IRS Form 1120-F – U.S. Income Tax Return of a Foreign Corporation

IRS Form 1120-F – Foreign corporations with U.S. activities must navigate complex U.S. tax rules. IRS Form 1120-F, the U.S. Income Tax Return of a Foreign Corporation, is the key form for reporting U.S.-source income, Effectively Connected Income (ECI), non-ECI income, deductions, credits, branch profits tax, and excess interest tax. It helps calculate tax liability, claim refunds or treaty benefits, and comply with sections 882, 884, and related rules.

This 2025 guide (current as of 2026) draws from official IRS sources, including the form, instructions, and about page. Always check IRS.gov/Form1120F for updates, as tax laws change (e.g., recent CAMT relief, section 1062 deferral, R&E deductions).

What Is IRS Form 1120-F and Who Must File It?

Form 1120-F reports a foreign corporation’s:

  • Income, gains, losses, deductions, and credits.
  • U.S. income tax liability.
  • Branch profits tax (section 884) and tax on excess interest.
  • Treaty-based return positions (via Form 8833 attachment).
  • Refund claims for overwithholding.

Who must file (unless an exception applies):

  • Engaged in a U.S. trade or business at any time during the tax year (has or is treated as having ECI).
  • Has U.S.-source income (e.g., FDAP: fixed, determinable, annual, or periodic like interest, dividends, rents, royalties) where required withholding under chapter 3 (section 1442) was not fully satisfied.
  • Needs to claim deductions/credits allocable to ECI.
  • Discloses treaty-based positions reducing tax (attach Form 8833).
  • Qualified derivatives dealer (QDD) or other specific cases.
  • To protect rights to deductions/credits if ECI status is uncertain (“protective return”).
  • Receiver, assignee, trustee in dissolution/bankruptcy, or U.S. agent in certain cases.

Entities electing corporate classification (Form 8832) file under the same rules. Partnerships with foreign corporate partners may trigger filing via distributive share ECI or section 864(c)(8) gain on partnership interest transfer.

Exceptions (no filing generally required):

  • No U.S. trade/business, no ECI, and full withholding on FDAP income (and no other taxable U.S. income).
  • Income exempt under sections 881(c), 881(d), 883 (ships/aircraft), 892, etc., with no other requirements.
  • Certain special returns (e.g., Form 1120-L for life insurance companies).

Protective filing is recommended when ECI status or treaty exemption is uncertain to preserve deductions/credits and statute of limitations. Complete identifying information, exclusions/refunds, attach Form 8833 if applicable, and optionally Schedules I/P.

Form 1120-F Filing Deadlines and Extensions

Deadlines depend on whether the foreign corporation maintains an office or place of business in the United States:

  • With U.S. office/place of business: 15th day of the 4th month after tax year-end (e.g., April 15, 2026, for calendar year 2025; adjust for fiscal/short years).
  • Without U.S. office/place of business: 15th day of the 6th month after tax year-end (e.g., June 15, 2026, for calendar year 2025).

If the due date falls on a weekend/holiday, it shifts to the next business day. Use Form 7004 for an automatic extension (generally 6 months; see Reg. 1.6081-5 for specifics). File Form 7004 by the original due date.

E-filing mandate — Corporations filing 10 or more returns (income, employment, excise, information returns, etc.) in a calendar year must e-file Form 1120-F (and related forms/schedules) for tax years beginning in 2024 or later. Hardship waivers available; religious exemptions noted on return. Large corporations (assets ≥ $10M) often require Schedule M-3 and may have additional e-file rules.

Paper filing address — Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409 (or specific Treasury addresses if payment enclosed; check instructions or IRS.gov/PDSStreetAddresses for private delivery services).

Key Sections of Form 1120-F and How to Complete It?

The 2025 Form 1120-F has multiple pages with core sections:

  • Identification and Page 1 — Name, address, EIN, principal business activity (NAICS code), total assets, questions (e.g., ECI yes/no, treaty positions, related-party transactions via Form 5472, QDD status).
  • Section I (Non-ECI Income) — U.S.-source FDAP and other non-ECI income (interest, dividends, rents, royalties, annuities, gains, gross transportation income taxed at 4%, etc.). Taxed at flat 30% (or lower treaty rate); generally no deductions allowed. Attach Form(s) 1042-S, 8805, 8288-A for withholding credits. Multiple rates require statement.
  • Section II (ECI Income) — Effectively connected gross income (sales, dividends, interest, rents, royalties, capital gains via Schedule D, Form 4797 gains/losses, other). Deductions (salaries, rents, interest via Schedule I, depreciation via Form 4562, charitable, etc.) allocated/apportioned to ECI (via Schedule H). Taxable income at regular corporate rates (21% federal + possible state). NOL/special deductions (Schedule C for dividends-received).
  • Section III — Branch profits tax (Part I: 30% or treaty rate on “dividend equivalent amount” = effectively connected earnings and profits not reinvested in U.S. net equity) and tax on excess interest (Part II: on interest apportioned to ECI exceeding U.S. branch interest paid, via Schedule I). Attach statements for adjustments, U.S. net equity, etc.
  • Tax Computation (Schedule J) — Income tax, base erosion minimum tax (Form 8991), CAMT (Form 4626), credits (Form 1118 foreign tax, 3800 general business, etc.), other taxes/recapture.
  • Balance Sheet (Schedule L), Reconciliation (M-1 or M-3 if assets ≥ $10M), Overpayment from Withholding (Schedule W).

Key required schedules (attach as applicable):

  • Schedule H — Deductions allocation/apportionment to ECI (Reg. §1.861-8).
  • Schedule I — Interest expense allocation (Reg. §1.882-5).
  • Schedule P — Partnership interests with ECI distributive shares/outside basis.
  • Schedule C — Dividends and special deductions.
  • Schedule M-1/M-3 — Income reconciliation.
  • Schedule S/V — Ships/aircraft, gross transportation income.
  • Schedule Q — For QDDs.
  • Form 8833 — Treaty positions.
  • Form 8990, 8991, 4626, 1062, UTP, etc. — As triggered by size/activity.

Complete all applicable lines/schedules; attach statements for “other” items, multiple rates, or complex calculations.

Branch Profits Tax, Excess Interest, and Treaty Considerations

Foreign corporations with U.S. effectively connected earnings and profits (ECEP) may owe 30% branch profits tax (or lower treaty rate if qualified resident and limitation-on-benefits met) on the dividend equivalent amount not reinvested in U.S. net equity. Complete Section III, Part I; exceptions for complete termination (file Form 8848).

Tax on excess interest (Section III, Part II) applies when interest expense allocable to ECI (Schedule I) exceeds U.S. branch interest paid; treated as paid to the foreign home office.

Treaty benefits require Form 8833 disclosure if treaty overrides Code provisions (e.g., no permanent establishment, reduced rates, branch profits article). Check item W(1) on page 2.

Penalties, Estimated Taxes, and Common Pitfalls

  • Late filing: 5% of unpaid tax per month/part month (max 25%); minimum penalty (for returns due in 2026) is the smaller of unpaid tax or $525 if >60 days late.
  • Late payment: 0.5% per month (max 25%).
  • Interest accrues on late taxes/penalties.
  • Estimated tax penalty: Use Form 2220 if expected tax ≥ $500 (generally required only if U.S. office; relief available for certain CAMT/section 1062 items). No estimated payments required for branch profits tax itself.

Common issues: Failure to allocate/apportion deductions properly, missing withholding documentation, incorrect treaty disclosure, late protective returns, or ignoring partnership reporting (Schedule P, K-3).

Estimated tax payments — Required via EFTPS (if U.S. office) or check/wire; installments due 4th, 6th, 9th, 12th months. Quick refund of overpayments via Form 4466 possible.

Where to Get the Form, Instructions, and Help?

Filing Form 1120-F correctly avoids penalties, secures refunds, and maintains treaty benefits. Review your specific facts (ECI presence, U.S. assets/liabilities, withholding credits, treaty eligibility) against the latest IRS instructions, and consider a protective return if in doubt. For personalized advice, work with a qualified tax advisor familiar with cross-border operations.