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                                                                                                            Department of the Treasury
                                                                                                            Internal Revenue Service
2022

Instructions for Form 1120

U.S. Corporation Income Tax Return

Section references are to the Internal Revenue                                                    Advanced manufacturing investment 
Code unless otherwise noted.                       Future Developments
                                                                                                  credit.   A corporation that held a qualified 
Contents                                    Page   For the latest information about               investment in an advanced manufacturing 
                                                   developments related to Form 1120 and          facility that is placed in service after 
Future Developments .     . . . . . . . . . . . 1  its instructions, such as legislation          December 31, 2022, can elect to treat the 
What’s New .   . . . . . . . . . . . . . . . . . 1 enacted after they were published, go to       credit for the advanced manufacturing 
Photographs of Missing Children         . . . . 1  IRS.gov/Form1120.                              investment as a deemed payment. If the 
The Taxpayer Advocate Service .         . . . . 1
                                                                                                  election is made, the corporation is treated 
Direct Deposit of Refund .    . . . . . . . . . 2  What’s New                                     as making a payment against tax by the 
How To Make a Contribution To                                                                     amount of the credit. See section 48D. 
Reduce Debt Held by the                            Increase in penalty for failure to file. 
Public .    . . . . . . . . . . . . . . . . . . 2  For returns due in 2023, the minimum           See the Instructions for Form 3468 for 
How To Get Forms and                               penalty for failure to file a return that is   information on how to report the deemed 
Publications .      . . . . . . . . . . . . . . 2  more than 60 days late has increased to        credit on the corporation's return.
General Instructions .  . . . . . . . . . . . . 2  the smaller of the tax due or $450. See        Principal business activity codes.       The 
Purpose of Form .   . . . . . . . . . . . . . . 2  Late filing of return, later.                  list of principal business activity (PBA) 
Who Must File   . . . . . . . . . . . . . . . . 2  Form 1120-W now historical.      Form          codes has been updated. See Principal 
When To File .  . . . . . . . . . . . . . . . . 3  1120-W, Estimated Tax for Corporations,        Business Activity Codes.
Where To File . . . . . . . . . . . . . . . . . 4  and the Instructions for Form 1120-W are 
Who Must Sign .   . . . . . . . . . . . . . . . 3  now historical. The 2022 Form 1120-W           Photographs of
Paid Preparer Authorization .     . . . . . . . 4  (released in 2021) and the 2022                Missing Children
Assembling the Return .     . . . . . . . . . . 4  Instructions for Form 1120-W (released in      The Internal Revenue Service is a proud 
Tax Payments    . . . . . . . . . . . . . . . . 4  2021) will be the last revision of both the    partner with the National Center for 
Estimated Tax Payments        . . . . . . . . . 5  form and its instructions. Prior versions will Missing & Exploited Children® (NCMEC). 
Interest and Penalties .  . . . . . . . . . . . 5  be available on IRS.gov.                       Photographs of missing children selected 
Accounting Methods .      . . . . . . . . . . . 5  Payroll credit for COVID-related paid          by the Center may appear in instructions 
Accounting Period .   . . . . . . . . . . . . . 6  sick leave and family leave.  Generally,       on pages that would otherwise be blank. 
Rounding Off to Whole Dollars .       . . . . . 6  the credit for qualified sick and family       You can help bring these children home 
Recordkeeping .   . . . . . . . . . . . . . . . 6  leave wages, as enacted under the              by looking at the photographs and calling 
Other Forms and Statements That                    Families First Coronavirus Response Act        1-800-THE-LOST (1-800-843-5678) if you 
May Be Required           . . . . . . . . . . . 6  (FFCRA) and amended and extended by            recognize a child.
Specific Instructions . . . . . . . . . . . . . 7  the COVID-related Tax Relief Act of 2020, 
Period Covered    . . . . . . . . . . . . . . . 7  and the credit for qualified sick and family   The Taxpayer Advocate 
Name and Address .      . . . . . . . . . . . . 7  leave wages, as enacted under the              Service
Identifying Information .   . . . . . . . . . . 8  American Rescue Plan Act of 2021 (the 
Employer Identification Number                     ARP), have expired. However, employers         The Taxpayer Advocate Service (TAS) is 
(EIN)     . . . . . . . . . . . . . . . . . . . 8  that paid qualified sick and family leave      an independent organization within the 
Total Assets . . . . . . . . . . . . . . . . . . 9 wages in 2022 for leave taken after March      IRS that helps taxpayers and protects 
                                                   31, 2020, and before October 1, 2021,          taxpayer rights. TAS's job is to ensure that 
Initial Return, Final Return, Name                 may be eligible to claim a credit for          every taxpayer is treated fairly and knows 
Change, or Address Change .               . . . 9                                                 and understands their rights under the 
Income . . . . . . . . . . . . . . . . . . . . . 9 qualified sick and family leave wages in 
                                                   2022. See the March 2022 revision of the       Taxpayer Bill of Rights.
Deductions .   . . . . . . . . . . . . . . . .  10 Instructions for Form 941 and the 2022           As a taxpayer, the corporation has 
Schedule C. Dividends, Inclusions,                 Instructions for Form 944 for more             rights that the IRS must abide by in its 
and Special Deductions .            . . . . .   17 information. There is no double tax benefit    dealings with the corporation. TAS can 
Schedule J. Tax Computation and                    allowed and the amounts claimed are            help the corporation if:
Payment .       . . . . . . . . . . . . . . .   19
                                                   reportable as income. See Line 10. Other         A problem is causing financial difficulty 
                                                                                                  •
Schedule K. Other Information .       . . . .   21 Income, later.                                 for the business;
Schedule L. Balance Sheets per 
Books .     . . . . . . . . . . . . . . . . .   24 Alternative minimum tax.      For tax years    • The business is facing an immediate 
Schedule M-1. Reconciliation of                    beginning after December 31, 2022, the         threat of adverse action; or
Income (Loss) per Books With                       Inflation Reduction Act of 2022 (IRA)          • The corporation has tried repeatedly to 
Income per Return .         . . . . . . . . .   24 imposes a corporate alternative minimum        contact the IRS but no one has 
Schedule M-2. Analysis of                          tax (AMT). Applicable corporations (within     responded, or the IRS hasn't responded 
Unappropriated Retained                            the meaning of section 59(k)) may be           by the date promised.
Earnings per Books .          . . . . . . . .   25 required to pay this AMT. Short-period 
Principal Business Activity Codes .       . .   28 filers with a tax year beginning after           TAS has offices in every state, the 
Index . . . . . . . . . . . . . . . . . . . . . 31 December 31, 2022, and ending before           District of Columbia, and Puerto Rico. 
                                                   December 31, 2023, see section 55 and          Local advocates' numbers are in their 
                                                   the instructions for Schedule J, line 9g,      local directories and at 
                                                   later.                                         TaxpayerAdvocate.IRS.gov. The 

Jan 30, 2023                                              Cat. No. 11455T

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corporation can also call TAS at all of the forms and publications it may extent that regular interests issued by the
877-777-4778. need on IRS.gov/FormsPubs. Otherwise, FASIT before October 22, 2004, continue
the corporation can go to IRS.gov/ to remain outstanding in accordance with
TAS also works to resolve large-scale OrderForms to place an order and have their original terms.
or systemic problems that affect many forms mailed to it. If a corporation holds an ownership
taxpayers. If the corporation knows of one
of these broad issues, please report it to interest in a FASIT to which these special
TAS through the Systemic Advocacy General Instructions rules apply, it must report all items of
Management System at IRS.gov/SAMS. income, gain, deductions, losses, and
credits on the corporation's income tax
For more information, go to IRS.gov/ Purpose of Form return (except as provided in section
Advocate. Use Form 1120, U.S. Corporation Income 860H). Show a breakdown of the items on
Tax Return, to report the income, gains, an attached statement. For more
losses, deductions, credits, and to figure information, see sections 860H and 860L
Direct Deposit of Refund the income tax liability of a corporation. (repealed with certain exceptions).
To request a direct deposit of the
corporation's income tax refund into an Foreign-owned domestic disregarded
account at a U.S. bank or other financial Who Must File
entities. If a foreign person, including a
institution, attach Form 8050, Direct Unless exempt under section 501, all foreign corporation, wholly owns a
Deposit of Corporate Tax Refund. See the domestic corporations (including domestic disregarded entity (DE), the
instructions for line 37. corporations in bankruptcy) must file an domestic DE is treated as a domestic
income tax return whether or not they corporation separate from its owner (the
have taxable income. Domestic foreign corporation) for the limited
How To Make a corporations must file Form 1120, unless purposes of the requirements under
Contribution To Reduce they are required, or elect to file a special section 6038A that apply to 25%
Debt Held by the Public return. See Special Returns for Certain foreign-owned domestic corporations.
To help reduce debt held by the public, Organizations, later. While a DE is not required to file a U.S.
make a check payable to “Bureau of the Entities electing to be taxed as corpo- income tax return, a DE covered by these
Fiscal Service.” Send it to: rations. A domestic entity electing to be rules is required to file a pro forma Form
classified as an association taxable as a 1120 with Form 5472 attached by the due
Bureau of the Fiscal Service corporation must file Form 1120, unless it date (including extensions) of the return.
Attn: Dept G is required to or elects to file a special See the Instructions for Form 5472 for
P.O. Box 2188 return listed under Special Returns for additional information and coordination
Parkersburg, WV 26106-2188 Certain Organizations. The entity must with Form 5472 reporting by the domestic
also file Form 8832, Entity Classification DE.
Or, enclose the check with the Election, and attach a copy of Form 8832 Qualified opportunity fund. To certify
corporation's income tax return. In the to Form 1120 (or the applicable return) for as a qualified opportunity fund (QOF), the
memo section of the check, make a note the year of the election. For more corporation must file Form 1120 and
that it is a gift to reduce the debt held by information, see Form 8832 and its attach Form 8996, even if the corporation
the public. For information on how to make instructions. had no income or expenses to report. See
this type of contribution online, go to Schedule K, Question 25, later. Also, see
Limited liability companies (LLC). If an
www.treasurydirect.gov and click on “How the Instructions for Form 8996.
entity with more than one owner was
to Make a Contribution to Reduce the
formed as an LLC under state law, it is
Debt.” Qualified opportunity investment. If
generally treated as a partnership for the corporation held a qualified investment
Do not add the contributions to any tax federal income tax purposes and files in a QOF at any time during the year, the
the corporation may owe. See the Form 1065, U.S. Return of Partnership corporation must file its return with Form
instructions for line 35 for details on how to Income. Generally, a single-member LLC 8997 attached. See the instructions for
pay any tax the corporation owes. is disregarded as an entity separate from Form 8997.
Contributions to reduce debt held by the its owner and reports its income and
public are deductible subject to the rules deductions on its owner's federal income
Special Returns for
and limitations for charitable contributions. tax return. The LLC can file a Form 1120
only if it has filed Form 8832 to elect to be Certain Organizations
How To Get Forms treated as an association taxable as a
corporation. For more information about Instead of filing Form 1120, certain organizations,
and Publications LLCs, see Pub. 3402, Taxation of Limited as shown below, file special returns.
Internet. You can access the IRS website Liability Companies. If the organization is a: File Form
24 hours a day, 7 days a week, at IRS.gov Corporations engaged in farming. A ▼ ▼
to: corporation (other than a corporation that
• Download forms, instructions, and is a subchapter T cooperative) that Exempt organization
with unrelated trade or 990-T
publications; engages in farming should use Form 1120 business income
• Order IRS products online; to report the income (loss) from such
• Research your tax questions online; activities. Enter the income and Religious or apostolic
• Search publications online by topic or deductions of the corporation according to organization exempt 1065
keyword; the instructions for lines 1 through 10 and under section 501(d)
• View Internal Revenue Bulletins (IRBs) 12 through 29.
published in recent years; and Entity formed as a
• Sign up to receive local and national tax Ownership interest in a Financial As- limited liability company
news by email. set Securitization Investment Trust under state law and 1065
(FASIT). Special rules apply to a FASIT in treated as a partnership
Tax forms and publications. The existence on October 22, 2004, to the for federal income tax
corporation can view, print, or download purposes

-2- Instructions for Form 1120

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                                             does not, however, apply to certain           30, and must file by the 15th day of the 3rd 
Subchapter T                                 returns.                                      month after the end of its tax year.
cooperative association             1120-C
(including a farmers'                        Certain corporations with total assets of       If the due date falls on a Saturday, 
cooperative)                                                                               Sunday, or legal holiday, the corporation 
                                             $10 million or more that file at least 250 
Entity that elects to be                     returns a year are required to e-file Form    can file on the next business day.
treated as a real estate                     1120. See Regulations section 
mortgage investment                     1066 301.6011-5. However, these corporations       Private Delivery Services
conduit (REMIC) under                        can request a waiver of the electronic filing Corporations can use certain private 
section 860D                                 requirements.                                 delivery services (PDS) designated by the 
                                                                                           IRS to meet the “timely mailing as timely 
Interest charge domestic                     Electronic Filing Waiver                      filing” rule for tax returns. Go to IRS.gov/
international sales            1120-IC-DISC  The IRS may waive the electronic filing       PDS.
corporation (section 992)
                                             rules if the corporation demonstrates that 
Foreign corporation                          a hardship would result if it were required     The PDS can tell you how to get written 
(other than life or                          to file its return electronically. A          proof of the mailing date.
property and casualty               1120-F   corporation interested in requesting a 
insurance company filing                     waiver of the mandatory electronic filing       For the IRS mailing address to use if 
Form 1120-L or Form                          requirement must file a written request,      you’re using a PDS, go to IRS.gov/
1120-PC)                                     and request one in the manner prescribed      PDSstreetAddresses.
                                             by the Ogden Submission Processing                   Private delivery services can't 
Foreign sales                       1120-FSC Center. All written requests for waivers        !    deliver items to P.O. boxes. You 
corporation (section 922)                                                                  CAUTION
                                             should be mailed to:                                 must use the U.S. Postal Service 
Condominium                                                                                to mail any item to an IRS P.O. box 
management, residential                      Internal Revenue Service                      address.
real estate                                  Ogden Submission Processing 
management, or                               Center                                        Extension of Time To File
timeshare association               1120-H   Attn: Form 1120 e-file Waiver                 File Form 7004, Application for Automatic 
that elects to be treated                    Request                                       Extension of Time To File Certain 
as a homeowners                              Mail Stop 1057                                Business Income Tax, Information, and 
association under 
section 528                                  Ogden, UT 84201                               Other Returns, to request an extension of 
                                                                                           time to file. Generally, the corporation 
Life insurance company              1120-L   If using a delivery service, requests for     must file Form 7004 by the regular due 
(section 801)                                waivers should be mailed to:                  date of the return. See the Instructions for 
                                                                                           Form 7004.
Fund set up to pay for                       Internal Revenue Service
nuclear                             1120-ND  Ogden Submission Processing 
decommissioning costs                        Center                                        Who Must Sign
(section 468A)                                                                             The return must be signed and dated by:
                                             Attn: Form 1120 e-file Waiver 
Property and casualty                        Request                                       • The president, vice president, treasurer, 
insurance company                   1120-PC  Mail Stop 1057                                assistant treasurer, chief accounting 
(section 831)                                1973 N. Rulon White Blvd.                     officer; or
                                             Ogden, UT 84404                               • Any other corporate officer (such as tax 
Political organization              1120-POL                                               officer) authorized to sign.
(section 527)
                                             Waiver requests can also be faxed to            If a return is filed on behalf of a 
                                             877-477-0575. Contact the e-Help Desk at      corporation by a receiver, trustee, or 
trust (section 856)
Real estate investment         1120-REIT     866-255-0654 for questions regarding the      assignee, the fiduciary must sign the 
                                             waiver procedures or process.                 return, instead of the corporate officer. 
Regulated investment                1120-RIC                                               Returns and forms signed by a receiver or 
company (section 851)                        For more information, see Guidance on 
                                             Waivers for Corporations Unable to Meet       trustee in bankruptcy on behalf of a 
S corporation (section              1120-S   e-file Requirements on IRS.gov.               corporation must be accompanied by a 
1361)                                                                                      copy of the order or instructions of the 
                                                                                           court authorizing signing of the return or 
Settlement fund                     1120-SF  When To File                                  form.
(section 468B)                               Generally, a corporation must file its 
                                             income tax return by the 15th day of the      Paid Preparer Use Only section.       If an 
                                             4th month after the end of its tax year. A    employee of the corporation completes 
Electronic Filing                            new corporation filing a short-period return  Form 1120, the paid preparer section 
Corporations can generally electronically    must generally file by the 15th day of the    should remain blank. Anyone who 
file (e-file) Form 1120, related forms,      4th month after the short period ends. A      prepares Form 1120 but does not charge 
schedules, and attachments; Form 7004        corporation that has dissolved must           the corporation should not complete that 
(automatic extension of time to file); and   generally file by the 15th day of the 4th     section. Generally, anyone who is paid to 
Forms 940, 941, and 944 (employment tax      month after the date it dissolved.            prepare the return must sign and complete 
returns). If there is a balance due, the                                                   the section.
corporation can authorize an electronic      However, a corporation with a fiscal tax        The paid preparer must complete the 
funds withdrawal while e-filing. Form 1099   year ending June 30 must file by the 15th     required preparer information and:
and other information returns can also be    day of the 3rd month after the end of its     • Sign the return in the space provided 
electronically filed. The option to e-file   tax year. A corporation with a short tax      for the preparer's signature,
                                             year ending anytime in June will be           • Include their Preparer Tax Identification 
                                             treated as if the short year ended on June    Number (PTIN), and

Instructions for Form 1120                                      -3-

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• Give a copy of the return to the 
taxpayer.                                      Where To File
      A paid preparer may sign original        File the corporation's return at the applicable IRS address listed below.
TIP   or amended returns by rubber 
      stamp, mechanical device, or             If the corporation's principal  And the total assets at 
computer software program.                     business, office, or agency     the end of the tax year 
                                               is located in:                  are:                    Use the following address:
Paid Preparer                                  Connecticut, Delaware, District Less than $10 million   Department of the Treasury
                                               of Columbia, Georgia, Illinois, and Schedule M-3 is not Internal Revenue Service Center
Authorization                                  Indiana, Kentucky, Maine,              filed            Kansas City, MO 64999-0012 
If the corporation wants to allow the IRS to   Maryland, Massachusetts,        $10 million or more, or Department of the Treasury
discuss its 2022 tax return with the paid      Michigan, New Hampshire,        less than $10 million and Internal Revenue Service Center
preparer who signed it, check the “Yes”        New Jersey, New York, North     Schedule M-3 is filed   Ogden, UT 84201-0012
box in the signature area of the return.       Carolina, Ohio, Pennsylvania, 
This authorization applies only to the         Rhode Island, South Carolina, 
individual whose signature appears in the      Tennessee, Vermont, Virginia, 
“Paid Preparer Use Only” section of the        West Virginia, Wisconsin
return. It does not apply to the firm, if any, 
shown in that section.                         Alabama, Alaska, Arizona, 
                                               Arkansas, California, 
  If the “Yes” box is checked, the             Colorado, Florida, Hawaii, 
corporation is authorizing the IRS to call     Idaho, Iowa, Kansas, 
the paid preparer to answer any questions      Louisiana, Minnesota,                                   Department of the Treasury
that may arise during the processing of its    Mississippi, Missouri,               Any amount         Internal Revenue Service Center
return. The corporation is also authorizing    Montana, Nebraska, Nevada,                              Ogden, UT 84201-0012
the paid preparer to:                          New Mexico, North Dakota, 
• Give the IRS any information that is         Oklahoma, Oregon, South 
missing from the return;                       Dakota, Texas, Utah, 
• Call the IRS for information about the       Washington, Wyoming
processing of the return or the status of      A foreign country or U.S.                               Internal Revenue Service Center
any related refund or payment(s); and          possession                           Any amount         P.O. Box 409101
• Respond to certain IRS notices about                                                                 Ogden, UT 84409
math errors, offsets, and return 
preparation.                                   A group of corporations with members located in more than one service center area will often 
                                               keep all the books and records at the principal office of the managing corporation. In this case, 
  The corporation is not authorizing the       the tax returns of the corporations may be filed with the service center for the area in which the 
paid preparer to receive any refund check,     principal office of the managing corporation is located.
bind the corporation to anything (including 
any additional tax liability), or otherwise 
represent the corporation before the IRS.
                                               13.   Form 6252.                             withheld, attach such form(s) to the 
  The authorization will automatically end     14.   Form 8997.                             corporation’s income tax return to claim a 
no later than the due date (excluding                                                       withholding credit. The corporation should 
extensions) for filing the corporation's       15.   Additional schedules in                report the tax withheld on Schedule J, Part 
2023 tax return. If the corporation wants to   alphabetical order.                          III, line 20d. See the instructions for 
expand the paid preparer's authorization       16.   Additional forms in numerical order.   Schedule J, Part III, line 20d.
or revoke the authorization before it ends,    17.   Supporting statements and 
see Pub. 947, Practice Before the IRS and      attachments.                                 Tax Payments
Power of Attorney.                                                                          Generally, the corporation must pay any 
                                               Complete every applicable entry space 
Assembling the Return                          on Form 1120. Do not enter “See              tax due in full no later than the due date for 
                                               Attached” or “Available Upon Request”        filing its tax return (not including 
To ensure that the corporation's tax return                                                 extensions). See the instructions for 
                                               instead of completing the entry spaces. If 
is correctly processed, attach all                                                          line 35. If the due date falls on a Saturday, 
                                               more space is needed on the forms or 
schedules and other forms after page 6 of                                                   Sunday, or legal holiday, the payment is 
                                               schedules, attach separate sheets using 
Form 1120 in the following order.                                                           due on the next day that isn't a Saturday, 
                                               the same size and format as the printed 
  1. Schedule N (Form 1120).                   forms.                                       Sunday, or legal holiday.
  2. Schedule D (Form 1120).                                                                Electronic Deposit 
                                               If there are supporting statements and 
  3. Form 4797.                                                                             Requirement
                                               attachments, arrange them in the same 
  4. Form 8949.                                order as the schedules or forms they         Corporations must use electronic funds 
  5. Form 8996.                                support and attach them last. Show the       transfer to make all federal tax deposits 
  6. Form 8050.                                totals on the printed forms. Enter the       (such as deposits of employment, excise, 
                                               corporation's name and EIN on each           and corporate income tax). Generally, 
  7. Form 1125-A.                              supporting statement or attachment.          electronic funds transfers are made using 
  8. Form 4136.                                                                             the Electronic Federal Tax Payment 
  9. Form 8978.                                Note. If the corporation had tax withheld    System (EFTPS). However, if the 
                                               under Chapter 3 or 4 of the Internal         corporation does not want to use EFTPS, 
  10. Form 965-B.                              Revenue Code and received a Form             it can arrange for its tax professional, 
  11. Form 8941.                               1042-S, Form 8805, or Form 8288-A            financial institution, payroll service, or 
  12. Form 3800.                               showing the amount of income tax             other trusted third party to make deposits 

                                                                   -4-                                 Instructions for Form 1120

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on its behalf. Also, it may arrange for its • If the corporation overpaid estimated income, social security, and Medicare
financial institution to submit a same-day tax, it may be able to get a quick refund by taxes that must be collected or withheld
payment (discussed below) on its behalf. filing Form 4466, Corporation Application are not collected or withheld, or these
EFTPS is a free service provided by the for Quick Refund of Overpayment of taxes are not paid. These taxes are
Department of the Treasury. Services Estimated Tax. See the instructions for generally reported on:
provided by a tax professional, financial Schedule J, Part III, line 15, later. • Form 720, Quarterly Federal Excise
institution, payroll service, or other third Tax Return;
party may have a fee. See section 6655 for more information • Form 941, Employer's QUARTERLY
on how to figure estimated taxes. Federal Tax Return;
To get more information about EFTPS • Form 943, Employer's Annual Federal
or to enroll in EFTPS, visit EFTPS.gov or Estimated tax penalty. A corporation Tax Return for Agricultural Employees;
call 800-555-4477. To contact EFTPS that does not make estimated tax • Form 944, Employer's ANNUAL
using the Telecommunications Relay payments when due may be subject to an Federal Tax Return; or
Services (TRS), for people who are deaf, underpayment penalty for the period of • Form 945, Annual Return of Withheld
hard of hearing, or have a speech underpayment. Generally, a corporation is Federal Income Tax.
disability, dial 711 and provide the TRS subject to the penalty if its tax liability is
assistant the 800-555-4477 number above $500 or more and it did not timely pay at The trust fund recovery penalty may be
or 800-733-4829. least the smaller of: imposed on all persons who are
Depositing on time. For any deposit • Its tax liability for the current year, or determined by the IRS to have been
made by EFTPS to be on time, the • Its prior year's tax. responsible for collecting, accounting for,
or paying over these taxes, and who acted
corporation must submit the deposit by 8 Use Form 2220, Underpayment of willfully in not doing so. The penalty is
p.m. Eastern time the day before the date Estimated Tax by Corporations, to see if equal to the full amount of the unpaid trust
the deposit is due. If the corporation uses the corporation owes a penalty and to fund tax. See the Instructions for Form
a third party to make deposits on its figure the amount of the penalty. If Form 720, Pub. 15 (Circular E), Employer's Tax
behalf, they may have different cutoff 2220 is completed, enter the penalty on Guide, or Pub. 51 (Circular A), Agricultural
times. line 34. See the instructions for line 34. Employer's Tax Guide, for details,
Same-day wire payment option. If the including the definition of responsible
corporation fails to submit a deposit Interest and Penalties persons.
transaction on EFTPS by 8 p.m. Eastern If the corporation receives a notice Note. The trust fund recovery penalty will
time the day before the date a deposit is ! about penalties after it files its not apply to any amount of trust fund taxes
due, it can still make its deposit on time by CAUTION return, send the IRS an
an employer holds back in anticipation of
using the Federal Tax Collection Service explanation and we will determine if the the credit for qualified sick and family
(FTCS). To use the same-day wire corporation meets reasonable-cause leave wages or the employee retention
payment method, the corporation will need criteria. Do not attach an explanation credit that they are entitled to. See Pub. 15
to make arrangements with its financial when the corporation's return is filed. or Pub. 51 for more information.
institution ahead of time regarding
availability, deadlines, and costs. Interest. Interest is charged on taxes Other penalties. Other penalties can be
Financial institutions may charge a fee for paid late even if an extension of time to file imposed for negligence, substantial
payments made this way. To learn more is granted. Interest is also charged on understatement of tax, reportable
about the information the corporation will penalties imposed for failure to file, transaction understatements, and fraud.
need to provide to its financial institution to negligence, fraud, substantial valuation See sections 6662, 6662A, and 6663.
make a same-day wire payment, go to misstatements, substantial
IRS.gov/SameDayWire. understatements of tax, and reportable
transaction understatements from the due Accounting Methods
Estimated Tax Payments date (including extensions) to the date of Figure taxable income using the method of
payment. The interest charge is figured at accounting regularly used in keeping the
Generally, the following rules apply to the a rate determined under section 6621. corporation's books and records. In all
corporation's payments of estimated tax. Late filing of return. A corporation that cases, the method used must clearly show
• The corporation must make installment does not file its tax return by the due date, taxable income. Permissible methods
payments of estimated tax if it expects its including extensions, may be penalized include cash, accrual, or any other method
total tax for the year (less applicable 5% of the unpaid tax for each month or authorized by the Internal Revenue Code.
credits) to be $500 or more. part of a month the return is late, up to a
• The installments are due by the 15th maximum of 25% of the unpaid tax. The Generally, the following rules apply. For
day of the 4th, 6th, 9th, and 12th months minimum penalty for a return that is more more information, see Pub. 538,
of the tax year. If any date falls on a than 60 days late is the smaller of the tax Accounting Periods and Methods.
Saturday, Sunday, or legal holiday, the due or $450. The penalty will not be • A corporation, or a partnership that has
installment is due on the next regular imposed if the corporation can show that a corporation as a partner, cannot use the
business day. the failure to file on time was due to cash method of accounting unless it is a
• The corporation must use electronic reasonable cause. See Caution, earlier. small business taxpayer (defined later). A
funds transfer to make installment tax shelter (defined in section 448(d)(3))
Late payment of tax. A corporation that
payments of estimated tax. may never use the cash method. See
does not pay the tax when due may sections 448(a)(1) through (a)(3).
generally be penalized / of 1% of the
• If, after the corporation figures and 1 2 However, see Nonaccrual experience
deposits estimated tax, it finds that its tax
unpaid tax for each month or part of a
liability for the year will be more or less method for service providers in the
month the tax is not paid, up to a
than originally estimated, it may have to instructions for line 1a.
maximum of 25% of the unpaid tax. See
refigure its required installments. If earlier • Unless it is a small business taxpayer
Caution, earlier.
installments were underpaid, the (defined below), a corporation must use
corporation may owe a penalty. See Trust fund recovery penalty. This an accrual method for sales and
Estimated tax penalty, later. penalty may apply if certain excise,

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purchases of inventory items. See the December 22, 2019. See section 481(d). filed, whichever is later. Keep records that
instructions for Form 1125-A. Also, see the Instructions for Form 3115. verify the corporation's basis in property
• A corporation engaged in farming must Exceptions to the general section for as long as they are needed to figure
use an accrual method. For exceptions, 481(a) adjustment period may apply. Also, the basis of the original or replacement
see section 447 and Pub. 225. in some cases, a corporation can elect to property.
• Special rules apply to long-term modify the section 481(a) adjustment The corporation should keep copies of
contracts. See section 460. period. The corporation may have to all filed returns. They help in preparing
• Dealers in securities must use the complete the appropriate lines of Form future and amended returns and in the
mark-to-market accounting method. 3115 to make an election. See the calculation of earnings and profits.
Dealers in commodities and traders in Instructions for Form 3115 for more
securities and commodities can elect to information and exceptions. Other Forms and
use the mark-to-market accounting
method. See section 475. If the net section 481(a) adjustment is
positive, report the ratable portion on Form Statements That May Be
Small business taxpayer. For tax years 1120, line 10, as other income. If the net Required
beginning in 2022, a corporation qualifies section 481(a) adjustment is negative, Amended return. Use Form 1120-X,
as a small business taxpayer if (a) it has report the ratable portion on line 26 as a Amended U.S. Corporation Income Tax
average annual gross receipts of $27 deduction. Return, to correct a previously filed Form
million or less for the 3 prior tax years, and 1120.
(b) it is not a tax shelter (as defined in Accounting Period
section 448(d)(3)). A corporation must figure its taxable Reportable transaction disclosure
A small business taxpayer can account income on the basis of a tax year. A tax statement. Disclose information for each
for inventory by (a) treating the inventory year is the annual accounting period a reportable transaction in which the
as non-incidental materials and supplies, corporation uses to keep its records and corporation participated. Form 8886,
or (b) conforming to its treatment of report its income and expenses. Reportable Transaction Disclosure
inventory in an applicable financial Generally, corporations can use a Statement, must be filed for each tax year
statement (as defined in section 451(b) calendar year or a fiscal year. Personal that the federal income tax liability of the
(3)). If it does not have an applicable service corporations, however, must use a corporation is affected by its participation
financial statement, it can use the method calendar year unless they meet one of the in the transaction. The following are
of accounting used in its books and exceptions discussed later under Personal reportable transactions.
records prepared according to its Service Corporation. 1. Any listed transaction, which is a
accounting procedures. transaction that is the same as or
Change of tax year. Generally, a substantially similar to one of the types of
Change in accounting method. corporation, including a personal service transactions that the IRS has determined
Generally, the corporation must get IRS corporation, must get the consent of the to be a tax avoidance transaction and
consent to change either an overall IRS before changing its tax year by filing identified by notice, regulation, or other
method of accounting or the accounting Form 1128, Application To Adopt, published guidance as a listed
treatment of any material item for income Change, or Retain a Tax Year. However, transaction.
tax purposes. To obtain consent, the exceptions may apply. See the
corporation must generally file Form 3115, Instructions for Form 1128 and Pub. 538 2. Any transaction offered under
Application for Change in Accounting for more information. conditions of confidentiality for which the
Method, during the tax year for which the corporation (or a related party) paid an
advisor a fee of at least $250,000.
change is requested. See the Instructions Rounding Off to
for Form 3115 and Pub. 538 for more 3. Certain transactions for which the
information and exceptions. Also see the Whole Dollars corporation (or a related party) has
Instructions for Form 3115 for procedures The corporation may enter decimal points contractual protection against
that may apply for obtaining automatic and cents when completing its return. disallowance of the tax benefits.
consent to change certain methods of However, the corporation should round off 4. Certain transactions resulting in a
accounting, non-automatic change cents to whole dollars on its return, forms, loss of at least $10 million in any single
procedures, and reduced Form 3115 filing and schedules to make completing its year or $20 million in any combination of
requirements. return easier. The corporation must either years.
round off all amounts on its return to whole
Section 481(a) adjustment. If the dollars, or use cents for all amounts. To 5. Any transaction identified by the
corporation's taxable income for the round, drop amounts under 50 cents and IRS by notice, regulation, or other
current tax year is figured under a method increase amounts from 50 to 99 cents to published guidance as a “transaction of
of accounting different from the method the next dollar. For example, $8.40 rounds interest.”
used in the preceding tax year, the to $8 and $8.50 rounds to $9. For more information, see Regulations
corporation may have to make an
adjustment under section 481(a) to If two or more amounts must be added section 1.6011-4. Also, see the
prevent amounts of income or expense to figure the amount to enter on a line, Instructions for Form 8886.
from being duplicated or omitted. The include cents when adding the amounts Penalties. The corporation may have
section 481(a) adjustment period is and round off only the total. to pay a penalty if it is required to disclose
generally 1 year for a net negative a reportable transaction under section
adjustment and 4 years for a net positive Recordkeeping 6011 and fails to properly complete and
adjustment. For an eligible terminated S Keep the corporation's records for as long file Form 8886. Penalties may also apply
corporation, the section 481(a) adjustment as they may be needed for the under section 6707A if the corporation
period is generally 6 years for a negative administration of any provision of the fails to file Form 8886 with its corporate
or positive adjustment that is attributable Internal Revenue Code. Usually, records return, fails to provide a copy of Form
to the S corporation's revocation of its that support an item of income, deduction, 8886 to the Office of Tax Shelter Analysis
election under section 1362(a) after or credit on the return must be kept for 3 (OTSA), or files a form that fails to include
December 21, 2017, and before years from the date the return is due or all the information required (or includes

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incorrect information). Other penalties,       basis in the stock received instead of       (3) of Rev. Proc. 2021-48, and for what tax 
such as an accuracy-related penalty under      reducing the transferee corporation's        year, as applicable;
section 6662A, may also apply. See the         basis in the property transferred. Once         3. The amount of tax-exempt income 
Instructions for Form 8886 for details on      made, the election is irrevocable. For       from forgiveness of the PPP loan that the 
these and other penalties.                     more information, see section 362(e)(2)      corporation is treating as received or 
                                               and Regulations section 1.362-4. If an 
Reportable transactions by material                                                         accrued and for which tax year; and
                                               election is made, a statement must be 
advisors. Material advisors to any                                                             4. Whether forgiveness of the PPP 
                                               filed in accordance with Regulations 
reportable transaction must disclose                                                        loan has been granted as of the date the 
                                               section 1.362-4(d)(3).
certain information about the reportable                                                    return is filed.
transaction by filing Form 8918 with the       Annual information reporting by speci-
IRS. For details, see the Instructions for     fied domestic entities under section            A corporation that reported tax-exempt 
Form 8918.                                     6038D. Certain domestic corporations         income from the forgiveness of a PPP loan 
                                               that are formed or availed of to hold        on its 2020 return, the timing of which 
Transfers to a corporation controlled                                                       corresponds to one of the options 
                                               specified foreign financial assets 
by the transferor. Every significant                                                        presented in Rev. Proc. 2021-48, need not 
                                               (“specified domestic entities”) must file 
transferor (as defined in Regulations                                                       file an amended return solely to attach the 
                                               Form 8938. Form 8938 must be filed each 
section 1.351-3(d)(1)) that receives stock                                                  statement that is described in these 
                                               year the value of the corporation's 
of a corporation in exchange for property                                                   instructions.
                                               specified foreign financial assets is more 
in a nonrecognition event must include the 
                                               than $50,000 on the last day of the tax         If a corporation treats tax-exempt 
statement required by Regulations section 
                                               year or more than $75,000 at any time        income resulting from a PPP loan as 
1.351-3(a) on or with the transferor's tax 
                                               during the tax year. For more information    received or accrued prior to when 
return for the tax year of the exchange. 
                                               on domestic corporations that are            forgiveness of the PPP loan is granted and 
The transferee corporation must include 
                                               specified domestic entities and the types    the amount of forgiveness granted is less 
the statement required by Regulations 
                                               of foreign financial assets that must be     than the amount of tax-exempt income 
section 1.351-3(b) on or with its return for 
                                               reported, see the Instructions for Form      that was previously treated as received or 
the tax year of the exchange, unless all the 
                                               8938, generally, and in particular, Who      accrued, the corporation should make a 
required information is included in any 
                                               Must File Specified Domestic Entity,  ,      prior period adjustment on Schedule M-2 
statement(s) provided by a significant 
                                               Specified Foreign Financial Assets,          for the tax year in which the corporation 
transferor that is attached to the same 
                                               Interests in Specified Foreign Financial     receives notice that the PPP loan was not 
return for the same section 351 exchange. 
                                               Assets Assets Not Required To Be ,           fully forgiven. See the instructions for 
If the transferor or transferee corporation 
                                               Reported, and Exceptions to Reporting.       Schedule M-2 for more details.
is a controlled foreign corporation (CFC), 
each U.S. shareholder (within the meaning      In addition, a domestic corporation          Other forms and statements.   See Pub. 
of section 951(b)) must include the            required to file Form 8938 with its Form     542, Corporations, for a list of other forms 
required statement on or with its return.      1120 for the taxable year should check       and statements a corporation may need to 
                                               “Yes” to Schedule N (Form 1120),             file in addition to the forms and statements 
Distributions under section 355.     Every     Question 8, and also include that schedule   discussed throughout these instructions.
corporation that makes a distribution of       with its Form 1120.
stock or securities of a controlled 
corporation, as described in section 355       Form 8975. Certain U.S. persons that are 
(or so much of section 356 as it relates to    the ultimate parent entity of a U.S.         Specific Instructions
section 355), must include the statement       multinational enterprise group with annual 
required by Regulations section                revenue for the preceding reporting period   Period Covered
1.355-5(a) on or with its return for the year  of $850 million or more are required to file File the 2022 return for calendar year 2022 
of the distribution. A significant distributee Form 8975, Country-by-Country Report.        and fiscal years that begin in 2022 and 
(as defined in Regulations section             Form 8975 and Schedule A (Form 8975)         end in 2023. For a fiscal or short tax year 
1.355-5(c)) that receives stock or             must be filed with the income tax return of  return, fill in the tax year space at the top 
securities of a controlled corporation must    the ultimate parent entity of a U.S.         of the form.
include the statement required by              multinational enterprise group for the tax      The 2022 Form 1120 can also be used 
Regulations section 1.355-5(b) on or with      year in or within which the reporting period if:
its return for the year of receipt. If the     covered by Form 8975 ends. For more             The corporation has a tax year of less 
distributing or distributee corporation is a   information, see Form 8975, Schedule A       •
                                                                                            than 12 months that begins and ends in 
CFC, each U.S. shareholder (within the         (Form 8975) and the Instructions for Form    2023, and
meaning of section 951(b)) must include        8975, and Schedule A (Form 8975).               The 2023 Form 1120 is not available at 
                                                                                            •
the statement on or with its return.           Paycheck Protection Program (PPP)            the time the corporation is required to file 
Dual consolidated losses.  If a domestic       loans. A corporation that has tax-exempt     its return.
corporation incurs a dual consolidated         income resulting from the forgiveness of a   The corporation must show its 2023 tax 
loss (as defined in Regulations section        PPP loan should attach a statement to its    year on the 2022 Form 1120 and take into 
1.1503(d)-1(b)(5)), the corporation (or        return reporting each tax year for which     account any tax law changes that are 
consolidated group) may need to attach a       the corporation is applying Rev. Proc.       effective for tax years beginning after 
domestic use agreement and/or an annual        2021-48, sections 3.01(1), (2), or (3). Any  December 31, 2022.
certification, as provided in Regulations      statement for the current tax year should 
section 1.1503(d)-6(d) and (g).                include the following information, for each  Name and Address
                                               PPP loan:
Election to reduce basis under section                                                      Enter the corporation's true name (as set 
362(e)(2)(C). If property is transferred to    1. The corporation's name, address,          forth in the charter or other legal document 
a corporation subject to section 362(e)(2),    and EIN;                                     creating it), address, and EIN on the 
the transferor and the transferee              2. A statement that the corporation is       appropriate lines. Enter the address of the 
corporation may elect, under section           applying or applied section 3.01(1), (2), or corporation's principal office or place of 
362(e)(2)(C), to reduce the transferor's                                                    business. Include the suite, room, or other 
                                                                                            unit number after the street address. If the 

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post office does not deliver mail to the The corporation does not have to If a section 444 election is terminated
street address and the corporation has a TIP provide the information requested and the termination results in a short tax
P.O. box, show the box number instead. in (3), (4), and (5), above, if its year, type or print at the top of the first
total receipts (line 1a plus lines 4 through page of Form 1120 for the short tax year
Note. Do not use the address of the 10 on page 1 of the return) and its total “SECTION 444 ELECTION
registered agent for the state in which the assets at the end of the tax year TERMINATED.”
corporation is incorporated. For example, (Schedule L, line 15(d)) are less than
if a business is incorporated in Delaware $250,000. See Schedule K, Question 13. Schedule M-3 (Form 1120)
or Nevada and the corporation's principal A corporation with total assets
office is located in Little Rock, Arkansas, For more information on consolidated (nonconsolidated or consolidated for all
the corporation should enter the Little returns, see the regulations under section corporations included within a
Rock address. 1502. consolidated tax group) of $10 million or
more on the last day of the tax year must
If the corporation receives its mail in Life-Nonlife Consolidated file Schedule M-3 (Form 1120) instead of
care of a third party (such as an Return Schedule M-1. A corporation filing Form
accountant or an attorney), enter on the 1120 that is not required to file
street address line “C/O” followed by the If Item A, box 1a, is checked and the
third party's name and street address or corporation is the common parent of a Schedule M-3 may voluntarily file
P.O. box. consolidated group that includes a life Schedule M-3 instead of Schedule M-1.
insurance company, also check box 1b.
If the corporation has a foreign See Regulations section 1.1502-47(m) for Corporations that (a) are required to file
address, include the city or town, state or the requirements for filing a consolidated Schedule M-3 (Form 1120) and have less
province, country, and foreign postal tax return for a life-nonlife consolidated than $50 million total assets at the end of
code. Do not abbreviate the country group. the tax year, or (b) are not required to file
name. Follow the country's practice for Schedule M-3 (Form 1120) and voluntarily
entering the name of the state or province Personal Holding Company file Schedule M-3 (Form 1120), must
and postal code. A personal holding company must check either (i) complete Schedule M-3 (Form
Item A, box 2, and attach Schedule PH 1120) entirely, or (ii) complete
Item A. Identifying (Form 1120), U.S. Personal Holding Schedule M-3 (Form 1120) through Part I,
Company (PHC) Tax. See the Instructions and complete Form 1120, Schedule M-1,
Information for Schedule PH (Form 1120) for details. instead of completing Parts II and III of
Schedule M-3 (Form 1120). If the
Consolidated Return Personal Service Corporation corporation chooses to complete
Corporations filing a consolidated return If the corporation is a personal service Schedule M-1 instead of completing Parts
must check Item A, box 1a, and attach corporation, check Item A, box 3. A II and III of Schedule M-3, the amount on
Form 851, Affiliations Schedule, and other personal service corporation is a Schedule M-1, line 1, must equal the
supporting statements to the return. Also, corporation whose principal activity for the amount on Schedule M-3, Part I, line 11.
for the first year a subsidiary corporation is testing period is the performance of See the Instructions for Schedule M-3
being included in a consolidated return, personal services. The testing period for a (Form 1120) for more details. Also, see
attach Form 1122 to the parent's tax year is generally the prior tax year the instructions for Schedule M-1, later.
consolidated return. Attach a separate unless the corporation has just been
Form 1122 for each new subsidiary being formed. Personal services include any If you are filing Schedule M-3, check
included in the consolidated return. activity performed in the fields of Item A, box 4, to indicate that
File supporting statements for each accounting, actuarial science, Schedule M-3 is attached.
corporation included in the consolidated architecture, consulting, engineering,
return. Do not use Form 1120 as a health, law, and the performing arts. The Item B. Employer
supporting statement. On the supporting services must be substantially performed Identification Number
statement, use columns to show the by employee-owners.
(EIN)
following, both before and after A personal service corporation must Enter the corporation's EIN. If the
adjustments. use a calendar tax year unless: corporation does not have an EIN, it must
1. Items of gross income and • It elects to use a 52-53-week tax year apply for one. An EIN can be applied for:
deductions. that ends with reference to the calendar • Online—Go to IRS.gov/EIN. The EIN is
2. A computation of taxable income. year or tax year elected under section issued immediately once the application
444; information is validated.
and end of the tax year. •
3. Balance sheets, as of the beginning It can establish a business purpose for • By faxing or mailing Form SS-4,
a different tax year and obtains the Application for Employer Identification
4. A reconciliation of income per approval of the IRS (see the Instructions Number.
books with income per return. for Form 1128 and Pub. 538); or
5. A reconciliation of retained • It elects under section 444 to have a tax Corporations located in the United
earnings. year other than a calendar year. To make ! States or U.S. possessions can
the election, use Form 8716, Election To CAUTION use the online application. Foreign
Enter on Form 1120 the totals for each Have a Tax Year Other Than a Required corporations should call 267-941-1099
item of income, gain, loss, expense, or Tax Year. (not a toll free number) for more
deduction, net of eliminating entries for information on obtaining an EIN. See the
intercompany transactions between If a corporation makes the section 444 Instructions for Form SS-4.
corporations within the consolidated election, its deduction for certain amounts
group. Attach consolidated balance paid to employee-owners may be limited. EIN applied for, but not received. If the
sheets and a reconciliation of See Schedule H (Form 1120), Section corporation has not received its EIN by the
consolidated retained earnings. 280H Limitations for a Personal Service time the return is due, enter “Applied For”
Corporation (PSC), to figure the maximum and the date the corporation applied in the
deduction. space for the EIN. However, if the

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corporation is filing its return electronically, defined in section 1353) at the highest gross sales, (b) cost of goods sold, (c)
an EIN is required at the time the return is corporate tax rate. If the election is made, gross profits, (d) percentage of gross
filed. An exception applies to subsidiaries the corporation generally may not claim profits to gross sales, (e) amount
of corporations whose returns are filed any loss, deduction, or credit with respect collected, and (f) gross profit on the
with the parent's electronically filed to qualifying shipping activities. A amount collected.
consolidated Form 1120. These corporation making this election may also For sales of timeshares and residential
subsidiaries should enter “Applied For” in elect to defer gain on the disposition of a lots reported under the installment
the space for the EIN on their returns. The qualifying vessel. method, if the corporation elects to pay
subsidiaries' returns are identified under Use Form 8902, Alternative Tax on interest under section 453(I)(3), the
the parent corporation's EIN. Qualifying Shipping Activities, to figure the corporation's income tax is increased by
For more information, see the tax. Include the alternative tax on the interest payable under section 453(l)
Instructions for Form SS-4. Schedule J, Part I, line 9e. (3). Report this addition to the tax on
Schedule J, Part I, line 9f.
Line 1. Gross Receipts or Sales
Item D. Total Assets Nonaccrual experience method for
Enter the corporation's total assets (as Line 1a. Gross receipts or sales. Enter service providers. Accrual method
determined by the accounting method on line 1a gross receipts or sales from all corporations are not required to accrue
regularly used in keeping the corporation's business operations, except for amounts certain amounts to be received from the
books and records) at the end of the tax that must be reported on lines 4 through performance of services that, based on
year. If there are no assets at the end of 10. their experience, will not be collected, if:
the tax year, enter -0-. Special rules apply to certain income, • The services are in the fields of health,
as discussed below. law, engineering, architecture, accounting,
If the corporation is required to actuarial science, performing arts or
complete Schedule L, enter the total Advance payments. In general,
consulting; or
assets from Schedule L, line 15, column advance payments are reported in the
(d), on page 1, Item D. If filing a year of receipt. For exceptions to this • The corporation meets the section
448(c) gross receipts test for all prior
consolidated return, report total general rule for corporations that use the
years.
consolidated assets for all corporations accrual method of accounting, see the
joining in the return. following. This provision does not apply to any
• To report income from long-term amount if interest is required to be paid on
Item E. Initial Return, Final contracts, see section 460. the amount or if there is any penalty for
• For rules that allow a limited deferral of failure to timely pay the amount. See
Return, Name Change, or advance payments beyond the current tax Regulations section 1.448-3 for more
Address Change year, see section 451(c). Also, see information on the nonaccrual experience
• If this is the corporation's first return, Regulations sections 1.451-8(c), (d), and method, including information on safe
check the “Initial return” box. (e). For applicability dates, see harbor methods.
• If this is the corporation's final return Regulations section 1.451-8(h). For information on a book safe harbor
and it will no longer exist, check the “Final • For information on adopting or method of accounting for corporations that
return” box. changing to a permissible method for use the nonaccrual experience method of
• If the corporation changed its name reporting advance payments for services accounting, see Rev. Proc. 2011-46,
since it last filed a return, check the “Name and certain goods by an accrual method 2011-42 I.R.B. 518 available at
change” box. Generally, a corporation corporation, see the Instructions for Form IRS.gov/irb/2011-42_IRB#RP-2011-46, or
must also have amended its articles of 3115. any successor. Also, see the Instructions
for Form 3115 for procedures to obtain
incorporation and filed the amendment Installment sales. Generally, the
automatic consent to change to this
with the state in which it was incorporated. installment method cannot be used for
method or make certain changes within
• If the corporation has changed its dealer dispositions of property. A “dealer
this method.
address since it last filed a return disposition” is any disposition of (a)
(including a change to an “in care of” personal property by a person who Corporations that qualify to use the
address), check the “Address change” regularly sells or otherwise disposes of nonaccrual experience method should
box. personal property of the same type on the attach a statement showing total gross
installment plan, or (b) real property held receipts, the amount not accrued because
Note. If a change in address or for sale to customers in the ordinary of the application of section 448(d)(5), and
responsible party occurs after the return is course of the taxpayer's trade or business. the net amount accrued. Enter the net
filed, use Form 8822-B, Change of amount on line 1a.
Address or Responsible Party— The restrictions on using the
Business, to notify the IRS. See the installment method do not apply to the Line 1b. Returns and allowances.
instructions for Form 8822-B for details. following. Enter cash and credit refunds the
• Dispositions of property used or corporation made to customers for
produced in the trade or business of returned merchandise, rebates, and other
Income farming. allowances made on gross receipts or
Except as otherwise provided in the • Certain dispositions of timeshares and sales.
Internal Revenue Code, gross income residential lots reported under the
includes all income from whatever source installment method for which the Line 2. Cost of Goods Sold
derived. corporation elects to pay interest under Complete and attach Form 1125-A, Cost
section 453(I)(3). of Goods Sold, if applicable. Enter on
Exception for income from qualifying Enter on line 1a (and carry to line 3) the Form 1120, line 2, the amount from Form
shipping activities. Gross income does gross profit on collections from these 1125-A, line 8. See Form 1125-A and its
not include income from qualifying installment sales. Attach a statement instructions.
shipping activities if the corporation makes showing the following information for the
an election under section 1354 to be taxed current and the 3 preceding years: (a)
on its notional shipping income (as

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Line 4. Dividends and substantially all the assets of a foreign sick and family leave wages in gross
branch are transferred to a specified 10% income for the tax year that includes the
Inclusions
owned foreign corporation (as defined in last day of any calendar quarter in which
See the instructions for Schedule C, later. section 245A(b)) with respect to which the the credit is allowed.
Complete Schedule C and enter on line 4 corporation was a U.S. shareholder
the amount from Schedule C, line 23, immediately after the transfer. See section Note. A credit is available only if the leave
column (a). 91. was taken after March 31, 2020, and
Line 5. Interest • Any LIFO recapture amount under before October 1, 2021, and only after the
section 1363(d). The corporation may qualified leave wages were paid, which
Enter taxable interest on U.S. obligations have to include a LIFO recapture amount might, under certain circumstances, not
and on loans, notes, mortgages, bonds, in income if it: occur until a quarter after September 30,
bank deposits, corporate bonds, tax 2021, including quarters in 2022.
refunds, etc. Do not offset interest 1. Used the LIFO inventory method
expense against interest income. Special for its last tax year before the first tax year
rules apply to interest income from certain for which it elected to become an S
below-market-rate loans. See section corporation, or Deductions
7872 for details. 2. Transferred LIFO inventory assets Limitations on Deductions
to an S corporation in a nonrecognition Uniform capitalization rules. The
Note. Report tax-exempt interest on transaction in which those assets were uniform capitalization rules of section
Schedule K, item 9. Also, if required, transferred basis property. 263A require corporations to capitalize
include the same amount on certain costs to inventory or other
Schedule M-1, line 7, or Schedule M-3 The LIFO recapture amount is the
(Form 1120), Part II, line 13, if applicable. amount by which the C corporation's property. Corporations subject to the
inventory under the FIFO method exceeds section 263A uniform capitalization rules
Line 6. Gross Rents the inventory amount under the LIFO are required to capitalize:
Enter the gross amount received for the method at the close of the corporation's 1. Direct costs of assets produced or
rental of property. Deduct expenses such last tax year as a C corporation (or for the acquired for resale, and
as repairs, interest, taxes, and year of the transfer, if (2) above applies). 2. Certain indirect costs (including
depreciation on the proper lines for Also, see the instructions for Schedule J, taxes) that are properly allocable to
deductions. A rental activity held by a Part I, line 11. property produced or property acquired for
closely held corporation or a personal • The ratable portion of any net positive resale.
service corporation may be subject to the section 481(a) adjustment. See Section
passive activity loss rules. See Passive 481(a) adjustment, earlier. The corporation cannot deduct the
activity limitations, later. • Part or all of the proceeds received costs required to be capitalized under
from certain corporate-owned life section 263A until it sells, uses, or
Line 10. Other Income insurance contracts issued after August otherwise disposes of the property (to
Enter any other taxable income not 17, 2006. Corporations that own one or which the costs relate). The corporation
reported on lines 1 through 9. List the type more employer-owned life insurance recovers these costs through
and amount of income on an attached contracts issued after this date must file depreciation, amortization, or cost of
statement. If the corporation has only one Form 8925, Report of Employer-Owned goods sold.
item of other income, describe it in Life Insurance Contracts. See Form 8925. A small business taxpayer (defined
parentheses on line 10. • Income from cancellation of debt (COD) earlier) is not required to capitalize costs
from the repurchase of a debt instrument under section 263A. A small business
Examples of other income to report on for less than its adjusted issue price. taxpayer that wants to discontinue
line 10 include the following. • The corporation's share of the following capitalizing costs under section 263A
• Recoveries of bad debts deducted in income from Form 8621, Information must change its method of accounting.
prior years under the specific charge-off Return by a Shareholder of a Passive See section 263A(i) and Regulations
method. Foreign Investment Company or Qualified section 1.263A-1(j). Also, see the
• The amount included in income from Electing Fund. Instructions for Form 3115.
Form 6478, Biofuel Producer Credit. 1. Ordinary earnings of a qualified
• The amount included in income from electing fund. For more information on the uniform
Form 8864, Biodiesel, Renewable Diesel, capitalization rules, see Pub. 538. Also,
or Sustainable Aviation Fuels Credit. 2. Gain or loss from marking passive see Regulations sections 1.263A-1
• Refunds of taxes deducted in prior foreign investment company (PFIC) stock through 1.263A-3. See section 263A(d),
years to the extent they reduced the to market. Regulations section 1.263A-4, and Pub.
amount of tax imposed. See section 111 3. Gain or loss from sale or other 225 for rules for property produced in a
and the related regulations. Do not offset disposition of section 1296 stock. farming business.
current year taxes against tax refunds. 4. Excess distributions from a section Transactions between related taxpay-
• Ordinary income from trade or business 1291 fund allocated to the current year ers. Generally, an accrual basis taxpayer
activities of a partnership (from and pre-PFIC years, if any. can only deduct business expenses and
Schedule K-1 (Form 1065)). Do not offset
ordinary losses against ordinary income. See Form 8621 and the Instructions for interest owed to a related party in the year
Instead, include the losses on line 26. Form 8621 for details. the payment is included in the income of
Show the partnership's name, address, • The amount of payroll tax credit taken the related party. See sections 163(e)(3)
and EIN on a separate statement attached by an employer on its 2022 employment and 267(a)(2) for limitations on deductions
to this return. If the amount entered is from tax returns (Forms 941, 943, and 944) for for unpaid interest and expenses.
more than one partnership, identify the qualified paid sick and qualified paid Limitations on business interest ex-
amount from each partnership. family leave under FFCRA and ARP (both pense. Business interest expense may
• The transferred loss amount identified the nonrefundable and refundable be limited. See section 163(j) and Form
as “Section 91 Transferred Loss Amount,” portions). The corporation must include 8990. Also, see Limitation on deduction in
which is required to be recognized when the full amount of the credit for qualified the instructions for line 18 and

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Schedule K, Question 23 and Question Generally, the two kinds of passive • Credit for small employer health
24, later. activities are: insurance premiums (Form 8941).
Section 291 limitations. Corporations • Trade or business activities in which the • Employer credit for paid family and
corporation did not materially participate medical leave (Form 8994).
may be required to adjust deductions for
for the tax year; and
depletion of iron ore and coal, intangible If the corporation has any of the credits
drilling and exploration and development • Rental activities, regardless of its listed above, figure the current year credit
participation.
costs, certain deductions for financial before figuring the deduction for expenses
For exceptions, see Form 8810, Corporate
institutions, and the amortizable basis of on which the credit is based. If the
Passive Activity Loss and Credit
pollution control facilities. See section 291 corporation capitalized any costs on which
Limitations.
to determine the amount of the it figured the credit, it may need to reduce
adjustment. Corporations subject to the passive the amount capitalized by the credit
activity limitations must complete Form attributable to these costs.
Election to deduct business start-up 8810 to compute their allowable passive See the instructions for the form used
and organizational costs. A corporation activity loss and credit. Before completing to figure the applicable credit for more
can elect to deduct a limited amount of Form 8810, see Temporary Regulations details.
start-up and organizational costs it paid or section 1.163-8T, which provides rules for
incurred. Any remaining costs must allocating interest expense among Limitations on deductions related to
generally be amortized over a 180-month activities. If a passive activity is also property leased to tax-exempt entities.
period. See sections 195 and 248 and the subject to the at-risk rules of section 465 If a corporation leases property to a
related regulations. or the tax-exempt use loss rules of section governmental or other tax-exempt entity,
Time for making an election. The 470, those rules apply before the passive the corporation cannot claim deductions
corporation generally elects to deduct loss rules. related to the property to the extent that
they exceed the corporation's income from
start-up or organizational costs by For more information, see section 469,
the lease payments. This disallowed
claiming the deduction on its income tax the related regulations, and Pub. 925,
tax-exempt use loss can be carried over to
return filed by the due date (including Passive Activity and At-Risk Rules.
the next tax year and treated as a
extensions) for the tax year in which the
active trade or business begins. For more Closely held corporations. A deduction with respect to the property for
details, including special rules for costs corporation is a closely held corporation if: that tax year. See section 470(d) for
paid or incurred before September 9, • At any time during the last half of the tax exceptions.
2008, see the Instructions for Form 4562. year more than 50% in value of its Limitation on tax benefits for remuner-
Also, see Pub. 535, Business Expenses. outstanding stock is directly or indirectly ation under the Patient Protection and
owned by or for not more than five Affordable Care Act. The $1 million
If the corporation timely filed its return individuals, and compensation limit is reduced to $500,000
for the year without making an election, it • The corporation is not a personal for remuneration for services provided by
can still make an election by filing an service corporation. individuals for or on behalf of certain
amended return within 6 months of the
due date of the return (excluding Certain organizations are treated as health insurance providers. The $500,000
extensions). Clearly indicate the election individuals for purposes of this test. See limitation applies to remuneration that is
on the amended return and write “Filed section 542(a)(2). For rules for deductible in the tax year during which the
pursuant to section 301.9100-2” at the top determining stock ownership, see section services were performed and
of the amended return. File the amended 544 (as modified by section 465(a)(3)). remuneration for services during the year
return at the same address the corporation Reducing certain expenses for which that is deductible in a future tax year
filed its original return. The election credits are allowable. If the corporation (called "deferred deduction
applies when figuring taxable income for claims certain credits, it may need to remuneration"). The $500,000 limitation is
the current tax year and all subsequent reduce the otherwise allowable reduced by any amounts disallowed as
years. deductions for expenses used to figure the excess parachute payments. See section
The corporation can choose to forgo credit. This applies to credits such as the 162(m)(6) and Regulations section
the elections above by affirmatively following. 1.162-31 for definitions and other special
electing to capitalize its start-up or • Work opportunity credit (Form 5884). rules.
organizational costs on its income tax • Credit for increasing research activities Line 12. Compensation of
return filed by the due date (including (Form 6765).
extensions) for the tax year in which the • Orphan drug credit (Form 8820). Officers
active trade or business begins. • Disabled access credit (Form 8826). Enter deductible officers' compensation
• Empowerment zone employment credit on line 12. Do not include compensation
Note. The election to either amortize or (Form 8844). deductible elsewhere on the return, such
capitalize start-up costs is irrevocable and • Indian employment credit (Form 8845). as amounts included in cost of goods sold,
applies to all start-up costs that are related • Credit for employer social security and elective contributions to a section 401(k)
to the trade or business. Medicare taxes paid on certain employee cash or deferred arrangement, or amounts
Report the deductible amount of tips (Form 8846). contributed under a salary reduction SEP
start-up and organizational costs and any • Credit for small employer pension plan agreement or a SIMPLE IRA plan.
amortization on line 26. For amortization start-up costs (Form 8881). If the corporation's total receipts
that begins during the current tax year, • Credit for employer-provided childcare (line 1a, plus lines 4 through 10) are
complete and attach Form 4562, facilities and services (Form 8882). $500,000 or more, complete Form
Depreciation and Amortization. • Low sulfur diesel fuel production credit 1125-E, Compensation of Officers. Enter
(Form 8896). on Form 1120, line 12, the amount from
Passive activity limitations. Limitations • Mine rescue team training credit (Form Form 1125-E, line 4.
on passive activity losses and credits 8923).
under section 469 apply to personal • Credit for employer differential wage Line 13. Salaries and Wages
service corporations (defined earlier) and payments (Form 8932). Enter the total salaries and wages paid for
closely held corporations (defined later). the tax year. Do not include salaries and

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wages deductible elsewhere on the return, an amount includible in income called the • Taxes assessed against local benefits
such as amounts included in officers' inclusion amount. The corporation may that increase the value of the property
compensation, cost of goods sold, have an inclusion amount if: assessed (such as for paving, etc.).
elective contributions to a section 401(k) • Taxes deducted elsewhere on the
cash or deferred arrangement, or amounts And the vehicle's return, such as those reflected in cost of
contributed under a salary reduction SEP FMV on the first goods sold.
agreement or a SIMPLE IRA plan. day of the lease
The lease term began: exceeded: See section 164(d) for information on
If the corporation provided taxable apportionment of taxes on real property
fringe benefits to its employees, such as Cars (excluding trucks between seller and purchaser.
personal use of a car, do not deduct as and vans) Do not reduce the corporation's
wages the amount allocated for After 12/31/21 but before ! deduction for social security and
depreciation and other expenses claimed 1/1/23 . . . . . . . . . . $56,000 CAUTION Medicare taxes by the
on lines 20 and 26. nonrefundable and refundable portions of
After 12/31/20 but before
If the corporation claims a credit 1/1/22 . . . . . . . . . . $51,000 the FFCRA and ARP credits for qualified
sick and family leave wages claimed on its
CAUTION may need to reduce any
! for any wages paid or incurred, it After 12/31/17 but before employment tax returns. Instead, report
1/1/21 . . . . . . . . . . $50,000
corresponding deduction for officers' this amount as income on line 10.
compensation and salaries and wages. After 12/31/12 but before
See Reducing certain expenses for which 1/1/18 . . . . . . . . . . $19,000 Line 18. Interest
credits are allowable, earlier. After 12/31/07 but before
1/1/13 . . . . . . . . . . $18,500 Note. Do not offset interest income
Line 14. Repairs and Trucks and vans against interest expense.
The corporation must make an interest
Maintenance After 12/31/21 but before allocation if the proceeds of a loan were
Enter the cost of repairs and maintenance 1/1/23 . . . . . . . . . . $56,000
used for more than one purpose (for
not claimed elsewhere on the return, such After 12/31/20 but before example, to purchase a portfolio
as labor and supplies, that are not 1/1/22 . . . . . . . . . . $51,000 investment and to acquire an interest in a
payments to produce or improve tangible passive activity). See Temporary
or real property. See Regulations After 12/31/17 but before
1.263(a)-1. For example, amounts are 1/1/21 . . . . . . . . . . $50,000 Regulations section 1.163-8T for the
paid for improvements if they are for After 12/31/13 but before interest allocation rules.
betterments to the property, restorations 1/1/18 . . . . . . . . . . $19,500 Mutual savings banks, building and
of the property (such as the replacements After 12/31/09 but before loan associations, and cooperative banks
of major components or substantial 1/1/14 . . . . . . . . . . $19,000 can deduct the amounts paid or credited
structural parts), or if they adapt the to the accounts of depositors as
property to a new or different use. After 12/31/08 but before dividends, interest, or earnings. See
1/1/10 . . . . . . . . . . $18,500
Amounts paid to produce or improve section 591.
property must be capitalized. See After 12/31/07 but before
Regulations sections 1.263(a)-2 and (a)-3. 1/1/09 . . . . . . . . . . $19,000 Do not deduct the following interest.
• Interest on indebtedness incurred or
The corporation can deduct repair and continued to purchase or carry obligations
maintenance expenses only to the extent if the interest is wholly exempt from
they relate to a trade or business activity. income tax. See section 265(b) for special
See Regulations section 1.162-4. The rules and exceptions for financial
corporation may elect to capitalize certain institutions. Also, see section 265(b)(7) for
repair and maintenance costs consistent See Pub. 463, Travel, Gift, and Car a de minimis exception for financial
with its books and records. See Expenses, for instructions on figuring the institutions for certain tax-exempt bonds
Regulations section 1.263(a)-3(n) for inclusion amount. issued in 2009 and 2010.
information on how to make the election. • For cash basis taxpayers, prepaid
Note. The inclusion amount for lease interest allocable to years following the
Line 15. Bad Debts terms beginning in 2023 will be published current tax year. For example, a cash
Enter the total debts that became in the Internal Revenue Bulletin in early basis calendar year taxpayer who in 2022
worthless in whole or in part during the tax 2023. prepaid interest allocable to any period
year. A small bank or thrift institution using after 2022 can deduct only the amount
the reserve method of section 585 should Line 17. Taxes and Licenses allocable to 2022.
attach a statement showing how it figured Enter taxes paid or accrued during the tax • Interest and carrying charges on
the current year's provision. A corporation year, but do not include the following. straddles. Generally, these amounts must
that uses the cash method of accounting • Federal income taxes. be capitalized. See section 263(g).
cannot claim a bad debt deduction unless • Foreign or U.S. possession income • Interest on debt allocable to the
the amount was previously included in taxes if a foreign tax credit is claimed. production of designated property by a
income. • Taxes not imposed on the corporation. corporation for its own use or for sale. The
• Taxes, including state or local sales corporation must capitalize this interest.
Line 16. Rents taxes, that are paid or incurred in Also, capitalize any interest on debt
If the corporation rented or leased a connection with an acquisition or allocable to an asset used to produce the
vehicle, enter the total annual rent or lease disposition of property (these taxes must property. See section 263A(f) and
expense paid or incurred during the year. be treated as a part of the cost of the Regulations sections 1.263A-8 through
Also, complete Part V of Form 4562. If the acquired property or, in the case of a 1.263A-15 for definitions and more
corporation leased a vehicle for a term of disposition, as a reduction in the amount information.
30 days or more, the deduction for vehicle realized on the disposition). • Interest paid or incurred on any portion
lease expense may have to be reduced by of an underpayment of tax that is

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attributable to an understatement arising date the resolution was adopted. See communication from the donee
from an undisclosed listed transaction or section 170(a)(2)(B). organization indicating the name of the
an undisclosed reportable avoidance organization, the date of the contribution,
Limitation on deduction. Generally, the
transaction (other than a listed and the amount of the contribution.
total amount claimed cannot be more than
transaction) entered into in tax years
10% of taxable income (line 30) computed Contributions of $250 or more. A
beginning after October 22, 2004.
without regard to the following. corporation can deduct a contribution of
Special rules apply to: • Any deduction for contributions. $250 or more only if it gets a written
• Forgone interest on certain • The special deductions on line 29b. acknowledgment from the donee
below-market-rate loans (see section • The limitation under section 249 on the organization that shows the amount of
7872). deduction for bond premium. cash contributed, describes any property
• Original issue discount (OID) on certain • Any net operating loss (NOL) carryback contributed (but not its value), and either
high yield discount obligations. See to the tax year under section 172. gives a description and a good faith
section 163(e)(5) to determine the amount • Any capital loss carryback to the tax estimate of the value of any goods or
of the deduction for OID that is deferred year under section 1212(a)(1). services provided in return for the
and the amount that is disallowed on a • Deduction for income attributable to contribution or states that no goods or
high yield discount obligation. The rules domestic production activities of specified services were provided in return for the
under section 163(e)(5) do not apply to agricultural or horticultural cooperatives. contribution. The acknowledgment must
be obtained by the due date (including
certain high yield discount obligations Carryover. Charitable contributions over
extensions) of the corporation's return, or,
issued after August 31, 2008, and before the 10% limitation cannot be deducted for
if earlier, the date the return is filed. Do not
January 1, 2011. See section 163(e)(5) the tax year but can be carried over to the
attach the acknowledgment to the tax
(F). next 5 tax years. See the exception below
return, but keep it with the corporation's
• Interest which is allocable to for farmers and ranchers and certain
records.
unborrowed policy cash values of life Native Corporations.
insurance, endowment, or annuity Contributions of property other than
contracts issued after June 8, 1997. See Special rules apply if the corporation
section 264(f). Attach a statement has an NOL carryover to the tax year. In cash. If a corporation (other than a
showing the computation of the deduction. figuring the charitable contributions closely held or personal service
deduction for the current tax year, the 10% corporation) contributes property other
Limitation on deduction. Under section limit is applied using the taxable income than cash and claims over a $500
163(j), business interest expense is after taking into account any deduction for deduction for the property, it must attach a
generally limited to the sum of business the NOL. statement to the return describing the kind
of property contributed and the method
interest income, 30% of the adjusted To figure the amount of any remaining used to determine its FMV. Closely held
taxable income, and floor plan financing NOL carryover to later years, taxable corporations and personal service
interest. The amount of any business income must be modified (see section corporations must complete Form 8283,
interest expense that is not allowed as a 172(b)). To the extent that contributions Noncash Charitable Contributions, and
deduction for the tax year is carried are used to reduce taxable income for this attach it to their returns. All other
forward to the following year. If section purpose and increase an NOL carryover, a corporations must generally complete and
163(j) applies, use Form 8990 to figure the contributions carryover is not allowed. See attach Form 8283 to their returns for
amount of business interest expense the section 170(d)(2)(B). contributions of property (other than
corporation can deduct for the current tax
year and the amount that can be carried Suspension of 10% limitation for farm- money) if the total claimed deduction for
forward to the next year. See the ers and ranchers and certain Native all property contributed was more than
Instructions for Form 8990. Also see Corporations. Certain corporations can $5,000. Special rules apply to the
Schedule K, Question 23 and Question deduct contributions of qualified contribution of certain property. See the
24, later. conservation property without regard to Instructions for Form 8283.
the general 10% limit. This applies to:
Qualified conservation
Line 19. Charitable • A qualified farmer or rancher (as
contributions. Special rules apply to
Contributions defined in section 170(b)(1)(E)(v)) that
qualified conservation contributions,
Enter contributions or gifts actually paid does not have publicly traded stock; and
including contributions of certain
within the tax year to or for the use of • A Native Corporation (as defined in
easements on buildings located in a
charitable and governmental section 170(b)(2)(C)(iii)) that contributes
registered historic district. See section
organizations described in section 170(c) property which was land conveyed under
170(h) and Pub. 526, Charitable
and any unused contributions carried over the Alaska Native Claims Settlement Act.
Contributions.
from prior years. Special rules and limits The total amount of the contribution
apply to contributions to organizations claimed for the qualified conservation Other special rules. The corporation
conducting lobbying activities. See section property cannot exceed 100% of the must reduce its deduction for contributions
170(f)(9). excess of the corporation's taxable of certain capital gain property. See
income (as computed above substituting sections 170(e)(1) and 170(e)(5).
Corporations reporting taxable income “100%” for “10%” ) over all other allowable A larger deduction is allowed for certain
on the accrual method can elect to treat as charitable contributions. Any excess contributions including:
paid during the tax year any contributions qualified conservation contributions can • Inventory and other property to certain
paid by the due date for filing the be carried over to the next 15 years, organizations for use in the care of the ill,
corporation’s tax return (not including subject to the 100% limitation. See needy, or infants (see section 170(e)(3)),
extensions), if the contributions were sections 170(b)(2)(B) and (C). including qualified contributions of
authorized by the board of directors during “apparently wholesome food”; and
the tax year. Attach a declaration to the Cash contributions. For contributions of
return stating that the resolution cash, check, or other monetary gifts • Scientific equipment used for research
authorizing the contributions was adopted (regardless of the amount), the to institutions of higher learning or to
by the board of directors during the tax corporation must maintain a bank record, certain scientific research organizations
year. The declaration must include the or a receipt, letter, or other written (other than by personal holding

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companies and service organizations). computerized ERISA Filing Acceptance • Insurance premiums.
See section 170(e)(4). System (EFAST2). For more information, • Legal and professional fees.
see the EFAST2 website at • Supplies used and consumed in the
For more information on charitable www.EFAST.dol.gov. business.
contributions, including substantiation and Travel, meals, and entertainment
recordkeeping requirements, see section Form 5500-EZ, Annual Return of A •
expenses. Special rules apply (discussed
170 and the related regulations and Pub. One-Participant (Owners/Partners and
later).
526. For other special rules that apply to Their Spouses) Retirement Plan or A
corporations, see Pub. 542. Foreign Plan. File this form for a plan that • Utilities.
only covers the owner (or the owner and • Ordinary losses from trade or business
activities of a partnership (from
Line 20. Depreciation spouse) or a foreign plan that is required
Schedule K-1 (Form 1065)). Do not offset
Include on line 20 depreciation and the to file an annual return and does not file
ordinary income against ordinary losses.
cost of certain property that the the annual return electronically on Form
Instead, include the income on line 10.
corporation elected to expense under 5500-SF. See the Instructions for Form
Show the partnership's name, address,
section 179 from Form 4562. Include 5500-EZ.
amounts not claimed on Form 1125-A or and EIN on a separate statement attached
elsewhere on the return. See Form 4562 Line 24. Employee Benefit to this return. If the amount is from more
and the Instructions for Form 4562. Programs than one partnership, identify the amount
from each partnership.
Line 21. Depletion Enter contributions to employee benefit • Any extraterritorial income exclusion
programs not claimed elsewhere on the (from Form 8873).
See sections 613 and 613A for return (for example, insurance or health • Any net negative section 481(a)
percentage depletion rates applicable to and welfare programs) that are not an adjustment, or in the case of an eligible
natural deposits. Also, see section 291 for incidental part of a pension, profit-sharing, terminated S corporation, the ratable
the limitation on the depletion deduction etc., plan included on line 23. portion of any negative section 481(a)
for iron ore and coal (including lignite).
Line 26. Other Deductions adjustment. See Section 481(a)
Attach Form T (Timber), Forest adjustment, earlier.
Activities Schedule, if a deduction for Attach a statement, listing by type and Dividends paid in cash on stock held by
•
depletion of timber is taken. amount, all allowable deductions that are an employee stock ownership plan.
not deductible elsewhere on Form 1120. However, a deduction may be taken for
Foreign intangible drilling costs and Enter the total on line 26. these dividends only if, according to the
foreign exploration and development costs
must either be added to the corporation's Examples of other deductions include plan, the dividends are:
basis for cost depletion purposes or be the following. See Pub. 535 for details on 1. Paid in cash directly to the plan
deducted ratably over a 10-year period. other deductions that may apply to participants or beneficiaries;
See sections 263(i), 616, and 617 for corporations. 2. Paid to the plan, which distributes
details. • Amortization. See Part VI of Form 4562. them in cash to the plan participants or
• Any applicable deduction under section their beneficiaries no later than 90 days
See Pub. 535 for more information on 179D for costs of energy efficient after the end of the plan year in which the
depletion. commercial building property placed in dividends are paid;
service during the tax year. Complete and
Line 23. Pension, attach new Form 7205. 3. At the election of such participants
Profit-Sharing, etc., Plans • Certain costs of a qualified film, or their beneficiaries (a) payable as
Enter the deduction for contributions to television, or live theatrical production provided under (1) or (2) above, or (b)
qualified pension, profit-sharing, or other commencing before January 1, 2026 (after paid to the plan and reinvested in
funded deferred compensation plans. December 31, 2015, and before January qualifying employer securities; or
Employers who maintain such a plan must 1, 2026, for a live theatrical production). 4. Used to make payments on a loan
generally file one of the forms listed below This deduction does not apply to any described in section 404(a)(9).
unless exempt from filing under portion of the aggregate cost of the
regulations or other applicable guidance, production above $15 million. There is a See section 404(k) for more details and
even if the plan is not a qualified plan higher allowance for production in certain the limitation on certain dividends.
under the Internal Revenue Code. The areas. See section 181 and the related Do not deduct expenses such as the
filing requirement applies even if the regulations. following.
corporation does not claim a deduction for Note. Certain film, television, or live • Amounts paid or incurred to, or at the
the current tax year. There are penalties theatrical productions acquired and direction of, a government or
for failure to file these forms on time and placed in service after September 27, governmental entity for the violation, or
for overstating the pension plan deduction. 2017 (for which a deduction would have investigation or inquiry into the potential
See sections 6652(e) and 6662(f). Also, been allowable under section 181 without violation, of a law. However, see Fines or
see the instructions for the applicable regard to the dollar limitation), are similar penalties, later.
form. qualified property eligible for the special • Any amount that is allocable to a class
depreciation allowance under section of exempt income. See section 265(b) for
Form 5500, Annual Return/Report of 168(k). See the Instructions for Form exceptions.
Employee Benefit Plan. 4562. • Lobbying expenses. However, see
Form 5500-SF, Short Form Annual • Certain business start-up and exceptions discussed later.
Return/Report of Small Employee Benefit organizational costs (discussed earlier, • Amounts paid or incurred for any
Plan. File this form instead of Form 5500 under Limitations on Deductions). settlement, payout, or attorney fees
generally if there were under 100 • Reforestation costs. The corporation related to sexual harassment or sexual
participants at the beginning of the plan can elect to deduct up to $10,000 of abuse, if such payments are subject to a
year. qualifying reforestation expenses for each nondisclosure agreement. See section
qualified timber property. The corporation 162(q).
Note. Form 5500 and Form 5500-SF can elect to amortize over 84 months any
must be filed electronically under the amount not deducted. See Pub. 535.

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Travel, meals, and entertainment. membership dues in civic or public service Lobbying expenses. Generally,
Subject to limitations and restrictions organizations, professional organizations lobbying expenses are not deductible.
discussed below, a corporation can (such as bar and medical associations), These expenses include:
deduct ordinary and necessary travel, business leagues, trade associations, • Amounts paid or incurred in connection
meal, and non-entertainment expenses chambers of commerce, boards of trade, with influencing federal, state, or local
paid or incurred in its trade or business. and real estate boards. However, no legislation; or
Generally, entertainment expenses, deduction is allowed if a principal purpose • Amounts paid or incurred in connection
membership dues, and facilities used in of the organization is to entertain or with any communication with certain
connection with these activities cannot be provide entertainment facilities for federal executive branch officials in an
deducted. In addition, no deduction is members or their guests. In addition, attempt to influence the official actions or
generally allowed for qualified corporations cannot deduct membership positions of the officials. See Regulations
transportation fringe benefits. Special dues in any club organized for business, section 1.162-29 for the definition of
rules apply to deductions for gifts, luxury pleasure, recreation, or other social “influencing legislation.”
water travel, and convention expenses. purpose. This includes country clubs, golf
See section 274, Pub. 463, and Pub. 535 and athletic clubs, airline and hotel clubs, Dues and other similar amounts paid to
for details. and clubs operated to provide meals certain tax-exempt organizations may not
under conditions favorable to business be deductible. If certain in-house lobbying
Travel. The corporation cannot deduct discussion. expenditures do not exceed $2,000, they
travel expenses of any individual are deductible.
accompanying a corporate officer or Entertainment facilities. Generally,
employee, including a spouse or the corporation cannot deduct an expense Line 28. Taxable Income Before
dependent of the officer or employee, paid or incurred for a facility (such as a NOL Deduction and Special
unless: yacht or hunting lodge) used for an activity Deductions
• That individual is an employee of the usually considered entertainment,
corporation, and amusement, or recreation. At-risk rules. Generally, special at-risk
rules under section 465 apply to closely
• That individual’s travel is for a bona fide Amounts treated as compensation. held corporations (see Passive activity
business purpose and would otherwise be Generally, the corporation may be able to limitations, earlier) engaged in any activity
deductible by that individual. deduct otherwise nondeductible as a trade or business or for the
Meals. Generally, the corporation can entertainment, amusement, or recreation production of income. These corporations
deduct only 50% of the amount otherwise expenses if the amounts are treated as may have to adjust the amount on line 28.
allowable for non-entertainment related compensation to the recipient and (See below.)
meal expenses paid or incurred in its trade reported on Form W-2 for an employee or The at-risk rules do not apply to:
or business. However, the corporation can on Form 1099-NEC for an independent Holding real property placed in service
deduct 100% of business meal expenses contractor. •
by the taxpayer before 1987;
if the meals are food and beverages However, if the recipient is an officer, • Equipment leasing under sections
provided by a restaurant. This applies only director, beneficial owner (directly or 465(c)(4), (5), and (6); or
to amounts paid or incurred after indirectly), or other “specified individual” • Any qualifying business of a qualified
December 31, 2020, and before January (as defined in section 274(e)(2)(B) and corporation under section 465(c)(7).
1, 2023. Regulations section 1.274-9(b)), special However, the at-risk rules do apply to
Meals not separately stated from rules apply. the holding of mineral property.
entertainment are generally not Fines or similar penalties. Generally, If the at-risk rules apply, adjust the
deductible. In addition (subject to no deduction is allowed for fines or similar amount on this line for any section 465(d)
exceptions under section 274(k)(2)): penalties paid or incurred to, or at the losses. These losses are limited to the
• Meals must not be lavish or direction of, a government or amount for which the corporation is at risk
extravagant, and governmental entity for violating any law, for each separate activity at the close of
• An employee of the corporation must or for the investigation or inquiry into the the tax year. If the corporation is involved
be present at the meal. potential violation of a law, except: in one or more activities, any of which
See section 274(n)(3) for a special rule • Amounts that constitute restitution or incurs a loss for the year, report the losses
that applies to expenses for meals remediation of property, for each activity separately. Attach Form
consumed by individuals subject to the • Amounts paid to come into compliance 6198, At-Risk Limitations, showing the
hours of service limits of the Department with the law, amount at risk and gross income and
of Transportation. • Amounts paid or incurred as the result deductions for the activities with the
of orders or agreements in which no losses.
Qualified transportation fringes government or governmental entity is a
(QTFs). Generally, no deduction is party, and If the corporation sells or otherwise
allowed under section 274(a)(4) for QTFs • Amounts paid or incurred for taxes due. disposes of an asset or its interest (either
provided by employers to their employees. total or partial) in an activity to which the
QTFs are defined in section 132(f)(1) and No deduction is allowed unless the at-risk rules apply, determine the net profit
include: amounts are specifically identified in the or loss from the activity by combining the
• Transportation in a commuter highway order or agreement and the corporation gain or loss on the sale or disposition with
vehicle between the employee's residence establishes that the amounts were paid for the profit or loss from the activity. If the
and place of employment, that purpose. Also, any amount paid or corporation has a net loss, it may be
• Any transit pass, and incurred as reimbursement to the limited because of the at-risk rules.
• Qualified parking. government for the costs of any
investigation or litigation are not eligible for Treat any loss from an activity not
See section 274, Pub. 15-B and Pub. the exceptions and are nondeductible. allowed for the tax year as a deduction
535 for details. See section 162(f). allocable to the activity in the next tax
year.
Membership dues. The corporation
can deduct amounts paid or incurred for

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Line 29a. Net Operating Loss • The inversion gain of the corporation for figure the penalty amount, if any, and bill
the tax year, if the corporation is an the corporation. However, even if the
Deduction
expatriated entity or a partner in an corporation does not owe the penalty, it
A corporation can use the NOL incurred in expatriated entity. See section 7874(a). must complete and attach Form 2220 if:
one tax year to reduce its taxable income • The sum of the corporation's excess • The annualized income or adjusted
in another tax year. Enter on line 29a the inclusions from its residual interest in a method is used, or
total NOL carryovers from other tax years, REMIC from Schedules Q (Form 1066), • The corporation is a large corporation
but do not enter more than the line 2c, and the corporation's taxable (as defined in the Instructions for Form
corporation's taxable income (after special income determined solely with respect to 2220) computing its first required
deductions). Attach a statement showing its ownership and high-yield interests in installment based on the prior year's tax.
the computation of the NOL deduction. FASITs. See sections 860E(a) and 860J
Complete item 12 on Schedule K. (repealed). If Form 2220 is attached, check the box
on line 34, and enter any penalty on this
The following special rules apply. Net operating loss (NOL). If line 30 line.
• If an ownership change (described in (figured without regard to the items listed
section 382(g)) occurs, the amount of the above under minimum taxable income) is Line 35. Amount Owed
taxable income of a loss corporation that zero or less, the corporation may have an If the corporation cannot pay the full
may be offset by the pre-change NOL NOL that can be carried back or forward amount of tax owed, it can apply for an
carryovers may be limited. See section as a deduction to other tax years. installment agreement online. The
382 and the related regulations. A loss corporation can apply for an installment
corporation must include the information Only farming losses and losses of an
statement as provided in Regulations insurance company (other than a life agreement online if:
section 1.382-11(a) with its income tax insurance company) can be carried back. • It cannot pay the full amount shown on
return for each tax year that it is a loss The carryback period for these losses is 2 line 35,
corporation in which an ownership shift, years. For NOLs that can be carried back, • The total amount owed is $25,000 or
equity structure shift, or other transaction the corporation can elect to waive the less, and
described in Temporary Regulations carryback period and instead carry the • The corporation can pay the liability in
section 1.382-2T(a)(2)(i) occurs. If the NOL forward to future tax years. full in 24 months.
To apply using the Online Payment
corporation makes the See the instructions for Schedule K, Agreement Application, go to IRS.gov/
closing-of-the-books election, see Item 11 for information on making the OPA.
Regulations section 1.382-6(b). election to waive the carryback period.
The limitations under section 382 do See the Instructions for Form 1139 for Under an installment agreement, the
not apply to certain ownership changes other special rules and elections. corporation can pay what it owes in
after February 17, 2009, made pursuant to The NOL deduction for tax year 2022 monthly installments. There are certain
a restructuring plan under the Emergency cannot exceed the aggregate amount of conditions that must be met to enter into
Economic Stabilization Act of 2008. See NOLs arising in tax years beginning before and maintain an installment agreement,
section 382(n). January 1, 2018, carried to such year plus such as paying the liability within 24
For guidance in applying section 382 to the lesser of: months and making all required deposits
and timely filing tax returns during the
loss corporations whose instruments were 1. The aggregate amount of NOLs length of the agreement.
acquired by Treasury under certain arising in tax years beginning after
programs under the Emergency Economic December 31, 2017, carried to such tax If the installment agreement is
Stabilization Act of 2008, see Notice year; or accepted, the corporation will be charged
2010-2, 2010-2 I.R.B. 251. 2. 80% of the excess, if any, of a fee and it will be subject to penalties and
• If a corporation acquires control of taxable income determined without any interest on the amount of tax not paid by
another corporation (or acquires its assets NOL deduction, section 199A deduction, the due date of the return.
in a reorganization), the amount of or section 250 deduction, over any NOL Line 37
pre-acquisition losses that may offset carryover to the tax year from tax years
recognized built-in gain may be limited beginning before January 1, 2018. Enter the amount of any overpayment that
(see section 384). should be refunded or applied to next
• If a corporation elects the alternative tax An exception applies for NOLs of year's estimated tax.
on qualifying shipping activities under insurance companies other than life
section 1354, no deduction is allowed for insurance companies. The 80% taxable Note. This election to apply some or all of
an NOL attributable to the qualifying income limit does not apply to these the overpayment amount to the
shipping activities to the extent that the entities. See sections 172(b) and (f). corporation's 2023 estimated tax cannot
be changed at a later date.
loss is carried forward from a tax year Merchant Marine capital construction
preceding the first tax year for which the fund. To take a deduction for amounts Direct deposit of refund. If the
alternative tax election was made. See contributed to a capital construction fund corporation wants its refund directly
section 1358(b)(2). (CCF), reduce the amount that would deposited into its checking or savings
For more details on the NOL deduction, otherwise be entered on line 30 by the account at any U.S. bank or other financial
see section 172 and the Instructions for amount of the deduction. On the dotted institution instead of having a check sent
Form 1139. line next to the entry space, enter “CCF” to the corporation, complete Form 8050,
and the amount of the deduction. For Direct Deposit of Corporate Tax Refund,
Line 29b. Special Deductions more information, see section 7518. and attach it to the corporation's tax
See the instructions for Schedule C. return.
Line 32.
Line 30. Taxable Income Reserved for future use.
Minimum taxable income. The
corporation's taxable income cannot be Line 34. Estimated Tax Penalty
less than the largest of the following Generally, the corporation does not have
amounts. to file Form 2220 because the IRS can

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Line 3, Column (a) Also, include dividends received from a
Schedule C. Dividends, Enter the following. less-than-20%-owned FSC that:
Inclusions, and Special • Dividends received on certain • Are attributable to income treated as
Deductions debt-financed stock acquired after July 18, effectively connected with the conduct of a
For purposes of the 20% ownership test 1984, from domestic and foreign trade or business within the United States
on lines 1 through 7, the percentage of corporations subject to income tax that (excluding foreign trade income), and
stock owned by the corporation is based would otherwise be subject to the • Qualify for the 50% deduction under
on voting power and value of the stock. dividends-received deduction under section 245(c)(1)(B).
Preferred stock described in section section 243(a)(1), 243(c), or 245(a). Line 7, Column (a)
1504(a)(4) is not taken into account. Generally, debt-financed stock is stock Enter the U.S.-source portion of dividends
that the corporation acquired by incurring that:
Consolidated returns. Corporations a debt (for example, it borrowed money to Are received from 20%-or-more-owned
filing a consolidated return should see buy the stock). •
foreign corporations, and
Regulations sections 1.1502-13, • Dividends received from a RIC on Qualify for the 65% deduction under
1.1502-26, and 1.1502-27 before debt-financed stock. The amount of •
sections 243 and 245(a).
completing Schedule C. dividends eligible for the
Corporations filing a consolidated dividends-received deduction is limited by Also, include dividends received from a
return must not report as dividends on section 854(b). The corporation should 20%-or-more-owned FSC that:
Schedule C any amounts received from receive a notice from the RIC specifying Are attributable to income treated as
corporations within the consolidated the amount of dividends that qualify for the •
effectively connected with the conduct of a
group. Such dividends are eliminated in deduction. trade or business within the United States
consolidation rather than offset by the Line 3, Columns (b) and (c) (excluding foreign trade income), and
dividends-received deduction. • Qualify for the 65% deduction under
Dividends received on certain
Line 1, Column (a) debt-financed stock acquired after July 18, section 245(c)(1)(B).
Enter dividends (except those received on 1984, are not entitled to the full 50% or Line 8, Column (a)
certain debt-financed stock acquired after 65% dividends-received deduction under Enter dividends received from wholly
July 18, 1984—see section 246A) that section 243 or 245(a). The 50% or 65% owned foreign subsidiaries that are
are: deduction is reduced by a percentage that eligible for the 100% deduction under
• Received from less-than-20%-owned is related to the amount of debt incurred to section 245(b).
domestic corporations subject to income acquire the stock. See section 246A. Also,
tax, and see section 245(a) before making this In general, the deduction under section
• Qualified for the 50% deduction under computation for an additional limitation 245(b) applies to dividends paid out of the
section 243(a)(1). that applies to certain dividends received earnings and profits of a foreign
from foreign corporations. Attach a corporation for a tax year during which:
Also, include on line 1 the following. statement to Form 1120 showing how the • All of its outstanding stock is directly or
• Taxable distributions from an IC-DISC amount on line 3, column (c), was figured. indirectly owned by the domestic
or former DISC that are designated as corporation receiving the dividends, and
eligible for the 50% deduction and certain Line 4, Column (a) • All of its gross income from all sources
dividends of Federal Home Loan Banks. Enter dividends received on preferred is effectively connected with the conduct
See section 246(a)(2). stock of a less-than-20%-owned public of a trade or business within the United
• Dividends (except those received on utility that is subject to income tax and is States.
certain debt-financed stock acquired after allowed the 23.3% deduction provided in
July 18, 1984) from a regulated sections 244 and 247 (as affected by Line 9, Column (c)
investment company (RIC). The amount of P.L.113-295, Div. A, section 221(a)(41) Generally, line 9, column (c), cannot
dividends eligible for the (A), Dec. 19, 2014, 128 Stat. 4043) for exceed the amount from the Worksheet
dividends-received deduction under dividends paid. for Schedule C, line 9. However, in a year
section 243 is limited by section 854(b). in which an NOL occurs, this limitation
The corporation should receive a notice Line 5, Column (a) does not apply even if the loss is created
from the RIC specifying the amount of Enter dividends received on preferred by the dividends-received deduction. See
dividends that qualify for the deduction. stock of a 20%-or-more-owned public sections 172(d) and 246(b).
utility that is subject to income tax and is
Report so-called dividends or earnings allowed the 26.7% deduction provided in Line 10, Columns (a) and (c)
received from mutual savings banks, etc., sections 244 and 247 (as affected by Small business investment companies
as interest. Do not treat them as P.L.113-295, Div. A, section 221(a)(41) operating under the Small Business
dividends. (A), Dec. 19, 2014, 128 Stat. 4043) for Investment Act of 1958 must enter
Line 2, Column (a) dividends paid. dividends that are received from domestic
corporations subject to income tax even
Enter on line 2: Line 6, Column (a) though a deduction is allowed for the
• Dividends (except those received on Enter the U.S.-source portion of dividends entire amount of those dividends. To claim
certain debt-financed stock acquired after that: the 100% deduction on line 10, column
July 18, 1984) that are received from Are received from (c), the company must file with its return a
20%-or-more-owned domestic •
less-than-20%-owned foreign statement that it was a federal licensee
corporations subject to income tax and corporations, and under the Small Business Investment Act
that are subject to the 65% deduction Qualify for the 50% deduction under of 1958 at the time it received the
under section 243(c), and •
section 245(a). To qualify for the 50% dividends.
• Taxable distributions from an IC-DISC deduction, the corporation must own at
or former DISC that are considered least 10% of the stock of the foreign Line 11, Columns (a) and (c)
eligible for the 65% deduction. corporation by vote and value. Enter only dividends that qualify under
section 243(b) for the 100%

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                                                                                                                   Line 16c, Column (a)
                                                                                                                   Enter all other amounts included in income 
     Worksheet for Schedule C, line 9                                                Keep for Your Records         under section 951. This should equal the 
     1. Refigure Form 1120, page 1, line 28, without any adjustment under                                          sum of the amounts reported by the U.S. 
        section 1059 and without any capital loss carryback to the tax year under                                  shareholder on Form(s) 5471, Schedule I, 
        section 1212(a)(1)     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1.       lines 1(c) through 1(h), 2, and 4.
     2. Complete lines 10, 11, 12, and 13, column (c), and enter the total 
        here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2.       Line 17, Column (a)
     3. Subtract line 2 from line 1 .    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      3.       Enter amounts included in income under 
                                                                                                                   section 951A. See Form 8992, Part II, 
     4. Multiply line 3 by 65% (0.65) .      . . . . . . . . . . . . . . . . . . . . . . . . . . . .      4.       line 5, and the Instructions for Form 8992. 
     5. Add lines 2, 5, 7, and 8, column (c), and the part of the deduction on                                     Also, if applicable, attach Form(s) 5471.
        line 3, column (c), that is attributable to dividends from 
        20%-or-more-owned corporations .             . . . . . . . . . . . . . . . . . . . . . . . .      5.       Note. Consider the applicability of section 
     6. Enter the smaller of line 4 or line 5. If line 5 is greater than line 4, stop                              951A with respect to CFCs owned by 
        here; enter the amount from line 6 on line 9, column (c), and do not                                       domestic partnerships in which the 
        complete the rest of this worksheet          . . . . . . . . . . . . . . . . . . . . . . . .      6.       corporation has an interest.
     7. Enter the total amount of dividends from 20%-or-more-owned 
        corporations that are included on lines 2, 3, 5, 7, and 8, column                                          Line 18, Column (a)
        (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     7.       Include gross-up for taxes deemed paid 
     8. Subtract line 7 from line 3 .    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      8.       under section 960.
     9. Multiply line 8 by 50% (0.50) .      . . . . . . . . . . . . . . . . . . . . . . . . . . . .      9.       Line 19, Column (a)
  10.   Subtract line 5 from line 9, column (c) .        . . . . . . . . . . . . . . . . . . . . . .   10.         Enter taxable distributions from an 
  11.   Enter the smaller of line 9 or line 10 .       . . . . . . . . . . . . . . . . . . . . . . .   11.         IC-DISC or former DISC that are 
  12. Dividends-received deduction after limitation (sec. 246(b)). Add                                             designated as not eligible for a 
        lines 6 and 11. Enter the result here and on line 9, column (c) .                . . . . . .   12.         dividends-received deduction.
                                                                                                                     No deduction is allowed under section 
                                                                                                                   243 for a dividend from an IC-DISC or 
dividends-received deduction described in                                Also, include on line 14 the              former DISC (as defined in section 992(a)) 
section 243(a)(3). Corporations taking this                          corporation's share of distributions from a   to the extent the dividend:
deduction are subject to the provisions of                           section 1291 fund from Form 8621, to the      • Is paid out of the corporation's 
section 1561.                                                        extent that the amounts are taxed as          accumulated IC-DISC income or 
  The 100% deduction does not apply to                               dividends under section 301. See Form         previously taxed income, or
affiliated group members that are joining in                         8621 and the Instructions for Form 8621.      • Is a deemed distribution under section 
                                                                                                                   995(b)(1).
the filing of a consolidated return.                                     Attach a statement identifying the 
                                                                     amount of each dividend reported on           Line 20, Column (a)
Line 12, Column (a)
                                                                     line 14 and the provision pursuant to         Include the following.
Enter dividends from FSCs that are                                   which a deduction is not allowed with 
                                                                                                                     1. Dividends (other than capital gain 
attributable to foreign trade income and                             respect to such dividend.
that are eligible for the 100% deduction                                                                           distributions reported on Schedule D 
provided in section 245(c)(1)(A).                                    Line 15, Column (a)                           (Form 1120) and exempt-interest 
                                                                     Reserved for future use.                      dividends) that are received from RICs 
Line 13, Column (a)                                                                                                and that are not subject to the 50% 
Enter the foreign-source portion of                                  Line 15, Column (c)                           deduction.
dividends that:                                                      Reserved for future use.                        2. Dividends from tax-exempt 
• Are received from specified                                                                                      organizations.
10%-owned foreign corporations (as                                   Line 16a, Column (a)
                                                                                                                     3. Dividends (other than capital gain 
defined in section 245A(b)), including, for                          Enter the foreign-source portion of any       distributions) received from a REIT that, 
example, gain from the sale of stock of a                            subpart F inclusions attributable to the      for the tax year of the trust in which the 
foreign corporation that is treated as a                             sale or exchange by a CFC of stock in         dividends are paid, qualifies under 
dividend under sections 1248(a) and (j);                             another foreign corporation described in      sections 856 through 860.
and                                                                  section 964(e)(4). This should equal the 
• Qualify for the section 245A deduction.                            sum of the amounts reported by the U.S.         4. Dividends not eligible for a 
                                                                     shareholder on Form(s) 5471, Schedule I,      dividends-received deduction, which 
Line 14, Column (a)                                                  line 1a. (Do not include on line 16a any      include the following.
Enter the foreign dividends not reportable                           portion of such subpart F inclusion that is     a. Dividends received on any share of 
on line 3, 6, 7, 8, 11, 12, or 13 of column                          not eligible for the section 245A deduction   stock held for less than 46 days during the 
(a).                                                                 pursuant to Regulations section               91-day period beginning 45 days before 
  Include on line 14 the foreign-source                              1.245A-5(g)(2). Include such amounts on       the ex-dividend date. When counting the 
portion of any dividend that does not                                line 16c.)                                    number of days the corporation held the 
                                                                                                                   stock, you cannot count certain days 
qualify for the section 245A deduction (for                          Line 16b, Column (a)                          during which the corporation's risk of loss 
example, hybrid dividends within the 
meaning of section 245A(e), ineligible                               Enter the total subpart F inclusions          was diminished. See section 246(c)(4) 
amounts of dividends within the meaning                              attributable to tiered hybrid dividends. This and Regulations section 1.246-5 for more 
of Regulations section 1.245A-5(b),                                  should equal the sum of the amounts           details.
dividends that fail to meet the holding                              reported by the U.S. shareholder on             b. Dividends received on any share of 
period requirement under section 246(c)                              Form(s) 5471, Schedule I, line 1b.            preferred stock which are attributable to 
(5), etc.).                                                                                                        periods totaling more than 366 days if 

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such stock was held for less than 91 days Line 2 intangible under the related person
during the 181-day period that began 90 exception to the anti-churning rules should
days before the ex-dividend date. When Multiply taxable income (page 1, line 30) include any additional tax due in the total
counting the number of days the by 21%. Enter this amount on line 2. for line 2. On the dotted line next to line 2,
corporation held the stock, you cannot enter “Section 197” and the amount. See
count certain days during which the Mutual savings bank conducting life section 197(f)(9)(B)(ii).
corporation's risk of loss was diminished. insurance business. The tax under
See section 246(c)(4) and Regulations section 594 consists of the sum of (a) a
section 1.246-5 for more details. Preferred partial tax computed on Form 1120 on the Line 3
dividends attributable to periods totaling taxable income of the bank, determined
less than 367 days are subject to the without regard to income or deductions If the corporation had gross receipts of at
46-day holding period rule discussed allocable to the life insurance department, least $500 million in any 1 of the 3 tax
above. and (b) a partial tax on the taxable income years preceding the current tax year,
computed on Form 1120-L of the life complete and attach Form 8991. Enter on
c. Dividends on any share of stock to insurance department. Enter the line 3 the base erosion minimum tax
the extent the corporation is under an combined tax on line 2. Attach Form amount from Form 8991, Part IV, line 5e.
obligation (including a short sale) to make 1120-L as a schedule (and identify it as See section 59A and the Instructions for
related payments with respect to positions such), together with the annual statements Form 8991. Also, see Schedule K,
in substantially similar or related property. and schedules required to be filed with Question 22, later.
5. Any other taxable dividend income Form 1120-L. See Regulations section
not properly reported elsewhere on 1.6012-2(c)(1)(ii). Line 5
Schedule C.
Exception for insurance companies Line 5a. To find out when a corporation
If patronage dividends or per-unit retain filing their federal income tax returns can take the credit for payment of income
allocations are included on line 20, identify electronically. If an insurance company tax to a foreign country or U.S.
the total of these amounts in a statement files its income tax return electronically, it possession, see Form 1118, Foreign Tax
attached to Form 1120. should not include the annual statements Credit—Corporations.
and schedules required to be filed with
Line 21, Column (c) Form 1120-L. However, such statements Line 5b. Enter any qualified electric
Section 247 (as affected by P.L.113-295, must be available at all times for vehicle passive activity credits from prior
Div. A, section 221(a)(41)(A), Dec. 19, inspection by the IRS and retained for so years allowed for the current tax year from
2014, 128 Stat. 4043) allows public long as such statements may be material Form 8834, Qualified Electric Vehicle
utilities a deduction of 40% of the smaller in the administration of any Internal Credit, line 7. Attach Form 8834. If
of (a) dividends paid on their preferred Revenue law. applicable, include on line 5b any credits
stock during the tax year, or (b) taxable from Form 5735, American Samoa
income computed without regard to this Deferred tax under section 1291. If the Economic Development Credit. See the
deduction. In a year in which an NOL corporation was a shareholder in a PFIC Instructions for Form 5735. Attach Form
occurs, compute the deduction without and received an excess distribution or 5735.
regard to section 247(a)(1)(B). disposed of its investment in the PFIC
during the year, it must include the Line 5c. Enter on line 5c the allowable
Line 22, Column (c) increase in taxes due under section credit from Form 3800, Part II, line 38.
Enter the section 250 deduction claimed 1291(c)(2) (from Form 8621) in the total The corporation is required to file Form
for foreign-derived intangible income for line 2. On the dotted line next to line 2, 3800, General Business Credit, to claim
(FDII) and global intangible low-taxed enter “Section 1291” and the amount. any of the business credits. See the
income (GILTI). This should equal the sum Do not include on line 2 any interest Instructions for Form 3800 for exceptions.
of the amounts on Form 8993, Part III, due under section 1291(c)(3). Instead, For a list of allowable credits, see Form
lines 28 and 29. include the amount of interest owed on 3800. Also, see the applicable credit form
Schedule J, Part I, line 9f. and its instructions.
For more information on reporting the Line 5d. Enter any allowable credit from
Schedule J. deferred tax and interest, see the Form 8827, Credit for Prior Year Minimum
Tax Computation and Instructions for Form 8621. Tax—Corporations. Complete and attach
Payment Increase in tax attributable to partner's Form 8827.
audit liability under section 6226. If the Line 5e. Enter the allowable credits from
Part I—Tax Computation corporation is filing Form 8978 to report Form 8912, Credit to Holders of Tax Credit
Line 1 adjustments shown on Form 8986 they Bonds, line 12.
received from partnerships that have been
If the corporation is a member of a audited and have elected to push out Line 6
controlled group, check the box on line 1. imputed underpayments to their partners,
Complete and attach Schedule O (Form include any increase in taxes due from
1120), Consent Plan and Apportionment Form 8978, line 14, in the total for Form Add lines 5a through 5e. Enter the total on
Schedule for a Controlled Group. 1120, Schedule J, line 2. On the dotted line 6.
Component members of a controlled line next to line 2, enter "FROM FORM Decrease attributable to partner's au-
group must use Schedule O to report the 8978" and the amount. Attach Form 8978. dit liability under section 6226. If the
apportionment of certain tax benefits If Form 8978, line 14, shows a decrease in corporation is filing Form 8978 to report
between the members of the group. See tax, see the instructions for Schedule J, adjustments shown on Form 8986 they
Schedule O and the Instructions for line 6. received from partnerships that have been
Schedule O for more information. Additional tax under section 197(f). A audited and have elected to push out
corporation that elects to recognize gain imputed underpayments to their partners,
and pay tax on the sale of a section 197 include any decrease in taxes due
(negative amount) from Form 8978,

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line 14, in the total for Form 1120, or to be refunded. See the Instructions for Subtract the following amounts from
Schedule J, line 6. On the dotted line next Form 8866. Include any interest due on the total for line 11.
to line 6, enter "FROM FORM 8978" and line 9d. • Deferred tax on the corporation's share
the amount. Attach Form 8978. If Form of undistributed earnings of a qualified
Line 9e. Alternative tax on qualifying
8978, line 14, shows an increase in tax, electing fund. See the Instructions for
shipping activities. Enter any alternative
see the instructions for Schedule J, line 2. Form 8621.
tax on qualifying shipping activities from
Form 8902. • Deferred LIFO recapture tax (section
Line 8 1363(d)). This tax is the part of the LIFO
Line 9f. Interest/tax due under section recapture tax that will be deferred and
453A(c) and/or section 453(l). Include paid with Form 1120-S in the future. To
A corporation is taxed as a personal any interest on deferred tax attributable to figure the deferred tax, first figure the total
holding company under section 542 if: certain nondealer installment obligations LIFO recapture tax. Follow the steps
• At least 60% of its adjusted ordinary (section 453A(c)) and dealer installment below to figure the total LIFO recapture tax
gross income for the tax year is personal obligations (section 453(l)). and the deferred amount. Also, see
holding company income, and Line 10. Other Income, earlier.
• At any time during the last half of the tax Line 9g. Other. Include on line 9g
year more than 50% in value of its additional taxes and interest such as the
outstanding stock is directly or indirectly following. Attach a statement showing the Step 1. Figure the tax on the
owned by five or fewer individuals. computation of each item included in the corporation's income including the LIFO
total for line 9g and identify the applicable recapture amount. Complete Schedule J,
See Schedule PH (Form 1120) for Code section and the type of tax or Part I, lines 1 through 10.
definitions and details on how to figure the interest.
tax. • Recapture of Indian employment credit. Step 2. Using a separate worksheet,
Generally, if an employer terminates the complete Schedule J again, but do not
employment of a qualified employee less include the LIFO recapture amount in the
Line 9 corporation's taxable income.
than 1 year after the date of initial
employment, any Indian employment
Include any of the following taxes and credit allowed for a prior tax year because Step 3. Compare the tax in Step 2 to
interest. of wages paid or incurred to that employee the tax in Step 1. The difference between
Line 9a. Recapture of investment cred- must be recaptured. For details, see Form the two is the LIFO recapture tax.
it. If the corporation disposed of 8845 and section 45A.
investment credit property or changed its • Recapture of new markets credit (see Step 4. Multiply the amount figured in
use before the end of its useful life or Form 8874, New Markets Credit, and Step 3 by 75% (0.75). The result is the
recovery period, or is required to Form 8874-B, Notice of Recapture Event deferred LIFO recapture tax.
recapture a qualifying therapeutic for New Markets Credit).
discovery project grant, enter the increase • Recapture of employer-provided How to report. Attach a statement
in tax from Form 4255, Recapture of childcare facilities and services credit (see showing the computation of each item
Investment Credit. See the Instructions for Form 8882). included in, or subtracted from, the total
Form 4255. • Tax and interest on a nonqualified for line 11. On the dotted line next to
withdrawal from a capital construction line 11, specify (a) the applicable Code
Line 9b. Recapture of low-income fund (section 7518(g)). section, (b) the type of tax, and (c) enter
housing credit. If the corporation • Interest due on deferred gain (section the amount of tax. For example, if the
disposed of property (or there was a 1260(b)). corporation is deferring a $100 LIFO
reduction in the qualified basis of the • Interest due under section 1291(c)(3). recapture tax, subtract this amount from
property) for which it took the low-income See Form 8621 and the Instructions for the total on line 11, then enter “Section
housing credit, and the corporation did not Form 8621. 1363—Deferred Tax—$100” on the dotted
follow the procedures that would have line next to line 11.
prevented recapture of the credit, it may Alternative minimum tax (AMT).
owe a tax. See Form 8611, Recapture of Applicable corporations subject to AMT Part II—Reserved For Future
Low-Income Housing Credit. under section 59(k), if filing a return for a Use
short tax year that begins in 2023 and
Line 9c. Interest due under the ends in 2023, include on line 9g any Line 12
look-back method—completed corporate AMT imposed under section 55,
long-term contracts. If the corporation as amended by the Inflation Reduction Act Reserved for future use.
used the percentage-of-completion of 2022. On the dotted line next to line 9g,
method under section 460(b) for certain enter “CAMT” and the AMT amount. Part III—Payments and
long-term contracts, figure any interest Attach a detailed statement showing the Refundable Credits
due or to be refunded using the look-back computation of the AMT. Include a
method, described in section 460(b)(2). computation of adjusted financial Line 14
Use Form 8697 to figure any interest due statement income. Label the statement
or to be refunded. See the Instructions for “CAMT.”
Form 8697. Include any interest due on Enter any estimated tax payments the
line 9c. corporation made for the tax year.
Line 11
Line 9d. Interest due under the Beneficiaries of trusts. If the
look-back method—income forecast Include any deferred tax on the corporation is the beneficiary of a trust,
method. If the corporation used the termination of a section 1294 election and the trust makes a section 643(g)
income forecast method to depreciate applicable to shareholders in a qualified election to credit its estimated tax
property, it must figure any interest due or electing fund in the amount entered on payments to its beneficiaries, include the
to be refunded using the look-back line 11. corporation's share of the payment in the
method, described in section 167(g)(2). total for line 14. Enter “T” and the amount
Use Form 8866 to figure any interest due on the dotted line next to the entry space.

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Line 15 For this purpose, the term “stock”
Schedule K. generally does not include any stock that
If the corporation overpaid estimated tax, it Other Information (a) is nonvoting, (b) is nonconvertible,
(c) is limited and preferred as to dividends
may be able to get a quick refund by filing Complete all items that apply to the and does not participate significantly in
Form 4466. The overpayment must be at corporation. corporate growth, and (d) has redemption
least 10% of the corporation's expected
income tax liability and at least $500. File Question 2 and liquidation rights that do not exceed
Form 4466 after the end of the See the list of Principal Business Activity the issue price of the stock (except for a
corporation's tax year, and no later than Codes later in the instructions. Using the reasonable redemption or liquidation
the due date for filing the corporation’s tax list of codes and activities, determine from premium). See section 1504(a)(4).
return (not including extensions). Form which activity the corporation derives the Question 4. Constructive
4466 must be filed before the corporation highest percentage of its total receipts.
Ownership of the Corporation
files its tax return. See the instructions for Enter on lines 2a, 2b, and 2c the principal
Form 4466. business activity code number, the For purposes of question 4, the
corporation's business activity, and a constructive ownership rules of section
Line 18 description of the principal product or 267(c) (excluding section 267(c)(3)) apply
service of the corporation. For nonstore to ownership of interests in corporate
retailers, select the PBA code by the stock and ownership of interests in the
If the corporation had federal income tax primary product that your establishment profit, loss, or capital of a partnership. If
withheld from any payments it received sells. For example, establishments the corporation checked “Yes” to question
because, for example, it failed to give the primarily selling prescription and 4a or 4b, complete and attach Schedule G
payer its correct EIN or was otherwise non-prescription drugs, select PBA code (Form 1120), Information on Certain
subjected to back-up withholding, include 456110 Pharmacies & Drug Retailers. Persons Owning the Corporation's Voting
the amount withheld in the total for line 18. Stock.
Question 3
Question 5. Constructive
Line 20. Refundable Credits Check the “Yes” box for question 3 if:
• The corporation is a subsidiary in an Ownership of Other Entities
Line 20a. Credit from Form 2439. Enter affiliated group (defined below), but is not For purposes of determining the
any credit from Form 2439, Notice to filing a consolidated return for the tax year corporation's constructive ownership of
Shareholder of Undistributed Long-Term with that group; or other entities, the constructive ownership
Capital Gains, for the corporation's share • The corporation is a subsidiary in a rules of section 267(c) (excluding section
of the tax paid by a regulated investment parent–subsidiary controlled group. For a 267(c)(3)) apply to ownership of interests
company (RIC) or a real estate investment definition of a parent–subsidiary controlled in partnerships and trusts as well as
trust (REIT) on undistributed long-term group, see the Instructions for Schedule O corporate stock. Generally, if an entity (a
capital gains included in the corporation's (Form 1120). corporation, partnership, or trust) is
income. Attach Form 2439. owned, directly or indirectly, by or for
Any corporation that meets either of the another entity (corporation, partnership,
Line 20b. Credit for federal tax on requirements above should check the estate, or trust), the owned entity is
fuels. Enter the total income tax credit “Yes” box. This applies even if the considered to be owned proportionately
claimed on Form 4136, Credit for Federal corporation is a subsidiary member of one by or for the owners (shareholders,
Tax Paid on Fuels. Attach Form 4136. group and the parent corporation of partners, or beneficiaries) of the owning
Line 20c. Reserved for future use. another. entity.
Line 20d. Other. Include on line 20d any Note. If the corporation is an “excluded
other refundable credit the corporation is member” of a controlled group (see Question 5a
claiming, including the following. Attach a definition in the Instructions for
statement listing the type of credit and the Schedule O (Form 1120)), it is still List each foreign or domestic corporation
amount of the credit. considered a member of a controlled not included on Form 851, Affiliations
• Credit for tax withheld under Chapter 3 group for this purpose. Schedule, in which the corporation, at the
or 4 of the Internal Revenue Code that is end of the tax year, owned directly 20% or
shown on Form 1042-S, Form 8805, or Affiliated group. An affiliated group is more, or owned, directly or indirectly, 50%
Form 8288-A. Attach the applicable form. one or more chains of includible or more of the total voting power of all
• Credit for tax on ozone-depleting corporations (section 1504(a)) connected classes of stock entitled to vote. Indicate
chemicals. See section 4682(g)(2). through stock ownership with a common the name of the corporation, EIN (if any),
• Credit under section 960(c) (section parent corporation. The common parent country of incorporation, and the
960(b) for pre-2018 taxable years of must be an includible corporation and the percentage interest owned, directly or
foreign corporations). If an increase in the following requirements must be met. indirectly, in the total voting power. List the
limitation under section 960(c) (section 1. The common parent must own parent corporation of an affiliated group of
960(b) (pre-2018)) exceeds the total tax directly stock that represents at least 80% corporations filing a consolidated tax
on Schedule J, Part I, line 11, for the tax of the total voting power and at least 80% return rather than the subsidiary members
year, the amount of the excess is deemed of the total value of the stock of at least except for subsidiary members in which
an overpayment of tax for the tax year. one of the other includible corporations. an interest is owned, directly or indirectly,
See section 960(c) (section 960(b) 2. Stock that represents at least 80% independent of the interest owned, directly
(pre-2018)) for more information regarding of the total voting power and at least 80% or indirectly, in the parent corporation. List
the circumstances under which such an of the total value of the stock of each of a corporation owned through a
excess arises. the other corporations (except for the disregarded entity rather than the
common parent) must be owned directly disregarded entity.
Line 22 by one or more of the other includible
corporations.
Reserved for future use.

Instructions for Form 1120 -21-

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Question 5b                                       Corporation A reports in its answer to      for Form 5472, for filing instructions and 
                                                question 5a that it owns, directly or         penalties for failure to file.
List each foreign or domestic partnership       indirectly, 50% of the voting stock of 
in which the corporation, at the end of the     Corporation D. Corporation A reports in its   Item 9
tax year, owned directly an interest of 20%     answer to question 5b that it owns,           Show any tax-exempt interest received or 
or more, or owned, directly or indirectly, an   directly, an interest of 50% in the profit,   accrued. Include any exempt-interest 
interest of 50% or more in the profit, loss,    loss, or capital of Partnership B and owns,   dividends received as a shareholder in a 
or capital of the partnership. List each trust  directly or indirectly, 50% of the profit,    mutual fund or other RIC. Also, if required, 
in which the corporation, at the end of the     loss, or capital of Partnership C.            include the same amount on 
tax year, owned directly an interest of 20%                                                   Schedule M-1, line 7 (or Schedule M-3 
or more, or owned, directly or indirectly, an   Question 7                                    (Form 1120), Part II, line 13, if applicable).
interest of 50% or more in the trust            Check the “Yes” box if one foreign person 
beneficial interest. Indicate the name, EIN     owned at least 25% of the total voting        Item 11
(if any), country of organization, and the      power of all classes of stock of the          Generally, if the corporation has an NOL 
maximum percentage interest owned,              corporation entitled to vote or at least 25%  for tax year 2022, it can elect to waive the 
directly or indirectly, in the profit, loss, or of the total value of all classes of stock of entire carryback period for the NOL and 
capital of the partnership at the end of the    the corporation.                              instead carry the NOL forward to future tax 
                                                                                              years. To do so, check the box on line 11 
partnership tax year, or, for a trust, the        The constructive ownership rules of         and file the tax return by its due date, 
percentage interest owned in the trust          section 318 apply in determining if a         including extensions. Do not attach the 
beneficial interest. List a partnership or      corporation is foreign owned. See section     statement described in Temporary 
trust owned through a disregarded entity        6038A(c)(5) and the related regulations.      Regulations section 301.9100-12T. 
rather than the disregarded entity.
                                                  Enter on line 7a the percentage owned       Generally, once made, the election is 
Maximum percentage owned in part-               by the foreign person specified in question   irrevocable.
nership profit, loss, or capital.  For the      7. On line 7b, enter the name of the            If the corporation timely filed its return 
purposes of question 5b, the term               owner’s country.                              for the loss year without making the 
“maximum percentage owned” means the 
                                                                                              election, it can make the election on an 
highest percentage of interest in a             Note. If there is more than one               amended return filed within 6 months of 
partnership's profit, loss, or capital as of    25%-or-more foreign owner, complete           the due date of the loss year return 
the end of the partnership's tax year, as       question 7 for the foreign person with the    (excluding extensions). Attach the election 
determined under the partnership                highest percentage of ownership.              to the amended return and write "Filed 
agreement, when taking into account the 
constructive ownership rules earlier. If the    Foreign person.  The term “foreign            pursuant to section 301.9100-2" on the 
partnership agreement does not express          person” means:                                election statement. See the Instructions 
the partner's share of profit, loss, and        • An individual who is not a citizen or       for Form 1139.
capital as fixed percentages, use a             resident of the United States;                  Corporations filing a consolidated 
reasonable method in arriving at the            • An individual who is a citizen or resident  return that elect to waive the entire 
percentage items for the purposes of            of a U.S. possession who is not otherwise     carryback period for the group must also 
completing question 5b. Such method             a citizen or resident of the United States;   attach the statement required by 
must be consistent with the partnership         • Any partnership, association, company,      Regulations section 1.1502-21(b)(3) or the 
agreement. The method used to compute           or corporation that is not created or         election will not be valid.
a percentage share of profit, loss, and         organized in the United States;
capital must be applied consistently from       • Any foreign estate or trust within the      Item 12
year to year. Maintain records to support       meaning of section 7701(a)(31); or            Enter the amount of the NOL carryover to 
the determination of the share of profits,      • A foreign government (or one of its         the tax year from prior years, even if some 
losses, and capital.                            agencies or instrumentalities) to the extent  of the loss is used to offset income on this 
                                                that it is engaged in the conduct of a        return. The amount to enter is the total of 
Example. Corporation A owns,                    commercial activity, as described in          all NOLs generated in prior years but not 
directly, a 50% interest in the profit, loss,   section 892.                                  used to offset income (either as a 
or capital of Partnership B. Corporation A 
also owns, directly, a 15% interest in the        However, the term "foreign person"          carryback or carryover) to a tax year prior 
profit, loss, or capital of Partnership C and   does not include any foreign person who       to 2022. Do not reduce the amount by any 
owns, directly, 15% of the voting stock of      consents to the filing of a joint U.S. income NOL deduction reported on line 29a.
Corporation D. Partnership B owns,              tax return.
                                                                                              Question 14
directly, a 70% interest in the profit, loss,   Owner's country. For individuals, the         A corporation that files Form 1120 must 
or capital of Partnership C and owns,           term “owner's country” means the country      file Schedule UTP (Form 1120), Uncertain 
directly, 70% of the voting stock of            of residence. For all others, it is the       Tax Position Statement, with its 2022 
Corporation D. Corporation A owns,              country where incorporated, organized,        income tax return if:
indirectly, through Partnership B, a 35%        created, or administered.                     • For 2022, the corporation's total assets 
interest (50% of 70%) in the profit, loss, or 
capital of Partnership C and owns,              Requirement to file Form 5472.       If the   equal or exceed $10 million;
indirectly, 35% of the voting stock of          corporation checked “Yes,” it may have to     • The corporation or a related party 
Corporation D. Corporation A owns,              file Form 5472, Information Return of a       issued audited financial statements 
directly or indirectly, a 50% interest in the   25% Foreign-Owned U.S. Corporation or         reporting all or a portion of the 
profit, loss, or capital of Partnership C       a Foreign Corporation Engaged in a U.S.       corporation's operations for all or a portion 
(15% directly and 35% indirectly), and          Trade or Business. Generally, a 25%           of the corporation's tax year; and
owns, directly or indirectly, 50% of the        foreign-owned corporation that had a          • The corporation has one or more tax 
voting stock of Corporation D (15%              reportable transaction with a foreign or      positions that must be reported on 
directly and 35% indirectly).                   domestic related party during the tax year    Schedule UTP.
                                                must file Form 5472. See the Instructions       Attach Schedule UTP to the 
                                                                                              corporation's income tax return. Do not file 

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it separately. A taxpayer that files a rule under Regulations section see section 163(j) and the Instructions for
protective Form 1120 must also file 1.267A-5(b)(6). Form 8990.
Schedule UTP if it satisfies the
Extent to which deduction is disal-
requirements set forth above. Question 24
lowed. When section 267A applies to Generally, a taxpayer with a trade or
For details, see the Instructions for interest or royalties paid or accrued business must file Form 8990 to claim a
Schedule UTP. pursuant to a hybrid arrangement, it deduction for business interest. In
generally disallows a deduction for the addition, Form 8990 must be filed by any
Questions 15a and 15b amount to the extent that, under the taxpayer that owns an interest in a
If the corporation made any payment in foreign tax law, there is not a partnership with current year, or prior year
2022 that would require the corporation to corresponding income inclusion (including carryover, excess business interest
file any Form(s) 1099, check the “Yes” box long-term deferral). However, the expense allocated from the partnership.
for question 15a and answer question deduction is not disallowed to the extent
15b. Otherwise, check the “No” box for the amount is directly or indirectly included Exclusions from filing. A taxpayer is not
question 15a and skip question 15b. See in income in the United States, such as if required to file Form 8990 if the taxpayer
Am I Required to File a Form 1099 or the amount is taken into account with is a small business taxpayer (defined
Other Information Return? on IRS.gov. respect to a U.S. shareholder under below) and does not have excess
section 951(a) or section 951A. For business interest expense from a
Question 19 additional information, see Regulations partnership. A taxpayer also is not
If the corporation made any payments in sections 1.267A-2 through 1.267A-4. For required to file Form 8990 if the taxpayer
2022 that would require the corporation to examples illustrating the application of only has business interest expense from
file any Forms 1042 and 1042 S, check ‐ section 267A, see Regulations section these excepted trades or businesses:
the “Yes” box. See the Instructions for 1.267A-6. • An electing real property trade or
business,
Form 1042 and Instructions for Form Question 22 • An electing farming business, or
1042 S for information regarding who is ‐
required to file Forms 1042 and 1042 S ‐ If the corporation had gross receipts of at • Certain utility businesses.
and what types of payments are subject to least $500 million in any 1 of the 3
Small business taxpayer. A small
reporting on Forms 1042 and 1042 S.‐ preceding tax years, complete and attach
business taxpayer is not subject to the
Form 8991. For this purpose, the
business interest expense limitation and is
Question 21 corporation's gross receipts include the
not required to file Form 8990. A small
If the corporation paid or accrued gross receipts of all persons aggregated
business taxpayer is a taxpayer that (a) is
(including through a partnership) any with the corporation, as specified in
not a tax shelter (as defined in section
interest or royalty for which a deduction is section 59A(e)(3). See the Instructions for
448(d)(3)), and (b) meets the gross
not allowed under section 267A, check Form 8991 to determine if the corporation
receipts test of section 448(c), discussed
"Yes" for question 21 and enter the total is subject to the base erosion minimum
next.
amount for which a deduction is not tax.
Gross receipts test. For 2022, a
allowed. Question 23 taxpayer meets the gross receipts test if
Payments to which section 267A ap- The limitation on business interest the taxpayer has average annual gross
plies. Interest or royalty paid or accrued expense applies to every taxpayer with a receipts of $27 million or less for the 3
by a domestic corporation (including, in trade or business, unless the taxpayer prior tax years. A taxpayer's average
the case of a domestic corporation that is meets certain specified exceptions. A annual gross receipts for the 3 prior tax
a partner in a partnership, the domestic taxpayer may elect out of the limitation for years is determined by adding the gross
corporation's allocable share of interest or certain businesses otherwise subject to receipts for the 3 prior tax years and
royalty paid or accrued by the partnership) the business interest expense limitation. dividing the total by 3. Gross receipts
is subject to section 267A. Section 267A See Question 24. Also, see the include the aggregate gross receipts from
generally applies to interest or royalty paid Instructions for Form 8990. all persons treated as a single employer,
or accrued according to a hybrid such as a controlled group of
arrangement (such as, for example, a Certain real property trades or
payment according to a hybrid instrument, businesses and farming businesses corporations, commonly controlled
or a payment to a reverse hybrid), qualify to make an election not to limit partnerships, or proprietorships, and
provided that the payment or accrual is to business interest expense. This is an affiliated service groups. See section
a related party (or according to a irrevocable election. If you make this 448(c) and the Instructions for Form 8990
structured arrangement). In addition, election, you are required to use the for additional information.
under an imported mismatch rule, section alternative depreciation system to Question 25
267A generally applies to interest or depreciate any nonresidential real
royalties paid or accrued according to a property, residential rental property, and To certify as a QOF, the corporation must
non-hybrid arrangement where the income qualified improvement property for an file Form 1120 and attach Form 8996,
attributable to that payment or accrual is electing real property trade or business, even if the corporation had no income or
directly or indirectly offset by certain and any property with a recovery period of expenses to report. If the corporation is
deductions involving hybridity incurred by 10 years or more for an electing farming attaching Form 8996, check the “Yes” box
a related party or according to a structured business. See section 168(g)(1)(F). Also, for question 25. On the line following the
arrangement. However, section 267A you are not entitled to the special dollar sign, enter the amount from Form
does not apply if a de minimis exception is depreciation allowance for that property. 8996, line 15.
satisfied. See Regulations section For a taxpayer with more than one The penalty reported on this line from
1.267A-1(c). For purposes of section qualifying business, the election is made Form 8996, line 15, is not due with the
267A, interest and royalties are defined with respect to each business. filing of this form. The IRS will separately
broadly. For additional information about Check “Yes” if the corporation has an send to you a notice setting forth the due
arrangements subject to section 267A, election in effect to exclude a real property date for the penalty payment and where
see Regulations sections 1.267A-2 and trade or business or a farming business that payment should be sent.
1.267A-4. Also, see the anti-avoidance from section 163(j). For more information,

Instructions for Form 1120 -23-

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Question 26 • Corporations with total receipts (page 1,
Check the “Yes” box if: Schedule L. line 1a plus lines 4 through 10) and total
1. On or after December 22, 2017, a Balance Sheets per Books assets at the end of the tax year less than
$250,000 are not required to complete
foreign corporation directly or indirectly The balance sheets should agree with the Schedules L, M-1, and M-2 if the “Yes”
acquired substantially all of the properties corporation's books and records. box on Schedule K, question 13, is
held directly or indirectly by the Corporations with total receipts checked.
corporation; and (page 1, line 1a plus lines 4 through 10) • Corporations with total assets
2. The ownership percentage with and total assets at the end of the tax year non-consolidated (or consolidated for all
respect to the acquisition was greater than less than $250,000 are not required to corporations included within the
50% (by vote or by value). complete Schedules L, M-1, and M-2 if the consolidated tax group) of $10 million or
“Yes” box on Schedule K, question 13, is more on the last day of the tax year must
If “Yes” is checked, also enter in the checked. file Schedule M-3 (Form 1120) instead of
space provided the ownership percentage Schedule M-1.
both by vote and by value. If there are Corporations with total assets
multiple acquisitions that must be non-consolidated (or consolidated for all • A corporation filing Form 1120 that is
reported, enter the ownership for the most corporations included within the not required to file Schedule M-3 may
recent acquisition. Attach a statement consolidated tax group) of $10 million or voluntarily file Schedule M-3 instead of
reporting the ownership percentage by more on the last day of the tax year must Schedule M-1. See the Instructions for
vote and by value for the other file Schedule M-3 (Form 1120) instead of Schedule M-3 (Form 1120) for more
acquisitions. Schedule M-1. However, see the information.
instructions for Schedule M-1 below. See • Corporations that (a) are required to file
Section 7874 applies in certain cases the separate Instructions for Schedule M-3 Schedule M-3 (Form 1120) and have less
in which a foreign corporation directly or (Form 1120) for provisions that also affect than $50 million total assets at the end of
indirectly acquires substantially all of the Schedule L. the tax year, or (b) are not required to file
properties of a domestic corporation. Schedule M-3 (Form 1120) and voluntarily
Generally, it applies when three If filing a consolidated return, report file Schedule M-3 (Form 1120), must
requirements are satisfied. total consolidated assets, liabilities, and either (i) complete Schedule M-3 (Form
shareholder's equity for all corporations 1120) entirely or (ii) complete
1. Pursuant to a plan or series of joining in the return. See Consolidated Schedule M-3 (Form 1120) through Part I,
related transactions, a foreign corporation Return, earlier. and complete Form 1120, Schedule M-1,
must acquire directly or indirectly instead of completing Parts II and III of
substantially all of the properties held Line 1
Schedule M-3 (Form 1120). If the
directly or indirectly by a domestic Include certificates of deposit as cash on corporation chooses to complete
corporation. this line. Schedule M-1 instead of completing Parts
2. After the acquisition, the ownership II and III of Schedule M-3, the amount on
percentage (by vote or value) must be at Line 5
Schedule M-1, line 1, must equal the
least 60%. Include on this line: amount on Schedule M-3, Part I, line 11.
3. After the acquisition, the expanded • State and local government obligations, See the Instructions for Schedule M-3
the interest on which is excludable from
affiliated group that includes the foreign (Form 1120) for more information.
gross income under section 103(a), and
acquiring corporation must not have
substantial business activities in the • Stock in a mutual fund or other RIC that Line 5c
distributed exempt-interest dividends
foreign country in which the foreign Include any of the following applicable
during the tax year of the corporation.
acquiring corporation is created or expenses.
organized. Line 26 • Entertainment expenses not deductible
under section 274(a).
When section 7874 applies, the tax Some examples of adjustments to report • Meal expenses not deductible under
treatment of the acquisition depends on on this line include: section 274(n).
the ownership percentage. If the • Unrealized gains and losses on • Qualified transportation fringes not
ownership percentage is at least 80%, securities held “available for sale,” deductible under 274(a)(4).
then the foreign acquiring corporation is • Foreign currency translation • Expenses for the use of an
treated as a domestic corporation for all adjustments, entertainment facility.
purposes of the Internal Revenue Code. • The excess of additional pension • The part of business gifts over $25.
See section 7874(b). If the ownership liability over unrecognized prior service • Expenses of an individual over $2,000,
percentage is at least 60% but less than cost, allocable to conventions on cruise ships.
80%, then the foreign acquiring • Guarantees of employee stock (ESOP) • Employee achievement awards of
corporation is respected as a foreign debt, and nontangible or tangible property over $400
corporation, but the domestic corporation • Compensation related to employee ($1,600 if part of a qualified plan).
and certain other persons are subject to stock award plans. • The cost of skyboxes.
special rules that reduce the tax benefits If the total adjustment to be entered on • Nondeductible club dues.
of the acquisition. See section 7874(a). line 26 is a negative amount, enter the • The part of luxury water travel expenses
See the regulations under section 7874 amount in parentheses. not deductible under section 274(m).
for rules regarding the computation of the • Expenses for travel as a form of
ownership percentage. See sections education.
59A(d)(4), 965(l), 4501(d), and 4985 for Schedule M-1. • Other nondeductible travel and
additional rules regarding the tax Reconciliation of Income entertainment expenses.
treatment of certain expatriated entities. (Loss) per Books With For more information, see Pub. 535.
Income per Return
In completing Schedule M-1, the following
apply.

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Line 7 was not fully forgiven. The corporation
Report any tax-exempt interest received Schedule M-2. Analysis of should attach a statement to
or accrued, including any exempt-interest Unappropriated Retained Schedule M-2 including the following
information:
dividends received as a shareholder in a Earnings per Books 1. The corporation's name, address,
mutual fund or other RIC. Also, report this If the corporation treats tax-exempt and EIN;
same amount on Schedule K, item 9. income resulting from a PPP loan as
The corporation should include received or accrued prior to when 2. A statement that the corporation is
tax-exempt income from forgiven PPP forgiveness of the PPP loan is granted and making adjustments in accordance with
loans on line 7 of Schedule M-1 (if it was the amount of forgiveness granted is less section 3.03 of Rev. Proc. 2021-48; and
included on line 1 of the Schedule M-1), or than the amount of tax-exempt income 3. The tax year for which tax-exempt
on Part II, line 25 of Schedule M-3 (Form that was previously treated as received or income was originally reported, the
1120), column (c) as a negative number (if accrued, the corporation should include amount of tax-exempt income that was
it was included on line 25 in column (a) as the difference as a decrease in originally reported for such tax year, and
Income per Income Statement). tax-exempt income on Schedule M-2, the amount of tax-exempt income being
line 6, for the tax year in which the adjusted on Schedule M-2.
taxpayer receives notice that the PPP loan

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Paperwork Reduction Act Notice. We ask for the information on these forms to carry out the Internal Revenue laws of the United
States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to
figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form
displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents
may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential,
as required by section 6103.
Estimates of Taxpayer Burden. The following tables show burden estimates based on current statutory requirements as of
November 2022 for taxpayers filing 2022 Forms 1065, 1120, 1120-C, 1120-F, 1120-H, 1120-ND, 1120-S, 1120-SF, 1120-FSC,
1120-L, 1120-PC, 1066, 1120-REIT, 1120-RIC, 1120-POL, and related attachments. Time spent and out-of-pocket costs are
presented separately. Time burden is broken out by taxpayer activity, with reporting representing the largest component.
Out-of-pocket costs include any expenses incurred by taxpayers to prepare and submit their tax returns. Examples include tax return
preparation and submission fees, postage and photocopying costs, and tax preparation software costs. While these estimates don't
include burden associated with post-filing activities, IRS operational data indicate that electronically prepared and filed returns have
fewer arithmetic errors, implying lower post-filing burden.
Reported time and cost burdens are national averages and don't necessarily reflect a “typical” case. Most taxpayers experience
lower than average burden, with taxpayer burden varying considerably by taxpayer type. For instance, the estimated average time
burden for all business entities is 93 hours, with an average cost of $3,927 per return. This average includes all associated forms and
schedules, across all preparation methods and taxpayer activities.
The average burden for partnerships filing Forms 1065 and related attachments is about 85 hours and $3,900; the average burden
for corporations filing Form 1120 and associated forms is about 140 hours and $6,100; and the average burden for Forms 1066,
1120-REIT, 1120-RIC, 1120S, and all related attachments is 80 hours and $3,100. Within each of these estimates there is significant
variation in taxpayer activity. Tax preparation fees and other out-of-pocket costs vary extensively depending on the tax situation of the
taxpayer, the type of software or professional preparer used, and the geographic location. Third-party burden hours are not included in
these estimates.

Table 1 – Taxpayer Burden for Entities Taxed as Partnerships
Forms 1065, 1066, and all attachments
Primary Form Filed or Type of Total Number of Returns Average Time (hours) Average Cost ($) Average Monetized
Taxpayer (millions) Burden ($)
All Partnerships 4.8 85 3,900 7,900
Small 4.5 75 2,800 5,300
Large* 0.3 245 20,600 45,900
*A large business is defined as one having end-of-year assets greater than $10 million. A large business is defined the same way for partnerships, taxable corporations, and
pass-through corporations. A small business is any business that doesn't meet the definition of a large business.

Table 2 – Taxpayer Burden for Entities Taxed as Taxable Corporations
Forms 1120, 1120-C, 1120-F, 1120-H, 1120-ND, 1120-SF, 1120-FSC, 1120-L, 1120-PC, 1120-POL, and all attachments
Primary Form Filed or Type of Total Number of Returns Average Time (hours) Average Cost ($) Average Monetized
Taxpayer (millions) Burden ($)
All Taxable Corporations 2.1 140 6,100 15,100
Small 2.0 90 3,100 6,400
Large* 0.1 895 49,700 142,600
*A large business is defined as one having end-of-year assets greater than $10 million. A large business is defined the same way for partnerships, taxable corporations, and
pass-through corporations. A small business is any business that doesn't meet the definition of a large business.

Table 3 – Taxpayer Burden for Entities Taxed as Pass-Through Corporations
Forms 1120-REIT, 1120-RIC, 1120-S, and all attachments
Primary Form Filed or Type of Total Number of Returns Average Time (hours) Average Cost ($) Average Monetized
Taxpayer (millions) Burden ($)
All Pass-Through Corporations 5.4 80 3,100 6,400
Small 5.3 80 2,800 5,800
Large* 0.1 330 24,500 58,500
*A large business is defined as one having end-of-year assets greater than $10 million. A large business is defined the same way for partnerships, taxable corporations, and
pass-through corporations. A small business is any business that doesn't meet the definition of a large business.

Comments. If you have comments concerning the accuracy of these time estimates or suggestions for making these forms
simpler, we would be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can write to the

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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, near the beginning of the instructions.

Instructions for Form 1120                          -27-

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Principal Business Activity Codes                                largest percentage of its “total receipts.” Total receipts is 2a, 2b, and 2c. On line 2a, enter the six-digit code 
                                                                 defined as the sum of gross receipts or sales (page 1,        selected from the list below. On line 2b, enter the 
This list of principal business activities and their             line 1a) plus all other income (page 1, lines 4 through       company's business activity. On line 2c, enter a brief 
associated codes is designed to classify an enterprise           10). If the company purchases raw materials and               description of the principal product or service of the 
by the type of activity in which it is engaged to facilitate     supplies them to a subcontractor to produce the finished      company.
the administration of the Internal Revenue Code. These           product, but retains title to the product, the company is 
principal business activity codes are based on the North         considered a manufacturer and must use one of the 
American Industry Classification System.                         manufacturing codes (311110–339900).
Using the list of activities and codes below,                           Once the principal business activity is determined, 
determine from which activity the company derives the            entries must be made on Form 1120, Schedule K, lines 
Agriculture, Forestry, Fishing,           238300             Building Finishing Contractors    Plastics and Rubber Products             Furniture and Related Product 
                                                             (including drywall, insulation,   Manufacturing                            Manufacturing
and Hunting                                                  painting, wallcovering, flooring, 326100 Plastics Product Mfg              337000   Furniture & Related Product 
Crop Production                                              tile, & finish carpentry)         326200 Rubber Product Mfg                         Manufacturing
111100 Oilseed & Grain Farming            238900             Other Specialty Trade             Nonmetallic Mineral Product              Miscellaneous Manufacturing
111210 Vegetable & Melon Farming                             Contractors (including site       Manufacturing                            339110   Medical Equipment & Supplies 
       (including potatoes & yams)                           preparation)                                                                        Mfg
                                                                                               327100 Clay Product & Refractory Mfg
111300 Fruit & Tree Nut Farming           Manufacturing                                        327210 Glass & Glass Product Mfg         339900   Other Miscellaneous 
111400 Greenhouse, Nursery, &             Food Manufacturing                                   327300 Cement & Concrete Product Mfg              Manufacturing
       Floriculture Production            311110             Animal Food Mfg                   327400 Lime & Gypsum Product Mfg         Wholesale Trade
111900 Other Crop Farming (including      311200             Grain & Oilseed Milling           327900 Other Nonmetallic Mineral         Merchant Wholesalers, Durable Goods
       tobacco, cotton, sugarcane, hay,   311300             Sugar & Confectionery Product            Product Mfg                       423100   Motor Vehicle & Motor Vehicle 
       peanut, sugar beet, & all other                       Mfg                               Primary Metal Manufacturing                       Parts & Supplies
       crop farming)
Animal Production                         311400             Fruit & Vegetable Preserving &    331110 Iron & Steel Mills & Ferroalloy   423200   Furniture & Home Furnishings
112111 Beef Cattle Ranching & Farming                        Specialty Food Mfg                       Mfg                               423300   Lumber & Other Construction 
112112 Cattle Feedlots                    311500             Dairy Product Mfg                 331200 Steel Product Mfg from                     Materials
112120 Dairy Cattle & Milk Production     311610             Animal Slaughtering and                  Purchased Steel                   423400   Professional & Commercial 
                                                             Processing                        331310 Alumina & Aluminum Production              Equipment & Supplies
112210 Hog & Pig Farming                  311710             Seafood Product Preparation &            & Processing                      423500   Metal & Mineral (except 
112300 Poultry & Egg Production                              Packaging                         331400 Nonferrous Metal (except                   Petroleum)
112400 Sheep & Goat Farming               311800             Bakeries, Tortilla & Dry Pasta           Aluminum) Production &            423600   Household Appliances and 
112510 Aquaculture (including shellfish &                    Mfg                                      Processing                                 Electrical & Electronic Goods
       finfish farms & hatcheries)        311900             Other Food Mfg (including         331500 Foundries                         423700   Hardware, Plumbing, & Heating 
112900 Other Animal Production                               coffee, tea, flavorings &         Fabricated Metal Product                          Equipment & Supplies
Forestry and Logging                                         seasonings)                       Manufacturing                            423800   Machinery, Equipment, & 
113110 Timber Tract Operations            Beverage and Tobacco Product                         332110 Forging & Stamping                         Supplies
                                          Manufacturing
113210 Forest Nurseries & Gathering of    312110             Soft Drink & Ice Mfg              332210 Cutlery & Handtool Mfg            423910   Sporting & Recreational Goods & 
       Forest Products                    312120             Breweries                         332300 Architectural & Structural Metals          Supplies
                                                                                                      Mfg                               423920   Toy & Hobby Goods & Supplies
113310 Logging                            312130             Wineries                          332400 Boiler, Tank, & Shipping          423930   Recyclable Materials
Fishing, Hunting, and Trapping            312140             Distilleries                             Container Mfg                     423940   Jewelry, Watch, Precious Stone, 
114110 Fishing                            312200             Tobacco Manufacturing             332510 Hardware Mfg                               & Precious Metals
114210 Hunting & Trapping                 Textile Mills and Textile Product Mills              332610 Spring & Wire Product Mfg         423990   Other Miscellaneous Durable 
Support Activities for Agriculture and    313000             Textile Mills                     332700 Machine Shops; Turned Product;             Goods
Forestry                                                                                              & Screw, Nut, & Bolt Mfg          Merchant Wholesalers, Nondurable 
115110 Support Activities for Crop        314000             Textile Product Mills                                                      Goods
       Production (including cotton       Apparel Manufacturing                                332810 Coating, Engraving, Heat 
       ginning, soil preparation,         315100             Apparel Knitting Mills                   Treating, & Allied Activities     424100   Paper & Paper Products
       planting, & cultivating)           315210             Cut & Sew Apparel Contractors     332900 Other Fabricated Metal Product    424210   Drugs & Druggists' Sundries
                                                                                                      Mfg                               424300   Apparel, Piece Goods, & Notions
115210 Support Activities for Animal      315250             Cut & Sew Apparel Mfg (except     Machinery Manufacturing                  424400   Grocery & Related Products
       Production (including farriers)                       Contractors)                      333100 Agriculture, Construction, &      424500   Farm Product Raw Materials
115310 Support Activities for Forestry    315990             Apparel Accessories & Other              Mining Machinery Mfg              424600   Chemical & Allied Products
Mining                                                       Apparel Mfg                       333200 Industrial Machinery Mfg          424700   Petroleum & Petroleum Products
211120 Crude Petroleum Extraction         Leather and Allied Product                           333310 Commercial & Service Industry     424800   Beer, Wine, & Distilled Alcoholic 
211130 Natural Gas Extraction             Manufacturing                                               Machinery Mfg                              Beverages
                                                             Finishing
212110 Coal Mining                        316110             Leather & Hide Tanning &          333410 Ventilation, Heating,             424910   Farm Supplies
212200 Metal Ore Mining                   316210             Footwear Mfg (including rubber           Air-Conditioning, & Commercial 
212310 Stone Mining & Quarrying                              & plastics)                              Refrigeration Equipment Mfg       424920   Book, Periodical, & Newspapers
212320 Sand, Gravel, Clay, & Ceramic &    316990             Other Leather & Allied Product    333510 Metalworking Machinery Mfg        424930   Flower, Nursery Stock, & Florists' 
       Refractory Minerals Mining &                          Mfg                               333610 Engine, Turbine & Power                    Supplies
       Quarrying                          Wood Product Manufacturing                                  Transmission Equipment Mfg        424940   Tobacco Products & Electronic 
212390 Other Nonmetallic Mineral          321110             Sawmills & Wood Preservation      333900 Other General Purpose                      Cigarettes
                                                                                                      Machinery Mfg                     424950   Paint, Varnish, & Supplies
       Mining & Quarrying                 321210             Veneer, Plywood, & Engineered     Computer and Electronic Product          424990   Other Miscellaneous Nondurable 
213110 Support Activities for Mining                         Wood Product Mfg                  Manufacturing                                     Goods
Utilities                                 321900             Other Wood Product Mfg            334110 Computer & Peripheral             WholesaleTrade Agents and Brokers
221100 Electric Power Generation,         Paper Manufacturing                                         Equipment Mfg                     425120   Wholesale Trade Agents & 
       Transmission & Distribution        322100             Pulp, Paper, & Paperboard Mills   334200 Communications Equipment Mfg               Brokers
221210 Natural Gas Distribution           322200             Converted Paper Product Mfg       334310 Audio & Video Equipment Mfg       Retail Trade
221300 Water, Sewage & Other Systems      Printing and Related Support Activities              334410 Semiconductor & Other             Motor Vehicle and Parts Dealers
221500 Combination Gas & Electric         323100             Printing & Related Support               Electronic Component Mfg
Construction                                                 Activities                        334500 Navigational, Measuring,          441110   New Car Dealers
                                          Petroleum and Coal Products                                 Electromedical, & Control         441120   Used Car Dealers
Construction of Buildings                 Manufacturing                                               Instruments Mfg                   441210   Recreational Vehicle Dealers
236110 Residential Building Construction  324110             Petroleum Refineries (including   334610 Manufacturing & Reproducing       441222   Boat Dealers
236200 Nonresidential Building                               integrated)                              Magnetic & Optical Media          441227   Motorcycle, ATV, and All Other 
       Construction                       324120             Asphalt Paving, Roofing, &        Electrical Equipment, Appliance, and              Motor Vehicle Dealers
Heavy and Civil Engineering                                  Saturated Materials Mfg           Component Manufacturing                  441300   Automotive Parts, Accessories, 
Construction                              324190             Other Petroleum & Coal            335100 Electric Lighting Equipment Mfg            & Tire Retailers
237100 Utility System Construction                           Products Mfg                      335200 Household Appliance Mfg           Furniture and Home Furnishings 
237210 Land Subdivision                   Chemical Manufacturing                               335310 Electrical Equipment Mfg          Retailers
237310 Highway, Street, & Bridge          325100             Basic Chemical Mfg                335900 Other Electrical Equipment &      449110   Furniture Retailers
       Construction                       325200             Resin, Synthetic Rubber, &               Component Mfg                     449121   Floor Covering Retailers
237990 Other Heavy & Civil Engineering                       Artificial & Synthetic Fibers &   Transportation Equipment                 449122   Window Treatment Retailers
       Construction                                          Filaments Mfg                     Manufacturing                            449129   All Other Home Furnishings 
Specialty Trade Contractors               325300             Pesticide, Fertilizer, & Other    336100 Motor Vehicle Mfg                          Retailers
238100 Foundation, Structure, & Building                     Agricultural Chemical Mfg         336210 Motor Vehicle Body & Trailer Mfg  Electronics and Appliance Retailers
       Exterior Contractors (including    325410             Pharmaceutical & Medicine Mfg     336300 Motor Vehicle Parts Mfg           449210   Electronics & Appliance Retailers 
       framing carpentry, masonry,        325500             Paint, Coating, & Adhesive Mfg    336410 Aerospace Product & Parts Mfg              (including Computers)
       glass, roofing, & siding)          325600             Soap, Cleaning Compound, &        336510 Railroad Rolling Stock Mfg        Building Material and Garden 
238210 Electrical Contractors                                Toilet Preparation Mfg            336610 Ship & Boat Building              Equipment and Supplies Dealers
238220 Plumbing, Heating, &               325900             Other Chemical Product &          336990 Other Transportation Equipment    444110   Home Centers
       Air-Conditioning Contractors                          Preparation Mfg                          Mfg                               444120   Paint & Wallpaper Retailers
238290 Other Building Equipment                                                                                                         444140   Hardware Retailers
       Contractors

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Principal Business Activity Codes (Continued)
444180 Other Building Material Dealers      485320 Limousine Service                 523160 Commodity Contracts               541340  Drafting Services
444200 Lawn & Garden Equipment &            485410 School & Employee Bus                    Intermediation                    541350  Building Inspection Services
       Supplies Retailers                          Transportation                    523210 Securities & Commodity            541360  Geophysical Surveying & 
Food and Beverage Retailers                 485510 Charter Bus Industry                     Exchanges                                 Mapping Services
445110 Supermarkets and Other               485990 Other Transit & Ground            523900 Other Financial Investment        541370  Surveying & Mapping (except 
       Grocery Retailers (except                   Passenger Transportation                 Activities (including portfolio           Geophysical) Services
       Convenience)                         Pipeline Transportation                         management & investment           541380  Testing Laboratories & Services
                                                                                            advice)
445131 Convenience Retailers                486000 Pipeline Transportation           Insurance Carriers and Related           Specialized Design Services
445132 Vending Machine Operators            Scenic & Sightseeing Transportation      Activities                               541400  Specialized Design Services 
445230 Fruit & Vegetable Markets            487000 Scenic & Sightseeing              524110 Direct Life, Health, & Medical            (including interior, industrial, 
445240 Meat Retailers                              Transportation                           Insurance Carriers                        graphic, & fashion design)
445250 Fish & Seafood Retailers             Support Activities for Transportation    524120 Direct Insurance (except Life,    Computer Systems Design and Related 
445291 Baked Goods Retailers                488100 Support Activities for Air               Health, & Medical) Carriers       Services
445292 Confectionery & Nut Retailers               Transportation                    524210 Insurance Agencies &              541511  Custom Computer Programming 
445298 All Other Specialty Food             488210 Support Activities for Rail              Brokerages                                Services
       Retailers                                   Transportation                    524290 Other Insurance Related           541512  Computer Systems Design 
445320 Beer, Wine, & Liquor Retailers       488300 Support Activities for Water             Activities (including third-party         Services
Health and Personal Care Retailers                 Transportation                           administration of insurance and   541513  Computer Facilities Management 
456110 Pharmacies & Drug Retailers          488410 Motor Vehicle Towing                     pension funds)                            Services
456120 Cosmetics, Beauty Supplies, &        488490 Other Support Activities for Road Funds, Trusts, and Other Financial       541519  Other Computer Related 
       Perfume Retailers                           Transportation                    Vehicles                                         Services
456130 Optical Goods Retailers              488510 Freight Transportation            525100 Insurance & Employee Benefit      Other Professional, Scientific, and 
                                                   Arrangement                              Funds                             Technical Services
456190 Other Health & Personal Care         488990 Other Support Activities for      525910 Open-End Investment Funds         541600  Management, Scientific, & 
       Retailers                                   Transportation                           (Form 1120-RIC)                           Technical Consulting Services
Gasoline Stations & Fuel Dealers            Couriers and Messengers                  525920 Trusts, Estates, & Agency         541700  Scientific Research & 
                                                                                            Accounts                                  Development Services
457100 Gasoline Stations (including         492110 Couriers & Express Delivery       525990 Other Financial Vehicles          541800  Advertising, Public Relations, & 
       convenience stores with gas)                Services                                 (including mortgage REITs &               Related Services
457210 Fuel Dealers (including Heating      492210 Local Messengers & Local                 closed-end investment funds)      541910  Marketing Research & Public 
       Oil and Liquefied Petroleum)                Delivery                                 “Offices of Bank Holding                  Opinion Polling
Clothing and Accessories Retailers          Warehousing and Storage                         Companies” and “Offices of        541920  Photographic Services
458110 Clothing and Clothing                493100 Warehousing & Storage (except            Other Holding Companies” are 
       Accessories Retailers                       lessors of miniwarehouses &              located under Management of       541930  Translation & Interpretation 
458210 Shoe Retailers                              self-storage units)                      Companies (Holding                        Services
                                                                                            Companies), later.                541940  Veterinary Services
458310 Jewelry Retailers                    Information                              Real Estate and Rental and               541990  All Other Professional, Scientific, 
458320 Luggage & Leather Goods              Motion Picture and Sound Recording       Leasing                                          & Technical Services
       Retailers                            Industries                                                                        Management of Companies 
Sporting Goods, Hobby, Book, Musical        512100 Motion Picture & Video Industries Real Estate
Instrument and Miscellaneous Retailers             (except video rental)             531110 Lessors of Residential Buildings  (Holding Companies)
459110 Sporting Goods Retailers             512200 Sound Recording Industries               & Dwellings (including equity     551111  Offices of Bank Holding 
459120 Hobby, Toy, & Game Retailers         Publishing Industries                           REITs)                                    Companies
459130 Sewing, Needlework, & Piece          513110 Newspaper Publishers              531120 Lessors of Nonresidential         551112  Offices of Other Holding 
       Goods Retailers                                                                      Buildings (except                         Companies
459140 Musical Instrument & Supplies        513120 Periodical Publishers                    Miniwarehouses) (including 
       Retailers                            513130 Book Publishers                          equity REITs)                     Administrative and Support and 
459210 Book Retailers & News Dealers        513140 Directory & Mailing List          531130 Lessors of Miniwarehouses &       Waste Management and 
       (including newsstands)                      Publishers                               Self-Storage Units (including     Remediation Services
459310 Florists                             513190 Other Publishers                         equity REITs)
459410 Office Supplies & Stationery         513210 Software Publishers               531190 Lessors of Other Real Estate      Administrative and Support Services
                                                                                            Property (including equity REITs) 561110  Office Administrative Services
       Retailers                            Broadcasting, Content Providers, and     531210 Offices of Real Estate Agents &   561210  Facilities Support Services
459420 Gift, Novelty, & Souvenir            Telecommunications                              Brokers                           561300  Employment Services
       Retailers                            516100 Radio & Television Broadcasting   531310 Real Estate Property Managers     561410  Document Preparation Services
459510 Used Merchandise Retailers                  Stations                          531320 Offices of Real Estate Appraisers 561420  Telephone Call Centers
459910 Pet & Pet Supplies Retailers         516210 Media Streaming, Social           531390 Other Activities Related to Real  561430  Business Service Centers 
459930 Manufactured (Mobile) Home                  Providers
459920 Art Dealers                                 Networks, & Other Content                Estate                                    (including private mail centers & 
       Dealers                              517000 Telecommunications (including     Rental and Leasing Services                      copy shops)
459990 All Other Miscellaneous Retailers           Wired, Wireless, Satellite, Cable 532100 Automotive Equipment Rental &     561440  Collection Agencies
       (including tobacco, candle, &               & Other Program Distribution,            Leasing                           561450  Credit Bureaus
       trophy retailers)                           Resellers, Agents, Other          532210 Consumer Electronics &            561490  Other Business Support Services 
                                                   Telecommunications, & Internet 
General Merchandise Retailers                      Service Providers)                       Appliances Rental                         (including repossession services, 
455110 Department Stores                    Data Processing, Web Search Portals,     532281 Formal Wear & Costume Rental              court reporting, & stenotype 
455210 Warehouse Clubs,                     & Other Information Services             532282 Video Tape & Disc Rental                  services)
       Supercenters, & Other General        518210 Computing Infrastructure          532283 Home Health Equipment Rental      561500  Travel Arrangement & 
       Merch. Retailers                            Providers, Data Processing, Web   532284 Recreational Goods Rental                 Reservation Services
Nonstore Retailers                                 Hosting, & Related Services       532289 All Other Consumer Goods          561600  Investigation & Security Services
       Nonstore retailers sell all types of 519200 Web Search Portals, Libraries,           Rental                            561710  Exterminating & Pest Control 
       merchandise using such                      Archives, & Other Info. Services  532310 General Rental Centers                    Services
       methods as Internet, mail-order      Finance and Insurance                    532400 Commercial & Industrial           561720  Janitorial Services
       catalogs, interactive television, or                                                 Machinery & Equipment Rental &    561730  Landscaping Services
       direct sales. These types of         Depository Credit Intermediation                Leasing                           561740  Carpet & Upholstery Cleaning 
       Retailers should select the PBA      522110 Commercial Banking                Lessors of Nonfinancial Intangible               Services
       associated with their primary line   522130 Credit Unions                     Assets (except copyrighted works)        561790  Other Services to Buildings & 
       of products sold. For example,                                                                                                 Dwellings
       establishments primarily selling     522180 Savings Institutions & Other      533110 Lessors of Nonfinancial 
       prescription and non-prescription           Depository Credit Intermediation         Intangible Assets (except         561900  Other Support Services 
       drugs, select PBA code 456110        Nondepository Credit Intermediation             copyrighted works)                        (including packaging & labeling 
       Pharmacies & Drug Retailers          522210 Credit Card Issuing               Professional, Scientific, and                    services, & convention & trade 
                                                                                                                                      show organizers)
Transportation and                          522220 Sales Financing                   Technical Services                       Waste Management and Remediation 
Warehousing                                 522291 Consumer Lending                  Legal Services                           Services
Air, Rail, and Water Transportation         522292 Real Estate Credit (including     541110 Offices of Lawyers                562000  Waste Management & 
481000 Air Transportation                          mortgage bankers & originators)                                                    Remediation Services
482110 Rail Transportation                  522299 Intl, Secondary Market, & Other   541190 Other Legal Services
                                                   Nondepos. Credit Intermediation   Accounting, Tax Preparation,             Educational Services
483000 Water Transportation                 Activities Related to Credit             Bookkeeping, and Payroll Services        611000  Educational Services (including 
Truck Transportation                        Intermediation                           541211 Offices of Certified Public               schools, colleges, & universities)
484110 General Freight Trucking, Local      522300 Activities Related to Credit             Accountants                       Health Care and Social 
484120 General Freight Trucking,                   Intermediation (including loan    541213 Tax Preparation Services
       Long-distance                               brokers, check clearing, &        541214 Payroll Services                  Assistance
484200 Specialized Freight Trucking                money transmitting)               541219 Other Accounting Services         Offices of Physicians and Dentists
Transit and Ground Passenger                Securities, Commodity Contracts, and     Architectural, Engineering, and Related  621111  Offices of Physicians (except 
Transportation                              Other Financial Investments and          Services                                         mental health specialists)
                                            Related Activities
485110 Urban Transit Systems                523150 Investment Banking & Securities   541310 Architectural Services            621112  Offices of Physicians, Mental 
485210 Interurban & Rural Bus                      Intermediation                    541320 Landscape Architecture Services           Health Specialists
       Transportation                                                                541330 Engineering Services              621210  Offices of Dentists
485310 Taxi and Ridesharing Services

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Principal Business Activity Codes (Continued)
Offices of Other Health Practitioners    624200 Community Food & Housing, &     721120 Casino Hotels                     811420 Reupholstery & Furniture Repair
621310 Offices of Chiropractors                 Emergency & Other Relief        721191 Bed & Breakfast Inns              811430 Footwear & Leather Goods 
621320 Offices of Optometrists                  Services                        721199 All Other Traveler                       Repair
621330 Offices of Mental Health          624310 Vocational Rehabilitation              Accommodation                     811490 Other Personal & Household 
       Practitioners (except Physicians)        Services                        721210 RV (Recreational Vehicle) Parks          Goods Repair & Maintenance
621340 Offices of Physical, Occupational 624410 Childcare Services                     & Recreational Camps              Personal and Laundry Services
       & Speech Therapists, &            Arts, Entertainment, and               721310 Rooming & Boarding Houses,        812111 Barber Shops
       Audiologists                      Recreation                                    Dormitories, & Workers’ Camps     812112 Beauty Salons
621391 Offices of Podiatrists            Performing Arts, Spectator Sports, and Food Services and Drinking Places        812113 Nail Salons
621399 Offices of All Other              Related Industries                     722300 Special Food Services (including  812190 Other Personal Care Services 
       Miscellaneous Health              711100 Performing Arts Companies              food service contractors &               (including diet & weight reducing 
       Practitioners                                                                   caterers)                                centers)
Outpatient Care Centers                  711210 Spectator Sports (including     722410 Drinking Places (Alcoholic        812210 Funeral Homes & Funeral 
621410 Family Planning Centers                  sports clubs & racetracks)             Beverages)                               Services
621420 Outpatient Mental Health &        711300 Promoters of Performing Arts,   722511 Full-Service Restaurants          812220 Cemeteries & Crematories
       Substance Abuse Centers                  Sports, & Similar Events        722513 Limited-Service Restaurants       812310 Coin-Operated Laundries & 
621491 HMO Medical Centers               711410 Agents & Managers for Artists,  722514 Cafeterias, Grill Buffets, and           Drycleaners
                                                Athletes, Entertainers, & Other 
621492 Kidney Dialysis Centers                  Public Figures                         Buffets                           812320 Drycleaning & Laundry Services 
621493 Freestanding Ambulatory           711510 Independent Artists, Writers, & 722515 Snack and Non-alcoholic                  (except Coin-Operated)
       Surgical & Emergency Centers             Performers                             Beverage Bars                     812330 Linen & Uniform Supply
621498 All Other Outpatient Care         Museums, Historical Sites, and Similar Other Services                           812910 Pet Care (except Veterinary) 
       Centers                           Institutions                           Repair and Maintenance                          Services
Medical and Diagnostic Laboratories      712100 Museums, Historical Sites, &    811110 Automotive Mechanical &           812920 Photofinishing
621510 Medical & Diagnostic                     Similar Institutions                   Electrical Repair & Maintenance   812930 Parking Lots & Garages
       Laboratories                      Amusement, Gambling, and Recreation    811120 Automotive Body, Paint, Interior, 812990 All Other Personal Services
Home Health Care Services                Industries                                    & Glass Repair                    Religious, Grantmaking, Civic, 
621610 Home Health Care Services         713100 Amusement Parks & Arcades       811190 Other Automotive Repair &         Professional, and Similar Organizations
Other Ambulatory Health Care Services    713200 Gambling Industries                    Maintenance (including oil        813000 Religious, Grantmaking, Civic, 
621900 Other Ambulatory Health Care      713900 Other Amusement & Recreation           change & lubrication shops & car         Professional, & Similar 
       Services (including ambulance            Industries (including golf             washes)                                  Organizations (including 
       services & blood & organ banks)          courses, skiing facilities,     811210 Electronic & Precision                   condominium and homeowners 
Hospitals                                       marinas, fitness centers, &            Equipment Repair &                       associations)
                                                bowling centers)
622000 Hospitals                                                                       Maintenance                       Other
Nursing and Residential Care Facilities  Accommodation and Food                 811310 Commercial & Industrial           999000 Unclassified Establishments 
                                                                                       Machinery & Equipment (except            (unable to classify)
623000 Nursing & Residential Care        Services                                      Automotive & Electronic) Repair 
       Facilities                        Accommodation                                 & Maintenance
Social Assistance                        721110 Hotels (except Casino Hotels) & 811410 Home & Garden Equipment & 
624100 Individual & Family Services             Motels                                 Appliance Repair & Maintenance

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Index
 
                                                                  Limited liability companies    2   Refundable credits 21
A                                E                                Lobbying expenses,                 Related party transactions 10
                                                                      nondeductibility 15
Accounting methods   5           Electronic deposit                                                  Rents (expense)  12
Accounting period (Tax Year)   6   requirement     4                                                 Rents (income)  10
Address change   9               Electronic filing 3              M                                  Repairs and maintenance  12
Advance payments     9           Employee benefit programs    14  Merchant Marine capital 
Affiliated group 21              Employer identification number       construction fund:             S
Amended return   6                 (EIN) 8                            Deduction for contributions 16 Salaries and wages  11
Amortization  11                 Entities electing to be taxed as     Tax on nonqualified            Schedule:
Assembling the return   4          corporations    2                  withdrawal   20                 C 17
At-risk rules 15                 Estimated tax:                   Minimum tax:                        J 19
                                   Penalty 5 16,                      Prior year, credit for 19       K 21
                                 Estimated tax payments    5      Mutual savings banks 
B                                Extension of time to file 3          conducting life insurance       L 24
Backup withholding   21                                               business 19                     M-1 24
                                                                                                      M-3 8 24, 
Bad debts 12                     F                                                                    O 19
Balance sheets   24                                               N
Base erosion minimum tax   19,   Farming, corporations engaged                                       Section 263A costs  10
  23                               in 2                           Name change    9                   Shareholders' equity 
Beneficiaries of trusts 20       Final return 9                   Net operating loss 16 22,           adjustments    24
Business start-up expenses 11    Financial asset securitization   Nonaccrual experience              Signature 3
                                   investment trust (FASIT)   2       method  9                      Small business taxpayer  6 23, 
                                 Foreign person (defined)  22                                        Specific Instructions 7
C                                Foreign tax credit  19           O
Capital construction fund        Forms and publications, how to   Other deductions  14               T
  (See Merchant Marine capital     get 2                          Other income   10                  Tax issues, unresolved 1
  construction fund)             Future Developments    1         Other taxes  20                    Tax-exempt securities  24
Closely held corporations  11
                                                                  Overpaid estimated tax     21
Compensation of officers   11    G                                                                   Taxes and licenses 12
Consolidated return  8 22,                                                                           Total assets  9
Contributions to reduce public   General business credit   19     P                                  Travel, meals, and 
  debt 2                         General Instructions  2          Partnership income (loss)      14   entertainment   15
Contributions, charitable  13    Gross receipts  9                Passive activity limitations   11
Controlled group 19                                               Payments and refundable            U
Cost of goods sold   9           I                                    credits 20                     Uniform capitalization rules 10
Credits against tax  19          Installment sales 9              Penalties  5 16, 
                                 Interest due                     Pension, profit-sharing, etc. 
D                                  Late payment of tax  5             plans 14                       W
Deductions 10                      Look-back method    20         Personal holding company       8   What’s New   1
Depletion 14                     Interest expense  12             Personal holding company           When to file 3
Depository methods of tax        Interest income:                     tax 20                         Where to file 4
  payment  4                       Tax-exempt   22 25,            Personal service corporation     8 Who must file  2
Depreciation  14                   Taxable 10                     Preparer, tax return 3 4,          Who must sign   3
                                                                  Private delivery services     3
Direct deposit of refund 2 16,                                                                       Worksheets:
Disclosure statement   6         L                                                                    Schedule C    18
                                                                  R
Dividend income  10              LIFO recapture:
Dividends-received                 Tax on 20                      Recapture taxes  20
  deduction   17 19-             Limitations on deductions   10,  Reconciliation of income      24
Dues, membership and               13                             Recordkeeping    6
  other 15

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