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Interest Charge on DISC-Related OMB No. 1545-0123
Form 8404 Deferred Tax Liability
Department of the Treasury ▶ File Form 8404 separately from your income tax return. See Where to file below.
Internal Revenue Service ▶ Go to www.irs.gov/Form8404 for the latest information. 2021
A Check applicable box to Name of shareholder B Shareholder’s identifying
show type of taxpayer. number
Corporation Address (number, street, room, suite, or P.O. box number)
Individual C IC-DISC’s identifying
Trust or City or town, state or province, country, and ZIP or foreign postal code number
Decedent’s estate
D Shareholder’s tax year for which interest charge is required to be paid (see instructions) E Name of IC-DISC

Note: See Line-by-Line Instructions, later.
1 Taxable income or loss on tax return (actual or estimated) . . . . . . . . . . . . 1
2 Deferred DISC income from line 10, Part III, Schedule K (Form 1120-IC-DISC) . . . . . 2
3 Section 995(f)(2) adjustments to line 1 income or loss . . . . . . . . . . . . . 3
4 Combine lines 1, 2, and 3. If zero or less, don’t file this form . . . . . . . . . . . 4
5 Tax liability on line 4 amount . . . . . . . . . . . . . . . . . . . . . 5
6 Tax liability per return (actual or estimated) . . . . . . . . . . . . . . . . . 6
7 DISC-related deferred tax liability. Subtract line 6 from line 5 . . . . . . . . . . . 7
8 Base period T-bill rate factor . . . . . . . . . . . . . . . . . . . . . 8
9 Interest charge due. Multiply line 7 by line 8. (See Paying the interest charge below.) . . 9
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge
and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Sign ▲ ▲
Here
Signature and title (if any) Date
Print/Type preparer’s name Preparer’s signature Date Check if PTIN
Paid self-employed
Preparer ▶ Firm’s EIN ▶
Firm’s name
Firm’s address
Use Only ▶ Phone no.
Future Developments Where to file. File Form 8404 at the following Amended Form 8404. You are required to file
address. an amended Form 8404 only if the amount of
For the latest information about developments
related to Form 8404 and its instructions, Department of the Treasury the DISC-related deferred tax liability (line 7)
such as legislation enacted after they were Internal Revenue Service changes as a result of audit adjustments,
published, go to www.irs.gov/Form8404. Kansas City, MO 64999 changes you make by the filing of an
amended return, or if estimates were used on
Paying the interest charge. You must pay your original Form 8404 and changes were
General Instructions the interest charge shown on line 9 by the made to these estimates when you filed your
date your federal income tax for the tax year
Section references are to the Internal Revenue tax return. See Proposed Regulations section
is required to be paid. For individuals and 1.995(f)-1(j)(4) for details.
Code unless otherwise noted. corporations, the interest is generally due on
Purpose of form. Shareholders of Interest the 15th day of the 4th month following the
Charge Domestic International Sales close of the tax year. For corporations with a Specific Instructions
Corporations (IC-DISCs) use Form 8404 to tax year ending on June 30, see section Name and address. Enter the name and
figure and report their interest owed on 2006(a)(3)(B) of P.L. 114-41. address as shown on your tax return from
DISC-related deferred tax liability. Attach a check or money order made which the income or loss on line 1 of Form
Who must file.You must file Form 8404 if (a) payable to “United States Treasury” for the 8404 is obtained. If the return is a joint return,
you are a shareholder of an IC-DISC; (b) the full amount of the interest charge. Don’t also enter your spouse’s name as shown on
IC-DISC reports deferred DISC income to you combine the interest charge with any other Form 1040 or 1040-SR.
on line 10, Part III of Schedule K (Form tax or interest due. Write your identification Item A—Type of taxpayer. Check the
1120-IC-DISC); and (c) the addition of this number and “Form 8404—Interest Due” on applicable box to indicate your status as a
income would result in increased taxable your payment. taxpayer.
income if it were included on your tax return If the interest charge isn’t paid by the due Partnerships and S corporations distribute
for the tax year. date, interest, compounded daily, at the rate their share of deferred DISC income to
When to file. File Form 8404 by the due date specified under section 6621, will be imposed partners and shareholders, and the partners
of your federal income tax return (excluding on the amount of unpaid interest from the due and shareholders complete Form 8404.
extensions) for your tax year that ends with or date until the date the interest is paid. Item B—Shareholder’s identifying number.
includes the IC-DISC’s tax year end. Payment of estimated tax isn’t required for Individuals must enter their social security
For example, you are a fiscal year the interest charge. See Proposed number. Other filers must enter their employer
corporation with an August 1, 2021, to July Regulations section 1.995(f)-1(j)(3) for other identification number.
31, 2022, tax year and you are a shareholder details. Item C—IC-DISC’s identifying number.
in an IC-DISC with an August 1, 2021, to July For corporations (other than Enter the identifying number of the IC-DISC
31, 2022, tax year that reports deferred DISC S corporations), the annual interest charge is from the Schedule K (Form 1120-IC-DISC) on
income to you for its tax year ending July 31, deductible as an interest expense for the tax which the deferred DISC income was reported
2022. Because your tax year ends with the year it is paid or accrued. See Proposed to you. If income is reported to you from more
IC-DISC’s tax year, you are required to file Regulations section 1.995(f)-1(j)(2) for details than one IC-DISC, enter each IC-DISC’s
Form 8404 on or before November 15, 2022 on the tax year of deductibility. For other identifying number in item C, each IC-DISC’s
(31/ 2months after your tax year ends). filers, this interest isn’t deductible.
For Privacy Act and Paperwork Reduction Act Notice, see instructions. Cat. No. 62423Z Form 8404 (2021)

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Form 8404 (2021) Page 2
name in item E, and report the combined Line 3. Enter the net amount of all section Line 8. The base period T-bill rate is defined
income on line 2. 995(f)(2) adjustments to taxable income. See in section 995(f)(4). The base period T-bill rate
Item D—Tax year. Enter in item D the Special Computation Rules, earlier, for details is compounded daily based on the number of
calendar year or the beginning and ending on the income (loss) and expense days in the shareholder’s tax year to
dates of the tax year shown on your tax return adjustments to be made. If more than one determine the base period T-bill rate factor.
for which the interest charge is figured. adjustment is involved, attach a statement The base period T-bill rate factor for 2021 is
listing each item and show the computation of 0.000800319 for a 365-day tax year. Enter the
Special Computation Rules the net amount. appropriate factor on line 8 of Form 8404. See
Carrybacks. The determination of the Lines 5 and 6. “Tax liability” on lines 5 and 6 Rev. Rul. 2021-22, 2021-47 I.R.B. 736, for a
shareholder’s DISC-related deferred tax (with and without the deferred DISC income) short tax year or a 52-53-week tax year.
liability on lines 1 through 7 shall be made means the amount of tax imposed on the
without taking into account any capital loss IC-DISC shareholder for the tax year by Privacy Act and Paperwork Reduction Act
carryback or credit carryback to the tax year. chapter 1 of the Internal Revenue Code (other Notice. We ask for the information on this
than taxes listed below) reduced by credits form to carry out the Internal Revenue laws of
Carryovers. The determination of the allowable against such tax (other than credits the United States. We need it to figure and
shareholder’s tax liability (line 5) for the tax listed below). collect the right amount of tax. Section 995(f)
year is made by disregarding any loss, requires taxpayers to pay over to the IRS
deduction, or credit to the extent that such See Special Computation Rules, earlier, for
loss, deduction, or credit may be carried rules for carrybacks and carryovers. These interest on DISC-Related Deferred Tax
forward by the shareholder to any other tax rules may affect the line 5 computation. Liability. This form is used to determine the
amount of tax that you owe. Sections 6001
year. The following taxes aren’t taken into and 6011 require you to provide the
Note: If the tax year is the last tax year to account. requested information if the tax applies to
which the amount of carryforward (of loss, • Alternative minimum tax (individuals only). you. Section 6109 requires you to provide
deduction, or credit) may be carried, the line 3 • Any other provisions described in section your identifying number. Routine uses of this
adjustments and line 5 tax shall be figured 26(b)(2) (relating to certain other taxes treated information include disclosing it to the
with regard to the full amount of such as not imposed by chapter 1). Department of Justice for civil and criminal
carryforward. litigation and to other federal agencies, as
The following credits aren’t taken into provided by law. We may disclose the
For example, a shareholder had an NOL account. information to cities, states, the District of
carryover (originating before 2018) to 2022 of
$12,000; $10,000 income to which $10,000 of • Section 31 (taxes withheld on wages). Columbia, and U.S. commonwealths or
the NOL can be applied; $2,000 allowable • Section 32 (earned income credit). possessions to administer their tax laws. We
may also disclose this information to other
NOL carryover to 2023; and $5,000 deferred • Section 34 (fuels credit). countries under a tax treaty, to federal and
DISC income for 2022. In this case, for
purposes of figuring line 5, the allowed NOL is For 2021, a Form 1040 or 1040-SR filer or a state agencies to enforce federal nontax
$10,000. Note: If 2022 was the last tax year to Form 1120 filer using the above rules will criminal laws, or to federal law enforcement
which the $12,000 NOL (originating before generally figure their line 6 tax liability using and intelligence agencies to combat terrorism.
2018) could be carried, the full $12,000 NOL the following items shown on the following If you don’t provide this information or provide
would be allowed for purposes of figuring line lines of those forms. All other filers should use incomplete or fraudulent information, you may
5 tax liability. The additional $2,000 loss the corresponding lines of other income tax be subject to penalties.
would be entered on line 3. returns. If you haven’t yet filed your return, You aren’t required to provide the
estimate the line 6 tax liability based on all information requested on a form that is
Other adjustments. In figuring line 3 information available to you. subject to the Paperwork Reduction Act
adjustments, take into account any income
and expense adjustments that don’t result in 2021 2021 unless the form displays a valid OMB control
amounts that may be carried back or forward Form 1040 Form 1120 number. Books or records relating to a form
or 1040-SR
to other tax years. For example, in the case of Line Line or its instructions must be retained as long as
their contents may become material in the
an IC-DISC shareholder who is an individual, Tax less nonrefundable administration of any Internal Revenue law.
the amount of medical expenses allowable as credits . . . . . . 22 7, Sch. J Generally, tax returns and return information
a deduction under section 213 must be Plus: (1) Recapture taxes * * are confidential, as required by section 6103.
redetermined for purposes of line 3
adjustments. However, the amount allowable (2) Prior year minimum The time needed to complete and file this
as a charitable deduction under section 170 tax credit . . . 6b, Sch. 3 5d, Sch. J form will vary depending on individual
isn’t redetermined because this adjustment Less: (1) Alternative minimum circumstances. The estimated burden for
could result in a carryback or carryover. tax . . . . . 1, Sch. 2 business taxpayers filing this form is
See Proposed Regulations section (2) Refundable or approved under OMB control number
1.995(f)-1(d) for other details regarding these additional child tax 1545-0123.
and other special computation rules. credit . . . . 28
(3) American If you have comments concerning the
opportunity credit . 29 accuracy of these time estimates or
suggestions for making this form simpler, we
Line-by-Line Instructions (4) Premium tax credit would be happy to hear from you. You can
Line 1. Enter on line 1 the taxable income or (Form 8962) . . 9, Sch. 3 send us comments from
loss from your federal income tax return for (5) Credit for tax paid www.irs.gov/FormComments. Or you can
your tax year that ends with or includes the on undistributed write to the Internal Revenue Service, Tax
IC-DISC’s tax year end. If you haven’t yet filed capital gains (Form Forms and Publications, 1111 Constitution
your tax return, estimate your income or loss 2439) . . . . 13a, Sch. 3 20a, Sch. J Ave. NW, IR-6526, Washington, DC 20224.
based on all information available to you. See (6) Health insurance
Amended Form 8404, earlier. credit for eligible Don’t send the form to this office. Instead,
Line 2. Enter the deferred DISC income from recipients (Form see Where to file, earlier.
line 10, Part III of Schedule K (Form 8885) . . . . 13c, Sch. 3
1120-IC-DISC), for the IC-DISC tax year that *Caution: Only use the portion of Form 1040
ends with or within your tax year. or 1040-SR, line 24, or Form 1120, Schedule
J, line 10, attributable to recapture of credits
allowable against taxes treated as imposed
under chapter 1 (for example, recapture of
investment tax and low-income housing
credits). See section 26(b)(2) for a list of
recapture taxes to exclude.

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