimated tax. CAUTION! who acted willfully in not doing so.
files its return, send the IRS
• The corporation must make The penalty is equal to the full amount
an explanation and we will determine
installment payments of estimated tax of the unpaid trust fund tax. See the
if the corporation meets
if it expects its total tax for the year Instructions for Form 720; and Pub. 15
reasonable-cause criteria. Do not
(less applicable credits) to be $500 or (Circular E), Employer's Tax Guide,
attach an explanation when the
more. for details, including the definition of
corporation's return is filed.
• The installments are due by the responsible persons.
15th day of the 4th, 6th, 9th, and 12th Interest. Interest is charged on taxes
months of the tax year. If any date paid late even if an extension of time Note. The trust fund recovery penalty
falls on a Saturday, Sunday, or legal to file is granted. Interest is also will not apply to any amount of trust
holiday, the installment is due on the charged on penalties imposed for fund taxes an employer holds back in
next regular business day. failure to file, negligence, fraud, anticipation of the credit for qualified
• The corporation must use electronic substantial valuation misstatements, sick and family leave wages or the
funds transfer to make installment substantial understatements of tax, employee retention credit that they
payments of estimated tax. and reportable transaction are entitled to. See Pub. 15 for more
• If, after the corporation figures and understatements from the due date information.
deposits estimated tax, it finds that its (including extensions) to the date of Other penalties. Other penalties can
tax liability for the year will be more or payment. The interest charge is be imposed for negligence,
less than originally estimated, it may figured at a rate determined under substantial understatement of tax,
have to refigure its required section 6621. reportable transaction
installments. If earlier installments
were underpaid, the corporation may Late filing of return. A corporation understatements, and fraud. See
owe a penalty. See Estimated tax that does not file its tax return by the sections 6662, 6662A, and 6663.
penalty below. due date, including extensions, may
• If the corporation overpaid be penalized 5% of the unpaid tax for Accounting Methods
estimated tax, it may be able to get a each month or part of a month the The return of a life insurance company
quick refund by filing Form 4466, return is late, up to a maximum of 25% must be filed using the accrual
Corporation Application for Quick of the unpaid tax. The minimum method of accounting or, to the extent
Refund of Overpayment of Estimated penalty for a return that is over 60 permitted under regulations, a
Tax. See the instructions for line 28d, days late is the smaller of the tax due combination of the accrual method
later. or $450 (adjusted for inflation). The with any other method, except the
penalty will not be imposed if the cash receipts and disbursements
See section 6655 for for more method. In all cases, the method used
corporation can show that the failure
information on how to figure estimated must clearly show life insurance
to file on time was due to reasonable
taxes. Also, see the instructions for company taxable income (LICTI).
cause. See Caution, earlier.
line 28c, later.
Late payment of tax. A corporation Change in accounting method.
Estimated tax penalty. A Generally, the corporation must get
that does not pay the tax when due
corporation that does not make 1 2 IRS consent to change either an
may generally be penalized / of 1%
estimated tax payments when due overall method of accounting or the
of the unpaid tax for each month or
may be subject to an underpayment accounting treatment of any material
part of a month the tax is not paid, up
penalty for the period of item for income tax purposes. To
to a maximum of 25% of the unpaid
underpayment. Generally, a obtain consent, the corporation must
tax. See Caution, earlier.
corporation is subject to the penalty if generally file Form 3115, Application
its tax liability is $500 or more and it Trust fund recovery penalty. This for Change in Accounting Method,
did not timely pay at least the smaller penalty may apply if certain excise, during the tax year for which the
of: income, social security, and Medicare change is requested. See the
• Its tax liability for the current year, taxes that must be collected or Instructions for Form 3115 and Pub.
or withheld are not collected or withheld, 538 for more information and
• Its prior year's tax. or these taxes are not paid. These exceptions. Also, see the Instructions
See section 6655 for details and taxes are generally reported on: for Form 3115 for procedures that
exceptions, including special rules for • Form 720, Quarterly Federal Excise may apply for obtaining automatic
large corporations. Tax Return; consent to change certain methods of
• Form 941, Employer's
Use Form 2220, Underpayment of accounting, non-automatic change
QUARTERLY Federal Tax Return;
Estimated Tax by Corporations, to procedures, and reduced Form 3115
• Form 944, Employer's ANNUAL
see if the corporation owes a penalty filing requirements.
Federal Tax Return; or
and to figure the amount of the

Instructions Form 1120-L (2022) -5-

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Accounting Period Other Forms and Reportable transactions by materi-
An insurance company must figure its Statements That May Be al advisors. Material advisors to any
reportable transaction must disclose
taxable income on the basis of a tax Required
year. A tax year is the annual certain information about the
accounting period an insurance Reportable transaction disclosure reportable transaction by filing Form
company uses to keep its records and statement. Disclose information for 8918, Material Advisor Disclosure
report its income and expenses. each reportable transaction in which Statement, with the IRS. See the
the corporation participated. Form Instructions for Form 8918.
As a general rule under section 8886, Reportable Transaction
Transfers to a corporation control-
843, the tax year for every insurance Disclosure Statement, must be filed
led by the transferor. Every
company is the calendar year. for each tax year that the federal
significant transferor (as defined in
However, if an insurance company income tax liability of the corporation
Regulations section 1.351-3(d)(1))
joins in the filing of a consolidated is affected by its participation in the
that receives stock of a corporation in
return, it may adopt the tax year of the transaction. The following are
exchange for property in a
common parent corporation even if reportable transactions.
that year is not a calendar year. nonrecognition event must include the
1. Any listed transaction, which is statement required by Regulations
a transaction that is the same as or
Rounding Off to Whole section 1.351-3(a) on or with the
substantially similar to one of the transferor's tax return for the tax year
Dollars types of transactions that the IRS has of the exchange. The transferee
The corporation may enter decimal determined to be a tax avoidance corporation must include the
points and cents when completing its transaction and identified by notice, statement required by Regulations
return. However, the corporation regulation, or other published section 1.351-3(b) on or with its return
should round off cents to whole guidance as a listed transaction. for the tax year of the exchange,
dollars on its return, forms, and
2. Any transaction offered under unless all the required information is
schedules to make completing its
conditions of confidentiality for which included in any statement(s) provided
return easier. The corporation must
the corporation (or a related party) by a significant transferor that is
either round off all amounts on its
paid an advisor a fee of at least attached to the same return for the
return to whole dollars, or use cents
$250,000. same section 351 exchange. If the
for all amounts. To round, drop
amounts under 50 cents and increase 3. Certain transactions for which transferor or transferee corporation is
amounts from 50 to 99 cents to the the corporation (or a related party) a controlled foreign corporation
next dollar. For example, $8.40 has contractual protection against (CFC), each U.S. shareholder (within
rounds to $8 and $8.50 rounds to $9. disallowance of the tax benefits. the meaning of section 951(b)) must
include the required statement on or
4. Certain transactions resulting in
If two or more amounts must be with its return.
a loss of at least $10 million in any
added to figure the amount to enter on Distributions under section 355.
single year or $20 million in any
a line, include cents when adding the Every corporation that makes a
combination of years.
amounts and round off only the total. distribution of stock or securities of a
5. Any transaction identified by the
Recordkeeping IRS by notice, regulation, or other controlled corporation, as described
Keep the corporation's records for as published guidance as a “transaction in section 355 (or so much of section
long as they may be needed for the of interest.” 356 as it relates to section 355), must
include the statement required by
administration of any provision of the For more information, see Regulations section 1.355-5(a) on or
Internal Revenue Code. Usually, Regulations section 1.6011-4. Also with its return for the year of the
records that support an item of see the Instructions for Form 8886. distribution. A significant distributee
income, deduction, or credit on the (as defined in Regulations section
return must be kept for 3 years from Penalties. The corporation may
1.355-5(c)) that receives stock or
the date the return is due or filed, have to pay a penalty if it is required to
securities of a controlled corporation
whichever is later. Keep records that disclose a reportable transaction
must include the statement required
verify the corporation's basis in under section 6011 and fails to
by Regulations section 1.355-5(b) on
property for as long as they are properly complete and file Form 8886.
or with its return for the year of receipt.
needed to figure the basis of the Penalties also apply under section
If the distributing or distributee
original or replacement property. 6707A if the corporation fails to file
corporation is a CFC, each U.S.
Form 8886 with its corporate return,
shareholder (within the meaning of
The corporation should keep fails to provide a copy of Form 8886 to
section 951(b)) must include the
copies of all filed returns. They help in the Office of Tax Shelter Analysis
statement on or with its return.
preparing future and amended returns (OTSA), or files a form that fails to
and in the calculation of earnings and include all the information required (or Dual consolidated losses. If a
profits. includes incorrect information). Other domestic corporation incurs a dual
penalties, such as an consolidated loss (as defined in
accuracy-related penalty under Regulations section 1.1503-2(c)(5)),
section 6662A, also apply. See the the corporation (or consolidated
Instructions for Form 8886 for details group) may need to attach an elective
on these and other penalties. relief agreement and/or an annual

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certification as provided in office or place of business. Include tentative LICTI of members that are
Regulations section 1.1503-2(g)(2). the suite, room, or other unit number life insurance companies.
after the street address. If the post
Election to reduce basis under Corporations filing a consolidated
office does not deliver mail to the
section 362(e)(2)(C). If property is return must check box 1 of item A and
street address and the corporation
transferred to a corporation subject to attach Form 851, Affiliations
has a P.O. box, show the box number
section 362(e)(2), the transferor and Schedule, and other supporting
instead.
the transferee corporation may elect, statements to the return. Also, for the
under section 362(e)(2)(C), to reduce Note. Do not use the address of the first year a subsidiary corporation is
the transferor's basis in the stock registered agent for the state in which being included in a consolidated
received instead of reducing the the corporation is incorporated. For return, attach Form 1122,
transferee corporation's basis in the example, if a business is incorporated Authorization and Consent of
property transferred. Once made, the in Delaware or Nevada and the Subsidiary Corporation To Be
election is irrevocable. For more corporation's principal office is located Included in a Consolidated Income
information, see section 362(e)(2) and in Little Rock, Arkansas, the Tax Return, to the parent's
Regulations section 1.362-4. If an corporation should enter the Little consolidated return. Attach a separate
election is made, a statement must be Rock address. Form 1122 for each new subsidiary
filed in accordance with Regulations being included in the consolidated
section 1.362-4(d)(3). If the corporation receives its mail return.
in care of a third party (such as an
Form 8975, Country-by-Country File supporting statements for each
accountant or an attorney), enter on
Report. Certain U.S. persons that are corporation included in the
the street address line “C/O” followed
the ultimate parent entity of a U.S. consolidated return. Do not use Form
by the third party's name and street
multinational enterprise group with 1120-L as a substitute for the
address or P.O. box.
annual revenue for the preceding supporting statement. On the
reporting period of $850 million or If the corporation has a foreign supporting statement, use columns to
more are required to file Form 8975. address, include the city or town, show the following, both before and
Form 8975 and Schedule A (Form state or province, country, and foreign after adjustments.
8975) must be filed with the income postal code. Do not abbreviate the 1. Items of gross income and
tax return of the ultimate parent entity country name. Follow the country's deductions.
of a U.S. multinational enterprise practice for entering the name of the
group for the tax year in or within state or province and postal code. 2. A computation of taxable
which the reporting period covered by income.
Form 8975 ends. For more Item A. Identifying 3. Balance sheets as of the
information, see Form 8975, Information beginning and end of the tax year.
Schedule A (Form 8975), and the 4. A reconciliation of income per
Instructions for Form 8975 and Consolidated Return books with income per return.
Schedule A (Form 8975). If an affiliated group of corporations 5. A reconciliation of retained
Additional forms and statements. includes one or more domestic life earnings.
See Pub. 542, Corporations, for a list insurance companies taxed under
of other forms and statements a section 801, the common parent may Enter on Form 1120-L the totals for
corporation may need to file in elect to treat those life insurance each item of income, gain, loss,
addition to the forms and statements companies as includible corporations. expense, or deduction, net of
discussed throughout these The life insurance companies must eliminating entries for intercompany
instructions. have been members of the group for transactions between corporations
the 5 tax years immediately preceding within the consolidated group. Attach
the tax year for which the election is consolidated balance sheets and a
Specific Instructions made. See section 1504(c)(2) and reconciliation of consolidated retained
Regulations section 1.1502-47(b)(12). earnings.
Period Covered
Section 843 requires all insurance Note. The eligibility requirements (the For more information on
companies to file on a calendar year tacking rule) for a life insurance consolidated returns, see the
basis, unless they join in the filing of a company to join in the filing of a regulations under section 1502.
consolidated return. If a consolidated consolidated return with nonlife Life-Nonlife Consolidated
return is filed, indicate the period companies are covered in Return
covered on the parent corporation's Regulations section 1.1502-47(b)(12)
return. (v). If the corporation is the common
parent of a life-nonlife consolidated
Note. If an election under section group, check boxes 1 and 2 of item A.
Name and Address
1504(c)(2) is in effect for an affiliated Filing requirements. The common
Enter the corporation's true name (as group for the tax year, all items of parent of a life-nonlife consolidated
set forth in the charter or other legal members of the group that are not life group must satisfy the following filing
document creating it), address, and insurance companies must not be requirements.
EIN on the appropriate lines. Enter the taken into account in figuring the • File the applicable consolidated
address of the corporation's principal
corporate income tax return: a Form

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1120-L, where the common parent is Schedule M-3 (Form 1120-L) for more of a trade or business in the United
a life insurance company; a Form details. States, or
1120-PC, where the common parent 2. Section 953(d) to be treated as
is an insurance company, other than a Note. If you do not file Schedule M-3
a domestic corporation.
life insurance company; or a Form (Form 1120-L) with Form 1120-L, see
1120, where the common parent is Reconciliation under Statements, Generally, a foreign corporation
any other type of corporation. earlier. making either election must file its
• Indicate clearly on the face of the return by sending it to:
return that the corporate tax return is a Item B. Employer
Internal Revenue Service Center
life-nonlife return. This requirement is Identification Number
P.O. Box 409101
satisfied by checking box 2 of item A (EIN) Ogden, UT 84409
on page 1.
Enter the corporation's EIN. If the
• Show any setoffs required by
corporation does not have an EIN, it
paragraphs (e), (h), and (j) of See Notice 87-50, 1987-2 C.B. 357;
must apply for one. An EIN can be
Regulations section 1.1502-47. and Rev. Proc. 2003-47, 2003-28
applied for in one of the following
• Report separately the nonlife I.R.B. 55, for the procedural rules,
ways.
consolidated taxable income or loss, election statement formats, and filing
• Online—Click on the Employer ID
determined under Regulations section addresses for making the respective
Numbers link at IRS.gov/EIN. The EIN
1.1502-47(f), on a Form 1120 or elections under section 953(c)(3)(C)
is issued immediately once the
1120-PC (whether filed by the or section 953(d).
application information is validated.
common parent or as an attachment
• By faxing or mailing Form SS-4, Note. Once either election is made, it
to the consolidated return), for all
Application for Employer Identification will apply to the tax year for which it
nonlife members of the consolidated
Number. was made and all subsequent tax
group.
• Report separately the consolidated Corporations located in the years unless revoked with the consent
of the IRS. Also, any loss of a foreign
LICTI (as defined by Regulations ! United States or U.S. corporation electing to be treated as a
section 1.1502-47(g)(1)), determined CAUTION possessions can use the
under Regulations section 1.1502-11, online application. Foreign domestic insurance company under
on a Form 1120-L (whether filed by corporations should call section 953(d) will be treated as a
the common parent or as an 1-267-941-1099 (not a toll-free dual-consolidated loss and may not
attachment to the consolidated number) for more information on be used to reduce the taxable income
return), for all life members of the obtaining an EIN. See the Instructions of any other member of the affiliated
consolidated group. for Form SS-4. group for the tax year or any other tax
year.
Note. If a nonlife insurance company EIN applied for, but not received. If
Note. If a section 953(d) election is
is a member of an affiliated group, file the corporation has not received its
made, include the additional tax
Form 1120-PC as an attachment to EIN by the time the return is due,
required to be paid on line 9 of
the consolidated return in addition to enter “Applied For” and the date the
Schedule K. On the dotted line to the
the supporting statements discussed corporation applied in the space for
left of line 9 of Schedule K, write
earlier under Consolidated Return. the EIN. However, if the corporation is
“Section 953(d)” and the amount.
Across the top of page 1 of Form filing its return electronically, an EIN is
Attach a statement showing the
1120-PC, write “Supporting Statement required at the time the return is filed.
computation. See section 953(d) for
to Consolidated Returns.” An exception applies to subsidiaries
more details.
of corporations whose returns are
Schedule M-3 (Form 1120-L) filed with the parent's electronically
A life insurance company with total filed consolidated Form 1120. These Item E. Final Return, Name
assets (non-consolidated or subsidiaries should enter “Applied Change, Address Change,
consolidated for all companies For” in the space for the EIN on their or Amended Return
included within a tax consolidation returns. The subsidiaries' returns are Indicate if this is a final return, name
group) of $10 million or more on the identified under the parent change, address change, or amended
last day of the tax year must file corporation's EIN. return by checking the appropriate
Schedule M-3 (Form 1120-L), Net box.
Income (Loss) Reconciliation for U.S. For more information, see the
Life Insurance Companies With Total Instructions for Form SS-4. Note. If a change of address or
Assets of $10 Million or More. A responsible party occurs after the
corporation filing Form 1120-L that is Item D. Section 953 return is filed, use Form 8822-B,
not required to file Schedule M-3 may Elections Change of Address or Responsible
voluntarily file Schedule M-3. Check the appropriate box if the Party—Business, to notify the IRS of
If you are filing Schedule M-3 corporation is a foreign corporation the new address.
(Form 1120-L), check box 3, of item and elects under:
A, “Schedule M-3 (Form 1120-L) 1. Section 953(c)(3)(C) to treat its
attached”at the top of page 1 of Form related person insurance income as
1120-L. See the Instructions for effectively connected with the conduct

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Line 4. Investment income. Enter • Gains and losses (including
Life Insurance Company the amount from Schedule B, line 6, ordinary gains and losses) from sales
Taxable Income less 50% of interest income of an or exchanges of assets used in a
Income employee stock ownership plan trade or business and from involuntary
(ESOP) loan made prior to August 20, conversions reported on Form 4797,
Except as otherwise provided in the 1996. Also, see Public Law 104-188, Sales of Business Property. Section
Internal Revenue Code, gross income section 1602, for binding contracts 818(b)(1) provides that, for section
includes all income from whatever and refinancing rules. 1231(a), “property used in a trade or
source derived. business” includes only the following.
Line 5. Capital gain net income.
1. Property used in carrying on an
Line 1. Enter gross premiums and Unless specifically excluded by
insurance business that is either real
other consideration received on section 1221, each asset held by a
or depreciable property held for more
insurance and annuity contracts less corporation (whether or not connected
than 1 year.
return premiums and premiums and with its business) is a "capital asset."
other consideration paid for indemnity 2. Timber, coal, and domestic iron
reinsurance. Under section 1221, capital asset
ore to which section 631 applies.
does not include the following.
Gross premiums and other For (1) above, property used in a
consideration includes advance 1. Assets that can be inventoried
premiums, deposits, fees, or property held mainly for sale to trade or business does not include
assessments, consideration received customers. property includible in inventory;
property held primarily for sale to
for assuming liabilities under contracts 2. Depreciable or real property
customers; or certain copyrights,
not issued by the corporation, and any used in the trade or business.
literary, musical, or artistic
amount treated as premiums received 3. Certain copyrights; or literary, compositions, letters, memoranda,
under section 808(e). musical, or artistic compositions. and similar property.
Return premiums include amounts 4. Accounts or notes receivable • The amount included in income
rebated or refunded due to policy acquired in the ordinary course of from Form 6478, Biofuel Producer
cancellations or incorrectly computed trade or business for services Credit, if applicable.
premiums, but do not include amounts rendered or from the sale of property • The amount included in income
returned to policyholders when such described in (1) above. from Form 8864, Biodiesel,
amounts are not fixed in the contract 5. Certain publications of the U.S. Renewable Diesel, or Sustainable
but instead depend on the Government. Aviation Fuels Credit.
corporation's experience or the • Ordinary income from trade or
management's discretion. Section 818(b) modifies the above business activities of a partnership
definition so only property used in
Line 3a. Decrease in reserves un- from Schedule K-1 (Form 1065),
carrying on an insurance business will
der section 807(f). If the amount of Partner's Share of Income,
be considered as “depreciable or real
any item referred to in section 807(c) Deductions, Credits, etc. Do not offset
property used in the corporation's
decreased as a result of a change in ordinary losses against ordinary
trade or business.” For life insurance
the basis used to determine that item, income. Instead, include the losses on
companies, gains or losses from the
then enter the section 807(f) line 18. Show the partnership's name,
sale or exchange of depreciable
prescribed portion of the change that address, and EIN on a separate
assets of any business other than an
must be included in life insurance statement attached to this return. If
insurance business will be treated as
company gross income (LICGI). the amount entered is from more than
gains or losses from the sale or one partnership, identify the amount
Note. If a corporation no longer exchange of capital assets. from each partnership.
qualifies as a life insurance company, See section 818(c) and the related • Section 91 Transferred Loss
the balance of any adjustments under regulations for how to limit the gain Amount. Enter the transferred loss
section 807(f) must be taken into from the sale or exchange of any amount and identify the amount as
account in the last tax year the section 818(c) property. “Section 91 Transferred Loss Amount”
corporation is qualified to file Form required to be recognized under
1120-L. See section 807(f)(2). Note. Form 8949, Sales and Other section 91 resulting from a transfer of
Dispositions of Capital Assets, must substantially all the assets of a foreign
Line 3b. Income from Reserve be attached to Schedule D (Form branch (within the meaning of section
Transition Relief. If section 807(d) 1120), as required. 367(a)(3)(C), as in effect before its
(as amended by Public Law 115-97)
decreased the amount of the reserve Line 7. Other income. Enter any repeal) to a foreign corporation with
for any contract as of the close of the other taxable income, includible in respect to which you were a U.S.
tax year preceding the first tax year LICGI, not reported on lines 1 through shareholder immediately after the
beginning after 2017, enter the portion 6. List the type and amount of income transfer as other income. Under
of the change that must be included in on an attached statement. If the life section 91(d), transferred loss
LICGI as prescribed by section insurance company has only one item amounts recognized are treated as
13517(c)(3) of Public Law 115-97. of other income, describe it in derived from sources within the
See Rev. Proc. 2019-34, 2019-35 parentheses on line 7. The following United States.
I.R.B. 669, for more information. are examples of other income to • Part or all of the proceeds received
report on line 7. from certain corporate-owned life

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insurance contracts issued after section 263A. A small business in which the active trade or business
August 17, 2006. Corporations that taxpayer that wants to discontinue begins. However, for start-up or
own one or more employer-owned life capitalizing costs under section 263A organizational costs paid or incurred
insurance contracts issued after must change its method of before September 9, 2008, the
August 17, 2006, must file Form 8925, accounting. See section 263A(i) and corporation is required to attach a
Report of Employer-Owned Life Regulations section 1.263A-1(j). Also, statement to its return to elect to
Insurance Contracts. See Form 8925. see Change in accounting method, deduct such costs.
• Income from cancellation of debt earlier. For more details including special
(COD) for the repurchase of a debt For more information on the rules for costs paid or incurred before
instrument for less than its adjusted uniform capitalization rules, see Pub. September 9, 2008, see the
issue price. 538. Also, see Regulations sections Instructions for Form 4562,
• The corporation's share of the 1.263A-1 through 1.263A-3. Depreciation and Amortization. Also,
following income from Form 8621, see Pub. 535, Business Expenses.
Information Return by a Shareholder Transactions between related tax-
of a Passive Foreign Investment payers. Generally, an accrual basis If the corporation timely filed its
Company or Qualified Electing Fund. taxpayer can only deduct business return for the year without making an
expenses and interest owed to a election, it can still make an election
See Form 8621 and the by filing an amended return within 6
related party in the year the payment
Instructions for Form 8621 for details. months of the due date of the return
is included in the income of the
1. Ordinary earnings of a qualified related party. See sections 163(e)(3) (excluding extensions). Clearly
electing fund (QEF). and 267 for limitations on deductions indicate the election on the amended
2. Gain or loss from marking for unpaid interest and expenses. return and write “Filed pursuant to
passive foreign investment company section 301.9100-2” at the top of the
Limitations on business interest
(PFIC) stock to market. amended return. File the amended
expense. Business interest expense return at the same address the
3. Gain or loss from sale or other may be limited. See section 163(j) and corporation filed its original return.
disposition of section 1296 stock. Form 8990, Limitation on Business The election applies when figuring
4. Excess distributions from a Interest Expense Under Section taxable income for the current tax year
section 1291 fund allocated to the 163(j). Also, see the instructions for and all subsequent years.
current year and pre-PFIC years, if line line 15a and Schedule M,
The corporation can choose to
any. Question 17, later.
forgo the elections above by
• The amount of payroll tax credit Section 291 limitations. affirmatively electing to capitalize its
taken by an employer on its 2022 Corporations may be required to start-up or organizational costs on its
employment tax returns (Forms 941, adjust certain deductions. See section income tax return filed by the due date
943, and 944) for qualified paid sick 291 to determine the amount of the (including extensions) for the tax year
leave and qualified paid family leave adjustment. in which the active trade or business
under the FFCRA and the ARP (both
the nonrefundable and refundable Golden parachute payments. A begins.
portions). The corporation must portion of the payments made by a
Note. The election to either amortize
include the full amount of the credit for corporation to key personnel that
or capitalize start-up costs is
qualified sick and family leave wages exceeds their usual compensation
irrevocable and applies to all start-up
in gross income for the tax year that may not be deductible. This occurs
costs that are related to the trade or
includes the last day of any calendar when the corporation has an
business.
quarter in which the credit is allowed. agreement (golden parachute) with
these key employees to pay them Report the deductible amount of
Note. A credit is available only if the these excess amounts if control of the start-up and organizational costs and
leave was taken after March 31, 2020, corporation changes. See section any amortization on line 18. For
and before October 1, 2021, and only 280G and Regulations section amortization that begins during the
after the qualified leave wages were 1.280G-1. current year, complete and attach
paid, which might under certain Form 4562.
Business start-up and organiza-
circumstances not occur until a
tional costs. A corporation can elect
quarter after September 30, 2021, Reducing certain expenses for
to deduct a limited amount of start-up
including quarters in 2022. which credits are allowable. If the
and organizational costs it paid or corporation claims certain credits, it
Deductions incurred. Any remaining costs must may need to reduce the otherwise
generally be amortized over a allowable deductions for expenses
Limitations on Deductions 180-month period. See sections 195 used to figure the credit. This applies
and 248 and the related regulations. to credits such as the following.
Section 263A uniform capitaliza- • Employment credits. See
tion rules. The uniform capitalization Time for making the election.
rules of section 263A require The corporation generally elects to Employment credits, later.
corporations to capitalize certain deduct start-up or organizational costs • Credit for increasing research
costs. by claiming the deduction on its activities (Form 6765).
income tax return filed by the due date • Orphan drug credit (Form 8820).
A small business taxpayer is not (including extensions) for the tax year
required to capitalize costs under

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• Disabled access credit (Form may be recovered on those losses in these amounts in income on page 1,
8826). future years. line 1.
• Employer credit for social security
Under section 807(c), the Line 13. Assumption by another
and Medicare taxes paid on certain
TIP amount of unpaid losses person of liabilities under insur-
employee tips (Form 8846).
(other than losses on life ance, etc., contracts. Enter the total
• Credit for small employer pension
insurance contracts) must be the consideration paid by the corporation
plan start-up costs (Form 8881).
amount of the discounted unpaid to another person (other than for
• Credit for employer-provided
losses under section 846. See the indemnity reinsurance) for the
childcare facilities and services (Form
instructions for Schedule F, line 2, for assumption by that person of liabilities
8882).
more information on the discounting under insurance and annuity contracts
• Credit for small employer health
provisions. (including supplementary contracts).
insurance premiums (Form 8941).
Line 14. Dividends reimbursable
If the corporation has any of these Line 11a. Increase in reserves un-
by taxpayer. Enter the amount of
credits, figure the current year credit der section 807(f). If the amount of
policyholder dividends:
before figuring the deduction for any item referred to in section 807(c)
expenses on which the credit is increased as a result of a change in 1. Paid or accrued by another
based. If the corporation capitalized the basis used to determine that item, insurance company for policies this
any costs on which it figured the then enter the section 807(f) corporation has reinsured, and
credit, it may need to reduce the prescribed portion of the change that 2. That are reimbursable by the
amount capitalized by the credit is a deduction in computing LICTI. corporation under the terms of the
attributable to these costs. reinsurance contract.
Any wages that are used to Note. If a corporation ceases to
calculate the tax credits for sick leave qualify as a life insurance company, Line 15a. Interest. Enter all interest
or family leave related to coronavirus the balance of any adjustments under paid or accrued during the tax year.
cannot be used again to figure the section 807(f) must be taken into No deduction is allowed under section
credit for family and medical leave. account in the last year that the 163 for interest on the items
corporation is qualified to file Form described in section 807(c). Also, do
See the instructions for the form 1120-L. See section 807(f)(2). not include interest included on
used to figure the applicable credit for Schedule G, line 9 (General
more information. Line 11b. Deduction from Reserve
Transition Relief. If section 807(d) deductions).
Limitations on deductions related (as amended by Public Law 115-97) Limitations. The deduction for
to property leased to tax-exempt increased the amount of the reserve interest is limited when the
entities. If a corporation leases for any contract as of the close of the corporation is a policyholder or
property to a governmental or other tax year preceding the first tax year beneficiary with respect to a life
tax-exempt entity, the corporation beginning after 2017, enter the portion insurance, endowment, or annuity
cannot claim deductions related to the of the change that is a deduction in contract issued after June 8, 1997.
property to the extent that they computing LICTI as prescribed by For details, see section 264(f). Attach
exceed the corporation's income from section 13517(c)(3) of Public Law a statement showing the computation
the lease payments. This disallowed 115-97. See Rev. Proc. 2019-34, of the deduction.
tax-exempt use loss can be carried 2019-35 I.R.B. 669, for more
Business interest expense is any
over to the next tax year and treated information.
as a deduction with respect to the interest paid or accrued on
property for that tax year. See section Line 12. Deductible policyholder indebtedness properly allocable to a
470(d) for more details and dividends. A policyholder dividend is trade or business. Under section
exceptions. any dividend or similar distribution to 163(j), business interest expense is
policyholders in their capacity as such generally limited to the sum of
Line 9. Death benefits, etc. Enter all and includes any amount paid or business interest income, 30% of the
claims and benefits accrued and credited (including an increase in adjusted taxable income, and floor
losses incurred (whether or not benefits) where the amount is not plan financing interest. The amount of
ascertained) during the year on fixed in the contract but depends on any business expense that is not
insurance and annuity contracts. the corporation’s experience or allowed as a deduction for the tax
Losses incurred (whether or not management’s discretion. Enter on year is carried forward to the following
ascertained) include a reasonable line 12 the amount of policyholder year. If section 163(j) applies, use
estimate of both losses incurred but dividends paid or credited during the Form 8990 to figure the amount of
not reported and of reported losses, tax year. Also, under section 808(e), business expense the corporation can
when the amount of the losses cannot any policyholder dividend that (a) deduct for the current tax year and the
be determined by the end of the tax increases either the cash surrender amount that can be carried forward to
year. Losses incurred must be value of the contract or other benefits the next year. See the Instructions for
adjusted to take into account payable under the contract, or (b) Form 8990. Also see Schedule M,
recoveries (for example, for reduces the premium otherwise Question 17, later.
reinsurance) for those losses together required to be paid, is treated as paid
with estimates of those recoveries that to and returned by the policyholder to Consolidated groups. The
limitation in section 163(j)(1) on the
the company as a premium. Include
amount allowed as a deduction for

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business interest applies at the level participants or their beneficiaries no 3. Percentage of time devoted to
of the consolidated group. later than 90 days after the end of the business.
plan year in which the dividends are
Line 15b. Less tax-exempt interest 4. Amount of compensation.
paid;
expense. Enter interest paid or If a consolidated return is filed,
accrued on indebtedness incurred or 3. At the election of such
each member of an affiliated group
continued to purchase or carry participants or their beneficiaries (a)
must furnish this information.
obligations, the interest on which is payable as provided under (1) or (2)
wholly tax exempt. See section 265(b) above, or (b) paid to the plan and Disallowance of deduction for em-
for special rules and exceptions for reinvested in qualifying employer ployee compensation in excess of
financial institutions. Also see section securities; or $1 million. Publicly held corporations
265(b)(7) for a de minimis exception 4. Used to make payments on a cannot deduct compensation to a
for financial institutions for certain loan described in section 404(a)(9). covered employee to the extent that
tax-exempt bonds issued in 2009 and the compensation exceeds $1 million.
2010. See section 404(k) for more details Generally, a covered employee is:
and the limitation on certain • The principal executive officer of
Line 18. Other deductions. Attach a dividends. the corporation (or an individual acting
statement, listing by type and amount, • Depreciation or amortization (attach in that capacity) as of the end of the
all allowable deductions in computing Form 4562, if required). Attach Form tax year, or
LICTI (including the amortization of T (Timber), Forest Activities • An employee whose total
premiums under section 811(b)) not Schedule, if a deduction for depletion compensation must be reported to
included on lines 9 through 16. of timber is taken. Foreign intangible shareholders under the Securities
Examples of other deductions may drilling costs and foreign exploration Exchange Act of 1934 because the
include the following. See Pub. 535 and development costs must either be employee is among the three highest
for details on other deductions that added to the corporation's basis for compensated officers for that tax year
may apply to corporations. cost depletion purposes or be (other than the principal executive
• Certain business start-up and deducted ratably over a 10-year officer).
organizational costs (discuss earlier period. See sections 263(i), 616, and
For this purpose, compensation
under Limitations on Deductions). 617.
does not include the following.
• Legal and professional fees. Do not deduct the following. • Income from certain employee
• Supplies used and consumed in the trusts, annuity plans, or pensions.
• Amounts paid, or incurred to, or at
business. • Any benefit paid to an employee
the direction of, a government or
• Travel, meals, and entertainment that is excluded from the employee's
governmental entity for the violation,
expenses. Special rules apply income.
or investigation, or inquiry into the
(discussed later). potential violation, of a law. The deduction limit does not apply
• Utilities.
• Lobbying expenses. However, see
• Ordinary losses from trade or to:
exceptions (discussed later).
business activities of a partnership • Commissions based on individual
from Schedule K-1 (Form 1065). Do Also, include on line 18 the performance;
not offset ordinary income against following. • Qualified performance-based
compensation; and
ordinary losses. Instead, include the Compensation of officers. Enter
• Income payable under a written
income on line 7. Show the deductible officers' compensation.
binding contract in effect on February
partnership's name, address, and EIN See Employment credits, later, for a
17, 1993.
on a separate statement attached to list of employment credits that may
this return. If the amount is from more reduce your deduction for officers' The $1 million limit is reduced by
than one partnership, identify the compensation. Do not include amounts disallowed as excess
amount from each partnership. compensation deductible elsewhere parachute payments under section
• Any extraterritorial income on the return, such as elective 280G.
exclusion (from Form 8873, contributions to a section 401(k) cash For details, see section 162(m) and
Extraterritorial Income Exclusion). or deferred arrangement or amounts Regulations section 1.162-27. Also,
• Any applicable deduction under contributed under a salary reduction see Notice 2007-49, 2007-25 I.R.B.
section 179D for the cost of energy SEP agreement or a SIMPLE IRA 1429.
efficient commercial building property plan.
Limitations on tax benefits for ex-
placed in service during the tax year. Include only the deductible part of ecutive compensation under the
Complete and attach new Form 7205. each officer's compensation on Treasury Troubled Relief Program
• Dividends paid in cash on stock line 18. (See Disallowance of (TARP). The $1 million
held by an ESOP. However, a deduction for employee compensation limit is reduced to
deduction can only be taken for the compensation in excess of $1 million, $500,000 for executive remuneration
dividends above if, according to the later.) Attach a statement for and deferred deduction executive
plan, the dividends are: compensation of all officers using the remuneration paid to covered
1. Paid in cash directly to the plan following columns. executives by any entity that receives
participants or beneficiaries; 1. Name of officer. or has received financial assistance
2. Paid to the plan, which 2. Social security number. under the TARP. The limit applies for
distributes them in cash to the plan each period in which obligations

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arising from financial assistance Limitation on tax benefits for re- Form 5500, Annual Return Report of
under the TARP remain outstanding. muneration under the Patient Pro- Employee Benefit Plan.
The $500,000 is reduced by any tection and Affordable Care Act.
Form 5500-SF, Short Form Annual
amounts disallowed as excess The $1 million compensation limit is
Return/Report of Small Employee
parachute payments. See section reduced to $500,000 for remuneration
Benefit Plan, instead of Form 5500,
162(m)(5) for definitions and other for services provided by individuals for
generally if under 100 participants at
special rules. Also, see Notice or on behalf of certain health
the beginning of the plan year.
2008-94, 2008-44 I.R.B. 1070, for insurance providers in tax years
additional guidance. beginning after December 31, 2009. Note. Form 5500 and Form 5500-SF
In addition, any excess parachute The $500,000 limitation applies to must be filed electronically under the
payments made to a covered remuneration that is deductible in the computerized ERISA Filing
executive by an applicable employer tax year during which the services Acceptance System (EFAST2). For
participating in a TARP are not were performed and remuneration for more information, see the EFAST2
deductible as compensation if the services during the year that is website at www.EFAST.dol.gov.
payments are made because of a deductible in a future tax year (called
severance from employment during deferred deduction remuneration). Form 5500-EZ, Annual Return of A
an applicable year. For this purpose, a The $500,000 limitation is reduced by One-Participant (Owners/Partners
parachute payment is any payment to any amounts disallowed as excess and Their Spouses) Retirement Plan
a senior executive officer for parachute payments. See section or A Foreign Plan. File this form for a
departure from a company for any 162(m)(6) and Regulations section plan that only covers the owner (or the
reason, except for payments for 1.162-31 for definitions and other owner and their spouse) but only if the
services performed or benefits special rules. Also, see Notice owner (or the owner and their spouse)
accrued. These limits do not apply to 2011-2, 2011-2 I.R.B. 260. owns the entire business.
a payment already treated as a Charitable contributions. Enter
Employment credits. If the
parachute payment. See section contributions or gifts actually paid
corporation claims a credit on any of
280G(e) and Notice 2008-94. within the tax year to or for the use of
the forms listed below, it may need to
Salaries and wages. Include the reduce its deduction for salaries and charitable and governmental
total salaries and wages paid for the wages. See the applicable form(s). organizations described in section
tax year. Do not include salaries and • Form 5884, Work Opportunity 170(c) and any unused contributions
wages deductible elsewhere on the Credit. carried over from prior years. Special
return, such as amounts included in • Form 8844, Empowerment Zone rules and limits apply to contributions
officers’ compensation, elective Employment Credit, if applicable. to organizations conducting lobbying
contributions to a section 401(k) cash • Form 8845, Indian Employment activities. See section 170(f)(9).
or deferred arrangement, or amounts Credit, if applicable. Life insurance companies reporting
contributed under a salary reduction • Form 8882, Credit for LICTI on the accrual method can elect
SEP agreement or a SIMPLE IRA Employer-Provided Childcare to treat as paid during the tax year any
plan. Facilities and Services. contributions paid by the due date for
If the corporation provided taxable • Form 8932, Credit for Employer filing the corporations’s tax return (not
fringe benefits to its employees, such Differential Wage Payments. including extensions), if the
as personal use of a car, do not • Form 8994, Employer Credit for contributions were authorized by the
deduct as wages the amount Paid Family and Medical Leave. board of directors during the tax year.
Attach a declaration to the return
allocated for depreciation and other Pension, profit-sharing, etc., stating that the resolution authorizing
expenses claimed under Other plans. Enter the deduction for the contributions was adopted by the
Deductions on line 18. contributions to qualified pension, board of directors during the tax year.
If the corporation claims a profit-sharing, or other funded The declaration must include the date
deferred compensation plans. the resolution was adopted. See
CAUTION incurred, it may need to
! credit for any wages paid or Employers who maintain such a plan Regulations section 1.170A-11.
reduce any corresponding deduction must generally file one of the forms
for officers’ compensation and listed below unless exempt from filing Limitation on deduction. The
salaries and wages. See Reducing under regulations or other applicable total amount claimed cannot be more
certain expenses for which credits are guidance, even if the plan is not a than 10% of LICTI computed without
allowable, earlier. qualified plan under the Internal regard to the following.
Revenue Code. The filing requirement • Any deduction for contributions.
Also, reduce the amounts applies even if the corporation does • The deduction for policyholder
not claim a deduction for the current dividends.
! deducted as compensation of
CAUTION officers and salaries and tax year. There are penalties for • The deduction for dividends
wages by the nonrefundable and failure to file these forms on time and received.
refundable portions of the CARES Act for overstating the pension plan • Any net operating loss (NOL)
and the ARP employee retention deduction. See sections 6652(e) and carryback to the tax year under
credit claimed on the corporation’s 6662(f). Also, see the instructions for section 172.
employment tax return(s). the applicable form. • Any capital loss carryback to the tax
year under section 1212(a)(1).

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Carryover. Charitable historic district. See section 170(h) meals consumed by individuals
contributions over the 10% limitation and Pub. 526, Charitable subject to the hours of service limits of
(or the 25% limitation, if elected; see Contributions. For special rules the Department of Transportation.
below) cannot be deducted for the tax applicable to certain qualified
Qualified transportation fringes
year but may be carried over to the conservation contributions made by
(QTFs). Generally, no deduction is
next 5 tax years. Native corporations, see section
allowed under section 274(a)(4) for
170(b)(2)(C).
A contributions carryover is not QTFs provided by employers to their
allowed, however, to the extent that it Other special rules. See section employees. QTFs are defined in
increases an NOL. 170 for special rules, limitations, and section 132(f)(1) and include:
requirements. • Transportation in a commuter
Cash contributions. For highway vehicle between the
contributions of cash, check, or other Travel, meals, and entertainment.
monetary gifts (regardless of the Subject to limitations and restrictions employee's residence and place of
amount), the corporation must discussed below, a corporation can employment,
maintain a bank record, or a receipt, deduct ordinary and necessary travel, • Any transit pass, and
letter, or other written communication meal, and nonentertainment • Qualified parking.
from the donee organization indicating expenses paid or incurred in its trade See section 274; Pub. 15-B,
the name of the organization, the date or business. Generally, entertainment Employer’s Tax Guide to Fringe
of the contribution, and the amount of expenses, membership dues, and Benefits; and Pub. 535 for details.
the contribution. facilities used in connection with these
Membership dues. The
activities cannot be deducted. In
corporation can deduct amounts paid
Contributions of $250 or more. A addition, no deduction is generally
or incurred for membership dues in
corporation can deduct a contribution allowed for qualified transportation
civic or public service organizations,
of $250 or more only if it gets a written fringe benefits. Special rules apply to
professional organizations (such as
acknowledgment from the donee deductions for gifts, luxury water
bar and medical associations),
organization that shows the amount of travel, and convention expenses. See
business leagues, trade associations,
cash contributed, describes any section 274 and Pub. 463, Travel,
chambers of commerce, boards of
property contributed, and either gives Gift, and Car Expenses.
a description and a good faith trade, and real estate boards.
estimate of the value of any goods or Travel. The corporation cannot However, no deduction is allowed if a
services provided in return for the deduct travel expenses of any principal purpose of the organization
contribution or states that no goods or individual accompanying a corporate is to entertain or provide
services were provided in return for officer or employee, including a entertainment facilities for members
the contribution. The acknowledgment spouse or dependent of the officer or or their guests. In addition,
must be obtained by the due date employee, unless: corporations cannot deduct
(including extensions) of the • That individual is an employee of membership dues in any club
corporation's return, or, if earlier, the the corporation, and organized for business, pleasure,
date the return is filed. Do not attach • Their travel is for a bona fide recreation, or other social purpose.
the acknowledgment to the tax return, business purpose and would This includes country clubs, golf and
but keep it with the corporation's otherwise be deductible by that athletic clubs, airline and hotel clubs,
records. individual. and clubs operated to provide meals
under conditions favorable to
Contributions of property other Meals. Generally, the corporation business discussion.
than cash. If a corporation can deduct only 50% of the amount
contributes property other than cash otherwise allowable for Entertainment facilities.
and claims over a $500 deduction for non-entertainment-related meal Generally, the corporation cannot
the property, it must generally attach a expenses paid or incurred in its trade deduct an expense paid or incurred
statement to the return describing the or business. However, the corporation for a facility (such as a yacht or
kind of property contributed and the can deduct 100% of business meal hunting lodge) used for an activity
method used to determine its fair expenses if the meals are food and usually considered entertainment,
market value (FMV). Attach Form beverages provided by a restaurant. amusement, or recreation.
8283, Noncash Charitable This applies only to amounts paid or
Amounts treated as
Contributions, to the return for incurred after December 31, 2020,
compensation. Generally, the
contributions of property (other than and before January 1, 2023.
corporation may be able to deduct
money) if the total claimed deduction Meals not separately stated from otherwise nondeductible
for all property contributed was more entertainment are generally not entertainment, amusement, or
than $5,000. Special rules apply to the deductible. In addition (subject to recreation expenses if the amounts
contribution of certain property. See exceptions under section 274(k)(2)): are treated as compensation to the
the Instructions for Form 8283. • Meals must not be lavish or recipient and reported on Form W-2,
Qualified conservation contribu- extravagant, and Wage and Tax Statement, for an
tions. Special rules apply to qualified • An employee of the corporation employee or on Form 1099-NEC,
conservation contributions, including must be present at the meal. Nonemployee Compensation, for an
contributions of certain easements on See section 274(n)(3) for a special independent contractor.
buildings located in a registered rule that applies to expenses for

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However, if the recipient is an Line 21b. NOL deduction. The NOL Law 115-97 requires a one-eighth per
officer, a director, a beneficial owner deduction is the lesser of the year phased inclusion of any
(directly or indirectly), or other aggregate of the NOL carryovers to December 31, 2017, balance of the
“specified individual” (as defined in the tax year, plus the NOL carrybacks policyholders surplus account starting
section 274(e)(2)(B) and Regulations to the tax year. If this deduction is in 2018. This amount cannot be
section 1.274-9(b)), special rules taken, show its computation on an reduced by an NOL.
apply. attached statement. Generally, a life Line 25. Total taxable income. The
Fines or similar penalties. insurance company can carry over an total taxable income reported on
Generally, no deduction is allowed for NOL to each tax year following the tax line 25 cannot be less than line 24 of
fines or similar penalties paid, or year of the loss. After applying the the Form 1120-L.
incurred to, or at the direction of, a NOL to the first tax year to which it
Also, line 25 cannot be less than
government or governmental entity for may be carried, the portion of the loss
the largest of the following amounts.
violating any law, or for the the corporation may carry to each of
• The inversion gain of the
investigation or inquiry into the the remaining tax years is the excess,
corporation for the tax year, if the
potential violation of a law, except: if any, of the loss over the sum used
corporation is an expatriated entity or
• Amounts that constitute restitution as an NOL deduction in the carryover a partner in an expatriated entity. For
or remediation of property, year. See section 172 for special details, see section 7874.
• Amounts paid to come into rules, limitations, and definitions
• The sum of the corporation's
compliance with the law, pertaining to the NOL deduction and
excess inclusions from Schedule Q
• Amounts paid or incurred as the carryover.
(Form 1066), line 2c, and the
result of certain court orders or If an ownership change (described corporation's taxable income
agreements in which no government in section 382(g)) occurs, the amount determined solely with respect to its
or specified nongovernmental agency of the taxable income of a loss ownership and high-yield interests in
is a party, and corporation that may be offset by the FASITs. For details, see sections
• Amounts paid or incurred for taxes pre-change loss carryovers may be 860E(a) and 860J (repealed).
due. limited. (See section 382 and the
No deduction is allowed unless the related regulations.) A loss Line 27. Reserved for future use.
amounts are specifically identified in corporation must include the Tax and Payments
the order or agreement and the information statement as provided in
corporation establishes that the Regulations section 1.382-11(a), with Line 28c. 2022 estimated tax pay-
amounts were paid for that purpose. its income tax return for each tax year ments. Enter any estimated tax
Also, any amount paid or incurred as that it is a loss corporation in which an payments the corporation made for
reimbursement to the government for ownership shift, equity structures shift, the tax year.
the costs of any investigation or or other transaction described in Line 28d. Overpaid estimated tax.
litigation are not eligible for the Temporary Regulations section If the corporation overpaid estimated
exceptions and are nondeductible. 1.382-2T(a)(2)(i) occurs. If the tax, it may be able to get a quick
See section 162(f). corporation makes the refund by filing Form 4466. The
closing-of-the-books election, see overpayment must be at least 10% of
Lobbying expenses. Generally, Regulations section 1.382-6(b). the corporation's expected income tax
lobbying expenses are not deductible.
These expenses include: The limitations under section 382 liability and at least $500. File Form
• Amounts paid or incurred in do not apply to certain ownership 4466 after the end of the corporation's
connection with influencing federal, changes after February 17, 2009, tax year, and no later than the due
state, or local legislation (but not made pursuant to a restructuring plan date for filing the corporation’s tax
amounts paid or incurred before under the Emergency Economic return. Form 4466 must be filed
December 22, 2017, in connection Stabilization Act of 2008. See section before the corporation files its tax
with local legislation); or 382(n). return. See the instructions for Form
• Amounts paid or incurred in For guidance in applying section 4466.
connection with any communication 382 to loss corporations whose Line 28e. Combine lines 28a through
with certain federal executive branch instruments were acquired by the 28d.
officials in an attempt to influence the Department of the Treasury under
Line 28g. Credits. Enter the
official actions or positions of the certain programs under the
applicable credit on line 28g.
officials. See Regulations section Emergency Economic Stabilization
1.162-29 for the definition of Act of 2008, see Notice 2010-2, Credit for tax paid on undistrib-
“influencing legislation.” 2010-2 I.R.B. 251. uted capital gains. Enter any credit
Dues and other similar amounts For more details on the NOL from Form 2439, Notice to
paid to certain tax-exempt deduction, see section 172 and the Shareholder of Undistributed
organizations may not be deductible. Instructions for Form 1139, Long-Term Capital Gains, for the
If certain in-house lobbying Corporation Application for Tentative corporation's share of the tax paid by
expenditures do not exceed $2,000, Refund. a regulated investment company
(RIC) or a real estate investment trust
they are deductible. Line 24. Phased inclusion of bal- (REIT) on undistributed long-term
ance of policyholders surplus ac- capital gains included in the
count. Section 13514(d) of Public

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corporation's income. Attach Form checking or savings account at any 854(b). The corporation should
2439 to Form 1120-L. U.S. bank or other financial institution receive a notice from the RIC
instead of having a check sent to the specifying the amount of dividends
Credit for federal tax on fuels.
corporation, complete Form 8302, that qualify for the deduction.
Enter the total income tax credit
Electronic Deposit of Tax Refund of
claimed on Form 4136, Credit for Report so-called dividends or
$1 Million or More, and attach it to the
Federal Tax Paid on Fuels. Attach earnings received from mutual
corporation's tax return.
Form 4136 to Form 1120-L. savings banks, etc., as interest. Do
not treat them as dividends.
Credit for tax on ozone-depleting
chemicals. Include on line 28g any Schedule A—Dividends, Line 2, column (a). Enter on line 2:
credit the corporation is claiming Inclusions, • Dividends (except those received
on debt-financed stock acquired after
under section 4682(g)(2) for tax on Dividends-Received
ozone-depleting chemicals. Enter July 18, 1984) that are received from
Deduction, and Other
“ODC” next to the entry space. 20%-or-more-owned domestic
Special Deductions corporations subject to income tax
Line 28h. U.S. income tax paid or For purposes of the 20% ownership and that are subject to the 65%
withheld at source. Enter the test on lines 1 through 7, the deduction under section 243(c), and
amount of any U.S. income tax paid or percentage of stock owned by the • Taxable distributions from an
withheld as reported on Form 1042-S, corporation is based on voting power IC-DISC or former DISC that are
Foreign Person's U.S. Source Income and value of the stock. Preferred considered eligible for the 65%
Subject to Withholding. stock described in section 1504(a)(4) deduction.
Line 28i. Reserved for future use. is not taken into account. Line 3, column (a). Enter the
Line 28j. Reserved for future use. Consolidated returns. Corporations following.
Line 28k. Total payments. Add the • Dividends received on certain
filing a consolidated return should see
Regulations sections 1.1502-13, debt-financed stock acquired after
amounts on lines 28e through 28h
1.1502-26, and 1.1502-27 before July 18, 1984, from domestic and
and enter the total on line 28k.
completing Schedule A. foreign corporations subject to income
Backup withholding. If the Corporations filing a consolidated tax that would otherwise be subject to
corporation had federal income tax return must not report as dividends on the dividends-received deduction
withheld from any payments it Schedule A any amounts received under section 243(a)(1), 243(c), or
received because, for example, it from corporations within the tax 245(a). Generally, debt-financed
failed to give the payer its correct EIN, consolidation group. Such dividends stock is stock that the corporation
include the amount withheld in the are eliminated in consolidation rather acquired by incurring a debt (for
total for line 28k. Write the amount than offset by the dividends-received example, it borrowed money to buy
withheld and the words “Backup deduction. the stock).
Withholding” in the blank space above • Dividends received from a RIC on
line 28k. Line 1, column (a). Enter dividends debt-financed stock. The amount of
(except those received on certain dividends eligible for the
Line 29. Estimated tax penalty. debt-financed stock acquired after dividends-received deduction is
Generally, the corporation does not July 18, 1984 (see section 246A)) that limited by section 854(b). The
have to file Form 2220 with its income are: corporation should receive a notice
tax return because the IRS will figure • Received from from the RIC specifying the amount of
the amount of any penalty and notify less-than-20%-owned domestic dividends that qualify for the
the corporation of any amount due. corporations subject to income tax, deduction.
However, see the Instructions for and
Form 2220 for circumstances where • Qualified for the 50% deduction Line 3, columns (b) and (c).
the corporation must file Form 2220 under section 243(a)(1). Dividends received on certain
even if it owes no penalty. debt-financed stock acquired after
Also include on line 1 the following. July 18, 1984, are not entitled to the
If Form 2220 is attached, check the • Taxable distributions from an full 50% or 65% dividends-received
box on line 29 and enter the amount interest charge domestic international deduction under section 243 or
of any penalty on that line. See sales corporation (IC-DISC) or former 245(a). The 50% or 65% deduction is
Estimated tax penalty, earlier. domestic interational sales reduced by a percentage that is
Line 30. Amount owed. If the corporation (DISC) that are related to the amount of debt incurred
corporation cannot pay the full amount designated as eligible for the 50% to acquire the stock. See section
of tax owed, it can apply for an deduction and certain dividends of 246A. Also, see section 245(a) before
installment agreement online. Go to Federal Home Loan Banks. See making this computation for an
IRS.gov/OPA for the latest section 246(a)(2). additional limitation that applies to
information. • Dividends (except those received certain dividends received from
on certain debt-financed stock
Line 32. Refunded electronic de- foreign corporations. Attach a
acquired after July 18, 1984) from a
posit of tax refund of $1 million or statement showing how the amount
RIC. The amount of dividends eligible
more. If the corporation is due a on line 3, column (c), was figured.
for the dividends-received deduction
refund of $1 million or more and wants
under section 243 is limited by section
it electronically deposited into its

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Line 4, column (a). Enter dividends     dividends” under section 805(a)(4)      dividends that do not qualify as 100% 
received on preferred stock of a        (C).                                    dividends, or (b) paid by a life 
less-than-20%-owned public utility        In general, the deduction under       insurance company.
that is subject to income tax and is    section 245(b) applies to dividends 
                                                                                Note. Certain dividends received by 
allowed the deduction provided in       paid out of the earnings and profits of 
                                                                                a foreign corporation are not subject 
section 247 (as affected by Public      a foreign corporation for a tax year 
                                                                                to proration. Attach a statement 
Law 113-295, Div. A, section 221(a)     during which:
                                                                                showing computations.
(41)(A), Dec. 19, 2014, 128 Stat.       • All of its outstanding stock is 
4043) for dividends paid.               directly or indirectly owned by the     Line 14, column(a).  Enter the 
                                        domestic corporation receiving the      foreign-source portion of dividends:
Line 5, column (a). Enter dividends 
received on preferred stock of a                                                • Received from specified 
                                        dividends, and
20%-or-more-owned public utility that   • All of its gross income from all      10%-owned foreign corporations (as 
                                        sources is effectively connected with   defined in section 245A(b)), including 
is subject to income tax and is allowed 
                                        the conduct of a trade or business      gain from the sale of stock of a foreign 
the deduction provided in section 247 
                                        within the United States.               corporation that is treated as a 
(as affected by Public Law 113-295, 
Div. A, section 221(a)(41)(A), Dec. 19,   Do not include dividends received     dividend under sections 1248(a) and 
2014, 128 Stat. 4043) for dividends     from a life insurance company.          (i); and
                                                                                • Qualify for the 100% deduction 
paid.                                     Also, include on line 8, column (a), 
                                                                                under section 245A(a).
Line 6, column (a). Enter the           dividends from FSCs that are 
U.S.-source portion of dividends that:  attributable to foreign trade income    Line 15, column (a). Enter foreign 
• Are received from                     and that are eligible for the 100%      dividends not reportable on line 3, 6, 
less-than-20%-owned foreign             deduction provided in section 245(c)    7, 8, or 14 of column (a).
corporations, and                       (1)(A).                                 • Include on line 15 any hybrid 
                                                                                dividends from a CFC. Hybrid 
• Qualify for the 50% deduction         Line 9, column (a).  Enter only those 
                                                                                dividends are generally dividends 
under section 245(a). To qualify for    dividends that qualify under section 
                                                                                received from a CFC that would 
the 50% deduction, the corporation      243(b) for the 100% 
                                                                                otherwise be reported on line 14 
must own at least 10% of the stock of   dividends-received deduction 
                                                                                except the CFC receives a deduction 
the foreign corporation by vote and     described in section 243(a)(3) but that 
                                                                                (or other tax benefit) with respect to 
value.                                  do not qualify as “100% dividends” 
                                                                                any income, war profits, or excess 
  Also include dividends received       under section 805(a)(4)(C). 
                                                                                profits taxes imposed by any foreign 
from a less-than-20%-owned foreign      Corporations taking this deduction are 
                                                                                country or possession of the United 
sales corporation (FSC) that:           subject to the provisions of section 
                                                                                States.
• Are attributable to income treated    1561. Do not include dividends 
                                                                                • Also, include on line 15 the 
as effectively connected with the       received from a life insurance 
                                                                                corporation’s share of distributions 
conduct of a trade or business within   company.
                                                                                from a section 1291 fund from Form 
the United States (excluding foreign      The 100% deduction does not           8621, to the extent that the amounts 
trade income), and                      apply to affiliated group members that  are taxed as dividends under section 
• Qualify for the 50% deduction         are joining in the filing of a          301. See Form 8621 and the 
under section 245(c)(1)(B).             consolidated return.                    Instructions for Form 8621.
Line 7, column (a). Enter the           Line 10, column (c). Limitation on      Line 16, column (a). Reserved for 
U.S.-source portion of dividends that:  dividends-received deduction.           future use.
• Are received from                     Generally, line 10 of column (c) 
20%-or-more-owned foreign               cannot exceed the amount from the       Line 16, column (c). Reserved for 
corporations, and                       Worksheet for Schedule A, Line 10.      future use.
• Qualify for the 65% deduction         However, in a year in which an NOL      Line 17a, column (a). Enter the 
under sections 245(a) and 243 by        occurs, this limitation does not apply  foreign-source portion of any subpart 
reference.                              even if the loss is created by the      F inclusions attributable to the sale or 
  Also include dividends received       dividends-received deduction. See       exchange by a CFC of stock in 
from a 20%-or-more-owned FSC that:      section 246(b).                         another foreign corporation described 
• Are attributable to income treated    Line 13, column (a). In general,        in section 964(e)(4). This should 
as effectively connected with the       enter “100% dividends” as defined in    equal the U.S. shareholder's pro rata 
conduct of a trade or business within   section 805(a)(4)(C). That is, in       share of the amount reported on 
the United States (excluding foreign    general, enter dividends that qualify   Form(s) 5471, Information Return of 
trade income), and                      for the 100% dividends-received         U.S. Persons With Respect to Certain 
• Qualify for the 65% deduction         deduction under sections 243, 244       Foreign Corporations, Schedule I, 
under section 245(c)(1)(B).             (as affected by Public Law 113-295,     line 1a.
Line 8, column (a). Enter dividends     Div. A, section 221(a)(41)(A), Dec. 19, Line 17b, column (a). Enter the pro 
received from wholly owned foreign      2014, 128 Stat. 4043), and 245(b),      rata share of subpart F inclusions 
subsidiaries that are eligible for the  and were not reported on line 8 or 9    attributable to hybrid dividends of 
100% deduction under section 245(b)     because they were (a) not distributed   tiered corporations under section 
but that do not qualify as “100%        out of tax-exempt interest or out of    245A(e)(2). This should equal the 

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                                                                                               risk of loss was diminished. See 
                                                                                               section 246(c)(4) and Regulations 
    Worksheet for Schedule A, Line 10                    Keep for Your Records                 section 1.246-5 for more details.
1.  Refigure Form 1120-L, page 1, line 8, without any adjustment                               b. Dividends attributable to 
    under section 1059, and without any capital loss carryback to                              periods totaling more than 366 days 
    the tax year under section 1212(a)(1). Add this refigured line 8                           that the corporation received on any 
    amount to the amount on page 1, line 25. Subtract from that total                          share of preferred stock held for less 
    the sum of page 1, lines 9 through 18 . . . . . . . . . . . . . . . . . . . .              than 91 days during the 181-day 
2.  Add lines 9, 13, 14, and 17a, column (c), and the portion of the                           period that began 90 days before the 
    deduction on line 8, column (c), that is attributable to dividends                         ex-dividend date. When counting the 
    from FSCs that are attributable to foreign trade income . . . . . . .                      number of days the corporation held 
3.  Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    the stock, you cannot count certain 
4.  Multiply line 3 by 65% (0.65)  . . . . . . . . . . . . . . . . . . . . . . . . . . .       days during which the corporation's 
5.  Add lines 2, 5, and 7, column (c); the portion of the deduction on                         risk of loss was diminished. See 
    line 8, column (c), that is attributable to wholly owned foreign                           section 246(c)(4) and Regulations 
    subsidiaries; and the portion of the deduction on line 3, column                           section 1.246-5 for more details. 
    (c), that is attributable to dividends received from                                       Preferred dividends attributable to 
    20%-or-more-owned corporations . . . . . . . . . . . . . . . . . . . . . . .               periods totaling less than 367 days 
6.  Enter the smaller of line 4 or line 5. If line 5 is greater than line 4,                   are subject to the 46-day holding 
    stop here and enter the amount from line 6 on line 10, column                              period rule above.
    (c), and do not complete the rest of the worksheet . . . . . . . . . .                     
                                                                                               c. Dividends on any share of stock 
7.  Enter the total amount of dividends from 20%-or-more-owned 
    corporations that are included on lines 2, 3, 5, and 7, column (a),                        to the extent the corporation is under 
    and the portion of the deduction on line 8, column (a), that is                            an obligation (including a short sale) 
    attributable to wholly owned subsidiaries . . . . . . . . . . . . . . . . . .              to make related payments with 
8.  Subtract line 7 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    respect to positions in substantially 
                                                                                               similar or related property.
9.  Multiply line 8 by 50% (0.50)  . . . . . . . . . . . . . . . . . . . . . . . . . . .       
10. Subtract line 5 above from line 10, column (c) . . . . . . . . . . . . . .                 6. Any other taxable dividend 
                                                                                               income not properly reported above.
11. Enter the smaller of line 9 or line 10 . . . . . . . . . . . . . . . . . . . . . .         
12. Dividends-received deduction after limitation (section                                     Line 21, column (c). Enter the 
    246(b)). Add lines 6 and 11. Enter the result here and on                                  section 250 deduction claimed for 
    line 10, column (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  FDII and GILTI. This should equal the 
                                                                                               sum of line 8 and line 9 of Form 8993, 
                                                                                               Section 250 Deduction for 
U.S. shareholder's pro rata share of      dividends paid in pre-2022 tax years                 Foreign-Derived Intangible Income 
the amount reported on Form(s) 5471,      of foreign corporations) and 960.                    (FDII) and Global Intangible 
                                                                                               Low-Taxed Income (GILTI), Part IV.
Schedule I, line 1b.                      2. Dividends (other than capital 
Line 17c, column (a).  Enter all          gain distributions reported on 
other amounts included in income          Schedule D (Form 1120) and                           Schedule B—Investment 
under section 951, which should           exempt-interest dividends) that are                  Income
equal the U.S. shareholder's pro rata     received from RICs and that are not 
share of the sum of the amounts           subject to the 50% deduction.                        Line 1. Interest. Enter the total 
                                                                                               taxable interest received or accrued 
reported on Form(s) 5471, Schedule I,     3. Dividends from tax-exempt                         during the tax year, less any 
lines 1f, 2, 3, and 4.                    organizations.                                       amortization of premium, plus any 
Line 18, column (a).   Enter amounts      4. Dividends (other than capital                     accrual of discount required by 
included in income under the section      gain distributions) received from a                  section 811(b). Generally, the 
951A GILTI provision. See Form            REIT that, for the tax year of the trust             appropriate amortization of premium 
8992, U.S. Shareholder Calculation of     in which the dividends are paid,                     and accrual of discount for the tax 
Global Intangible Low-Taxed Income        qualifies under sections 856 through                 year on bonds, notes, debentures, or 
(GILTI), Part II, line 5; and the         860.                                                 other evidence of indebtedness held 
Instructions for Form 8992. Also,         5. Dividends not eligible for a                      by a life insurance company should be 
consider the applicability of section     dividends-received deduction, which                  determined:
951A with respect to CFCs owned by        include the following.                               1. Under the method regularly 
domestic partnerships in which the                                                             employed by the company, if 
                                          a. Dividends received on any 
filer has an interest. If you also have a                                                      reasonable; and
                                          share of stock held for less than 46 
Form 5471 reporting requirement, 
                                          days during the 91-day period 
attach Form 5471.                                                                              2. In all other cases, under the 
                                          beginning 45 days before the                         regulations.
Line 19, column (a).   Include the        ex-dividend date. When counting the 
following.                                number of days the corporation held                  For bonds (as defined in section 
1. Include gross-up for taxes             the stock, you cannot count certain                  171(d)) issued after September 27, 
deemed paid under section 902 (for        days during which the corporation's                  1985, the appropriate amount of 

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amortization of premium must be will be a deduction in computing • Cancelable accident and health
determined using the yield to maturity LICTI. insurance.
method described in section 171(b) With regard to the special rules for
(3). Market discount is not required to The net increase or net decrease in
discounting unpaid losses on accident
be accrued under section 811(b). reserves is figured by comparing the
and health insurance (other than
Attach a statement showing the opening balance for reserves to the
disability income insurance), unpaid
method and computation used. closing balance for reserves reduced
losses are assumed to be paid in the
by the policyholders' share of
middle of the year following the
Note. The Small Business Job tax-exempt interest (and the increase
accident year.
Protection Act of 1996 repealed in policy cash value of section 264(f)
section 133, which provided for the policies as defined in section 805(a) Generally, the amount of
50% interest income exclusion with (4)(F)). undiscounted unpaid losses means
respect to ESOP loans. The Act also the unpaid losses shown in the annual
repealed section 812(g), which Reserve adjustments are not statement. The amount of discounted
provided for the exclusion of interest treated as interest expenses for unpaid losses with respect to any line
income from ESOP loans for allocation purposes under section of business for an accident year
company/policyholder proration. The 864(c). See section 818(f). cannot exceed the total amount of
repeal of these exclusions is effective unpaid losses with respect to any line
for ESOP loans made after August 20, There are special rules for of business for an accident year as
1996. See Act section 1602 for computing reserves of unearned reported on the annual statement.
special rules for binding contract premiums of certain nonlife contracts. The applicable interest rate for
agreements in effect prior to June 10, See section 807(e)(5)(A). each calendar year and the applicable
1996, and certain refinancings made Note. If the basis for determining the loss payment patterns for each
after August 20, 1996. amount of any item referred to in accident year for each line of business
Line 3. Rents. Enter the rents section 807(c) (life insurance are determined by the IRS. The
received or accrued during the tax reserves, etc.) at the end of the tax applicable interest rate and loss
year. Related expenses, such as year differs from the basis for the payment patterns for 2022 are
repairs, taxes, and depreciation, determination at the beginning of the published in Rev. Proc. 2023-10,
should be reported as “Other tax year, see section 807(f). 2023-3 I.R.B. 411, available at
IRS.gov/irb/2023-3_IRB#REV-
deductions” on page 1, line 18. Line 1. Life insurance reserves. PROC-2023-10. Rev. Proc. 2023-10
Line 4. Royalties. Enter the royalties For rules on how to compute life also provides, for convenience, the
received or accrued during the tax insurance reserves, see sections discount factors for losses incurred in
year. Report the depletion deduction 807(d) and (e). earlier accident years for use in tax
on page 1, line 18. Line 2. Unearned premiums and years beginning in 2022.
Line 5. Leases, terminations, etc. unpaid losses. For purposes of Line 3. Supplementary contracts.
Enter the income received from sections 807 and 805(a)(1), the Enter the amount (discounted at the
entering into, altering, or terminating amount of the unpaid losses (other appropriate rate of interest) necessary
any lease, mortgage, or other than losses on life insurance to satisfy the obligations under
instrument from which the corporation contracts) must be the amount of the insurance and annuity contracts, but
derives interest, rents, or royalties. discounted unpaid losses determined only if the obligations do not involve
under section 846. (at the time the computation is made)
Section 846 provides that the life, accident, or health contingencies.
Schedule F—Increase
amount of the discounted unpaid For this item, the appropriate rate
(Decrease) in Reserves losses must be figured separately by of interest is the highest rate or rates
(Section 807) each line of business (multiple peril permitted to be used to discount the
lines must be treated as a single line obligations by the NAIC as of the date
Note. Attach a statement to the tax of business) and by each accident the reserve is determined. In no case
return that reconciles lines 1 through 6 year and must be equal to the present shall the amount determined under
of Schedule F to the annual statement value of those losses determined by section 807(c)(3) for any contract be
used to prepare the tax return. If the using the: less than the net surrender value of
annual statement used to prepare the such contract.
1. Amount of the undiscounted
tax return is different from the NAIC
unpaid losses,
annual statement filed with the state of Line 4. Dividend accumulations
domicile, include a separate 2. Applicable interest rate, and and other amounts. Enter the total
reconciliation of lines 1 through 6 of 3. Applicable loss payment dividend accumulations and other
Schedule F to the annual statement pattern. amounts held as interest in
filed with the state of domicile. connection with insurance and annuity
Special rules apply to:
Schedule F is used to determine if, contracts.
under section 807, certain reserves • Unpaid losses related to disability
insurance (other than credit disability Line 5. Advance premiums. Enter
decreased or increased for the tax the total premiums received in
insurance),
year. A net decrease will be includible advance and liabilities for premium
in gross income, while a net increase • Noncancelable accident and health
insurance, and deposit funds. See section 807(e)(5)

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(A) for special rules for treatment of • Advanced premiums; Note. If interest expense is included
certain nonlife reserves. • Amounts in a premium deposit fund on line 9, do not also include it on
or similar account, as permitted by page 1, line 15a.
Line 6. Special contingency re-
Regulations section 1.848-2(b)(3);
serves. Enter the total reasonable Line 13. Unamortized specified
special contingency reserves under • Fees;
policy acquisition expenses from
contracts of group-term life insurance • Assessments;
prior years. Enter the balance of
or group accident and health • Amounts that the insurance
unamortized specified policy
company charges itself representing
insurance, which are established and acquisition expenses from prior years
premiums with respect to benefits for
maintained for the provision of as of the beginning of the tax year.
its employees (including full-time
insurance on retired lives, premium See section 848(f)(1)(B).
insurance salesmen treated as
stabilization, or for a combination
employees under section 7701(a) Line 16. Phase-out amount. The
thereof.
(20)); and amount of amortization for members
Line 8. Increase (decrease) in re- • The value of a new contract issued of a controlled group and the
serves under section 807. In in an exchange described in phase-out of the group's specified
figuring the amount on line 8, any Regulations section 1.848-2(c)(2) or policy acquisition expenses under
decrease in reserves must be (3). section 848(b) must be allocated to
computed without any reduction of the each member in proportion to that
Line 2. Return premiums and pre-
closing balance of section 807 member's specified policy acquisition
miums and other consideration in-
reserves by the policyholders' share expenses for the tax year.
curred for reinsurance. For
of tax-exempt interest.
purposes of section 848(d)(1)(B) and
Line 11. Do not include the exempt Regulations section 1.848-2(e), return Schedule K—Tax
portion of any of the interest income premiums means amounts (other than Computation
received on an ESOP loan made prior policyholder dividends or claims and
to August 21,1996. For binding benefit payments) returned or Line 1. If the corporation is a member
contract and refinancing rules, see credited to the policyholder. See of a controlled group, check the box
Public Law 104-188, section 1602. Regulations sections 1.848-2(f) and on line 1. Complete and attach
1.848-3 for how to treat amounts Schedule O (Form 1120), Consent
returned to another insurance Plan and Apportionment Schedule for
Schedule G—Policy company under a reinsurance a Controlled Group. Component
Acquisition Expenses agreement. members of a controlled group must
For purposes of section 848(b), all life use Schedule O (Form 1120) to report
Line 4. Enter the applicable net
insurance company members of the the apportionment of certain tax
premium percentage as defined in
same controlled group are treated as benefits between the members of the
section 848(c)(1).
one company. Any deduction group. See Schedule O (Form 1120)
determined for the group must be Line 5. The entries in column 5(a), and the Instructions for Schedule O
allocated among the life insurance 5(b), or 5(c) may be positive or (Form 1120) for more information.
companies in the group in such a negative. Line 2. Corporations figure their tax
manner as the IRS may prescribe. Line 6. If the sum of columns 5(a), by multiplying taxable income by 21%
Note. Policy acquisition expenses for 5(b), and 5(c) is negative, enter this (0.21).
an annuity or life insurance contract negative amount on line 6 and
Deferred tax under section
that includes a qualified long-term enter -0- on lines 7 and 8. The result is
1291. If the corporation was a
care insurance contract as part of, or a negative capitalization amount
shareholder in a PFIC and received
as a rider on, the annuity or life under section 848(f).
an excess distribution or disposed of
insurance contract, must be Line 9. General deductions. These its investment in the PFIC during the
capitalized using the net premium are deductions under sections 161 year, it must include the total increase
percentage for contracts that are not through 198, relating to itemized in taxes due under section 1291(c)(2)
described in section 848(c)(1)(A) or deductions, and sections 401 through (from Form 8621) in the total for line 2.
848(c)(1)(B). See section 848(e)(6) 424, relating to pension, On the dotted line to the left of line 2,
for more information. profit-sharing, stock bonus plans, etc. enter “Section 1291” and the amount.
Line 1. Gross premiums and other Also, include on this line ceding Do not include on line 2 any
consideration. Generally, gross commissions incurred for the interest due under section 1291(c)(3).
premiums and other consideration is reinsurance of a specified insurance Instead, include the amount of interest
the total of: contract. Do not include amortization owed on Schedule K, line 9.
deductions of specified policy
1. All premiums and other acquisition expenses under section For more information on reporting
the deferred tax and interest, see the
consideration (other than amounts on 848(a) or (b). Skip line 9 if the
Instructions for Form 8621.
reinsurance agreements), and corporation has elected out of the
2. Net positive consideration for general deductions limitation. See Increase in tax attributable to
any reinsurance agreement (see Regulations section 1.848-2(g)(8). partner's audit liability under
Regulations section 1.848-2(b)). section 6226. If the corporation is
Also include on this line: filing Form 8978 to report adjustments

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shown on Form 8986, Partner’s Share Line 5d. Credit for prior year mini- Rev. Proc. 2021-41, 2021-39 I.R.B.
of Adjustment(s) to mum tax. Enter any allowable credit 443, available at IRS.gov/2021-39
Partnership-Related Item(s), they from Form 8827, Credit for Prior Year IRB, for the domestic asset/liability
received from partnerships which Minimum Tax—Corporations. percentages and domestic yields
have been audited and have elected Complete and attach Form 8827. needed to compute this amount.
to push out imputed underpayments Any additional income required by
to their partners, include any increase Line 5e. Bond credits from Form
section 842(b) must be included in
in taxes due from Form 8978, line 14, 8912. Enter the allowable credits
LICTI (for example, page 1, line 7).
in the total for Form 1120-L, from Form 8912, Credit to Holders of
Schedule K, line 2. On the dotted line Tax Credit Bonds, line 12. Reduction of section 881 tax.
next to line 2, enter "FROM FORM Line 6. Total credits. Add lines 5a Additional taxes resulting from the net
8978" and the amount. Attach Form through 5e and enter the total on investment income adjustment may
8978. If Form 8978, line 14, shows a line 6. offset a corporation's section 881 tax
decrease in tax, see the instructions on U.S.-source income. The tax
for Schedule K, line 6. Decrease attributable to reduction is determined by multiplying
partner's audit liability under the section 881 tax by the ratio of the
Additional tax under section section 6226. If the corporation is amount of income adjustment to
197(f). A corporation that elects to filing Form 8978 to report adjustments income subject to the section 881 tax,
recognize gain and pay tax on the shown on Form 8986 they received computed without the exclusion for
sale of a section 197 intangible under from partnerships which have been interest on state and local bonds or
the related person exception to the audited and have elected to push out income exempted from taxation by
anti-churning rules should include any imputed underpayments to their treaty. See section 842(c)(1). Attach a
additional tax due in the total for partners, include any decrease in statement showing how the reduction
line 2. On the dotted line next to line 2, taxes due (negative amount) from of section 881 tax was figured. Enter
enter “Section 197” and the amount. Form 8978, line 14, in the total for the net tax imposed by section 881 on
See section 197(f)(9)(B)(ii). Form 1120-L, Schedule K, line 6. On line 8.
Line 3. Base erosion minimum tax the dotted line next to line 6, enter
amount. If the corporation had gross "FROM FORM 8978" and the amount. Line 9. Other taxes. Include any of
the following taxes and interest in the
receipts of at least $500 million in any Attach Form 8978. If Form 8978,
total on line 9. Check the appropriate
1 of the 3 preceding tax years, see line 14, shows an increase in tax, see
box(es) for the form, if any, used to
section 59A and the Instructions for the instructions for Schedule K, line 2.
figure the total.
Form 8991, Tax on Base Erosion Line 8. Foreign corporations. A
Payments of Taxpayers With foreign corporation carrying on a life Recapture of investment credit.
Substantial Gross Receipts, for further insurance business in the United If the corporation disposed of
guidance on the determination of the States is taxed as a domestic life investment credit property or changed
amount of base erosion minimum tax. insurance company on its income its use before the end of its useful life
Line 5a. Foreign tax credit. To find effectively connected with the conduct or recovery period, it may owe tax.
out if a corporation can take this credit of a trade or business in the United See Form 4255, Recapture of
for payment of income tax to a foreign States (see sections 864(c) and 897 Investment Credit.
country or U.S. possession, see Form for definition). Recapture of low-income
1118, Foreign Tax Generally, any other U.S.-source housing credit. If the corporation
Credit—Corporations. income received by the foreign disposed of property (or there was a
corporation is taxed at 30% (or at a reduction in the qualified basis of the
Line 5b. Credit from Form 8834.
lower treaty rate) under section 881. If property) for which it took the
Enter any qualified electric vehicle
the corporation has this income, low-income housing credit and the
passive activity credits from prior
attach a statement showing the kind corporation did not follow the
years allowed for the current year
and amount of income, the tax rate, procedures that would have
from Form 8834, Qualified Electric
and the amount of tax. Enter the tax prevented recapture of the credit, it
Vehicle Credit, line 7. Attach Form
on line 8. However, see Reduction of may owe a tax. See Form 8611,
8834.
section 881 tax, later. Recapture of Low-Income Housing
Line 5c. General business credit. Credit.
Enter on line 5c the corporation's Note. Interest received from certain
allowable credit from Form 3800, Part portfolio debt investments that were Other. Additional taxes and
II, line 38. issued after July 18, 1984, is not interest amounts can be included in
The corporation is required to file subject to the tax. See section 881(c). the total entered on line 9. Check the
box for “Other” if the corporation
Form 3800 to claim most business See section 842 for more includes any additional taxes and
credits. See the Instructions for Form information. interest such as the items discussed
3800 for exceptions. For a list of Minimum effectively connected below. See How to report, later, for
allowable credits, see Form 3800. net investment income. See details on reporting these amounts on
Also, see the applicable credit form section 842(b) and Notice 89-96, an attached statement.
and its instructions. 1989-2 C.B. 417, for the general rules • Recapture of Indian employment
for computing this amount. Also, see credit. Generally, if an employer

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terminates the employment of a Note. Foreign life insurance Question 6. Check the “Yes” box if:
qualified employee less than 1 year companies should report assets and • The corporation is a subsidiary in
after the date of initial employment, insurance liabilities for their U.S. an affiliated group (defined below) but
any Indian employment credit allowed business only. is not filing a consolidated return for
for a prior tax year because of wages the tax year with that group, or
paid or incurred to that employee Part I—Total Assets
must be recaptured. For details, see For Schedule L, assets mean all • The corporation is a subsidiary in a
parent-subsidiary controlled group.
Form 8845 and section 45A. assets of the corporation. In valuing
For a definition of a parent-subsidiary
• Recapture of new markets credit real property and stocks, use FMV; for
controlled group, see the Instructions
(see Form 8874, New Markets other assets, use the adjusted basis
for Schedule O (Form 1120).
Credit). as determined under section 1011
• Recapture of employer-provided and related sections, without regard to Any corporation that meets either
childcare facilities and services credit section 818(c). An interest in a of the requirements above should
(see Form 8882). partnership or trust is not itself treated check the “Yes” box. This applies
• Interest on deferred tax attributable as an asset of the corporation. even if the corporation is a subsidiary
to certain nondealer installment Instead, the corporation is treated as member of one group and the parent
obligations (section 453A(c)). actually owning its proportionate corporation of another.
• Interest due on deferred gain share of the assets held by the
Note. If the corporation is an
(section 1260(b)). partnership or trust. The value of the
“excluded member” of a controlled
• Interest due under section 1291(c) corporation's share of these assets
group (see definition in the
(3). See Form 8621 and the should be listed on line 3.
Instructions for Schedule O (Form
Instructions for Form 8621. Part II—Total Assets and Total 1120)), it is still considered a member
Alternative minimum tax. Insurance Liabilities of a controlled group for this purpose.
Applicable corporations filing a return Affiliated group. An affiliated group
The information provided in
for a short tax year that begins in 2023 is one or more chains of includible
Part II should conform with the
and ends in 2023, include on line 9 CAUTION! corporations (section 1504(a))
“Assets” and “Liabilities,
any corporate AMT imposed under connected through stock ownership
Surplus, and Other Funds” sections of
section 55 by the Inflation Reduction with a common parent corporation.
the NAIC annual statement.
Act of 2022. On the dotted line next to The common parent must be an
line 9, enter “CAMT” and the AMT Foreign life insurance companies includible corporation and the
amount. Attach a detailed statement must maintain a minimum surplus of following requirements must be met.
showing the computation of the AMT. U.S. assets over their U.S. insurance 1. The common parent must own
Include a computation of adjusted liabilities. The minimum required directly stock that represents at least
financial statement income. Label the surplus is determined by multiplying 80% of the total voting power and at
statement "CAMT." their U.S. insurance liabilities by a least 80% of the total value of the
percentage determined by the IRS.
How to report. If the corporation stock of at least one of the other
The IRS determines the percentage
checked the “Other” box, attach a includible corporations.
from data supplied by domestic life
statement showing the computation of 2. Stock that represents at least
insurance companies on Schedule L,
each item included in the total for 80% of the total voting power and at
Part II. See section 842.
line 9 and identify the applicable Code least 80% of the total value of the
section and the type of tax or interest. For Schedule L, total insurance stock of each of the other
Line 10. Total tax. Include any liabilities means the sum of the corporations (except for the common
deferred tax on the termination of a following amounts as of the end of the parent) must be owned directly by one
section 1294 election applicable to tax year. or more of the other includible
shareholders in a QEF in the amount 1. Total reserves as defined in corporations.
entered on line 10. section 816(c); plus For this purpose, “stock” generally
Subtract any deferred tax on the does not include any stock that (a) is
2. The items referred to in
corporation's share of undistributed nonvoting, (b) is nonconvertible, (c) is
paragraphs (3), (4), (5), and (6) of
earnings of a QEF (see Form 8621). limited and preferred as to dividends
section 807(c), to the extent such
and does not participate significantly
How to report. Attach a statement amounts are not included in total
showing the computation of each item reserves. in corporate growth, and (d) has
redemption and liquidation rights that
included in, or subtracted from, the
Foreign life insurance companies, do not exceed the issue price of the
total for line 10. On the dotted line
see Notice 89-96 for more information stock (except for a reasonable
next to line 10, specify (a) the
on determining total insurance redemption or liquidation premium).
applicable Code section, (b) the type
liabilities on U.S. business. See section 1504(a)(4).
of tax, and (c) the amount of tax.
Question 8. Check the “Yes” box if
Schedule M—Other one foreign person owned at least
Schedule L 25% of the total voting power of all
All filers must complete Parts I and II Information
classes of stock of the corporation
of Schedule L. Complete the items that apply to the
entitled to vote, or at least 25% of the
corporation.
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total value of all classes of stock of the NOLs generated in prior years but not 3. The amount is paid or accrued
corporation. used to offset income (either as a pursuant to a hybrid transaction or by,
The constructive ownership rules of carryback or carryover) in a tax year or to, a hybrid entity.
section 318 apply in determining if a prior to 2022. Do not reduce the
When section 267A applies, the
corporation is foreign owned. See amount by any NOL deduction
deduction is generally disallowed to
section 6038A(c)(5) and the related reported on page 1, line 21b.
the extent the related party does not
regulations. Item 12. Complete item 12 to identify include the amount in income or is
Enter on line 8a the percentage the state where the annual statement allowed a deduction with respect to
owned by the foreign person specified used to prepare the tax return was the amount. However, the deduction
in question 8. On line 8b, write the filed. is not disallowed to the extent the
name of the owner's country. Question 13. A corporation that files amount is included in the gross
Form 1120-L must file Schedule UTP income of a U.S. shareholder under
Note. If there is more than one section 951(a).
(Form 1120), Uncertain Tax Position
25%-or-more foreign owner, complete
Statement, with its 2022 income tax For definitions of terms, see section
lines 8a and 8b for the foreign person
return if: 267A.
with the highest percentage of
ownership. • For 2022, the corporation's total Question 16. The limitation on
assets equal or exceed $10 million; business interest expense applies to
Foreign person. The term “foreign • The corporation or a related party every taxpayer with a trade or
person” means: issued audited financial statements business, unless the taxpayer meets
• An individual who is not a citizen or reporting all or a portion of a certain specified exceptions. A
resident of the United States; corporation's operations for all or a taxpayer may elect out of the
• An individual who is a citizen or portion of the corporation's tax year; limitation for certain businesses
resident of a U.S. possession who is and otherwise subject to the business
not otherwise a citizen or resident of • The corporation has one or more interest expense limitation.
the United States; tax positions that must be reported on
• Any partnership, association, Schedule UTP. Certain real property trades or
businesses and farming businesses
company, or corporation that is not Attach Schedule UTP to the qualify to make an election not to limit
created or organized in the United corporation's income tax return. Do business interest expense. This is an
States; not file it separately. A taxpayer that irrevocable election. If you make this
• Any foreign estate or trust within the files a protective Form 1120-L must election, you are required to use the
meaning of section 7701(a)(31); or also file Schedule UTP if it satisfies alternative depreciation system to
• A foreign government (or one of its the requirements set forth above. depreciate any nonresidential real
agencies or instrumentalities) to the
extent that it is engaged in the For details, see the Instructions for property, residential rental property,
conduct of a commercial activity as Schedule UTP. and qualified improvement property
described in section 892. Question 14. If the corporation had for an electing real property trade or
However, the term "foreign person" gross receipts of at least $500 million business, and any property with a
does not include any foreign person in any 1 of the 3 preceding tax years, recovery period of 10 years or more
who consents to the filing of a joint complete and attach Form 8991. For for an electing farming business. See
income tax return. this purpose, the corporation's gross section 168(g)(1)(F). Also, you are not
receipts include the gross receipts of entitled to the special depreciation
Owner's country. For individuals, all persons aggregated with the allowance for that property. For a
the term “owner's country” means the corporation as specified in section taxpayer with more than one
country of residence. For all others, it 59A(e)(3). See the Instructions for qualifying business, the election is
is the country where incorporated, Form 8991 to determine if the made with respect to each business.
organized, created, or administered. corporation is subject to the base Check "Yes" if the corporation has
Requirement to file Form 5472. If erosion minimum tax. an election in effect to exclude a real
property trade or business or a
the corporation checked “Yes” to Question 15. Section 267A disallows
farming business from section 163(j).
question 8, it may have to file Form a deduction for certain interest and
For more information, see section
5472. Generally, a 25% royalty payments or accruals. In
163(j) and the Instructions for Form
foreign-owned corporation that had a general, section 267A applies when:
reportable transaction with a foreign 8990.
or domestic related party during the 1. The interest or royalty is paid or
tax year must file Form 5472. See the accrued to a related party; Question 17. Generally, a taxpayer
with a trade or business must file
Instructions for Form 5472 for filing 2. Under its tax laws, the related Form 8990 to claim a deduction for
instructions and penalties for failure to party either: business interest. In addition, Form
file. a. Does not include the full amount 8990 must be filed by any taxpayer
Item 11. Enter the amount of the in income, or that owns an interest in a partnership
NOL carryover to the tax year from b. Is allowed a deduction with with current year, or prior year
prior years, even if some of the loss is respect to the amount; and carryover, excess business interest
used to offset income on this return. expense allocated from the
The amount to enter is the total of all partnership.

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Exclusions from filing. A taxpayer (as defined in section 448(d)(3)), and 448(c) and the Instructions for Form
is not required to file Form 8990 if the (b) meets the gross receipts test of 8990 for additional information.
taxpayer is a small business taxpayer section 448(c), discussed next.
Member of controlled group, busi-
and does not have excess business Gross receipts test. For tax years ness under common control, or af-
interest expense from a partnership. A beginning in 2022, a taxpayer meets filiated group. For purposes of the
taxpayer is also not required to file the gross receipts test if the taxpayer gross receipts test, all members of a
Form 8990 if the taxpayer only has has average annual gross receipts of controlled group of corporations (as
business interest expense from the $27 million or less for the 3 prior tax defined in section 52(a)) and all
following excepted trades or years. A taxpayer's average annual members of a group of businesses
businesses. gross receipts for the 3 prior tax years under common control (as defined in
• An electing real property trade or is determined by adding the gross section 52(b)), are treated as a single
business. receipts for the 3 prior tax years and person, and all employees of the
• An electing farming business. dividing the total by 3. Gross receipts members of an affiliated service group
• Certain utility businesses. include the aggregate gross receipts (as defined in sections 414(m) and
Small business taxpayer. A small from all persons treated as a single (o)) shall be treated as employed by a
business taxpayer is not subject to the employer, such as a controlled group single person. If required, attach Form
business interest expense limitation of corporations, commonly controlled 8990 to the corporation's income tax
and is not required to file Form 8990. partnerships, or proprietorships, and return. Do not file it separately. See
A small business taxpayer is a affiliated service groups. See section Limitations under Line 15a, earlier.
taxpayer that (a) is not a tax shelter

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 from 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
 
                             Electronic Federal Tax                                      K 20
A                              Payment System             M                              L, Part I 22
                               (EFTPS) 4
Accounting methods,                                       Minimum tax:                   L, Part II 22
  change in  5               Electronic Filing 3                                         M 22
                                                             Alternative minimum tax  21
Accounting period (tax       Employer identification                                    Schedule M-3 (Form 
  year) 6                      number (EIN)    8             Prior year, credit for 21
                                                                                         1120-L)    8
Address change   8           Estimated tax payments    15                               Section 953 elections              8
Affiliated group 22          Estimated tax penalty 5 16,  N
Amended return   8           Extension of time to file 3  Name change   8               T
Amortization 10                                                                         Tax and payments:
Annual Statement   4         F                            O
                                                                                         Estimated tax payments              15
Assembling the return  4     Final return 8               Operations loss                Prior year(s) special 
                             Foreign corporations  21        deduction  15                 estimated tax payments 
B                            Foreign person  23           Other deductions   12            to be applied                 15
Backup withholding   16      Foreign tax credit 21        Other taxes   21              Taxpayer Advocate 
Business start-up            Forms and publications,      Overpaid   15                  Service    1
  expenses   10                how to get  2              Owner's country  23           Transactions between 
                             Future Developments   1      Ozone-depleting chemicals,     related taxpayers                 10
                                                             credit for tax on 16       Travel, meals, and 
C                                                                                        entertainment:
                             G
Charitable contributions  13                              P                              Meals and 
Consolidated return  7       General business credit   21                                  entertainment                 14
Controlled group:            Golden parachute             Paid preparer 
                               payments   10                 authorization 3             Membership dues                 14
  Member of  20                                           Penalties  5 16,               Travel 14
                             Gross premiums and other 
  Parent-subsidiary 22         consideration   9          Pension, profit-sharing, etc. 
                                                             plans   13                 W
D                            I                            Period covered   7            What's New   1
                                                          Private delivery services   3
Deductions   10              Interest due on late                                       When to file 3
Definitions:                   payment of tax   5                                       Where to file 3
  Insurance company  2                                    R                             Who must file 2
  Life insurance company  2  L                            Recordkeeping    6             Foreign Life Insurance 
  Reserves test  3           Life insurance company       Return premiums    9             Companies   2
                                                                                         Mutual savings banks 
Depository methods of tax      taxable income   9                                          conducting life insurance 
  payment    4               Limitation on                S                                business   2
Disclosure statement 6         dividends-received         Schedule:                      Other insurance 
                               deduction   17                A 16                          companies   2
E                            Limitations on                  B 18                       Who must sign  3
Electronic deposit of tax      deductions   10
                                                             F 19                       Worksheet for 
  refund of $1 million or    Losses incurred   11                                        Schedule A    17
                                                             G 20
  more  16

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