Printable Form 2026

IRS Form 7208 – Excise Tax on Repurchase of Corporate Stock

IRS Form 7208 – The IRS Form 7208 (Excise Tax on Repurchase of Corporate Stock) is the official form corporations use to calculate and report the 1% federal excise tax on stock repurchases (buybacks). Enacted as part of the Inflation Reduction Act of 2022, this tax applies to repurchases after December 31, 2022, by publicly traded “covered corporations” and certain affiliates.

Form 7208 must be attached to Form 720 (Quarterly Federal Excise Tax Return) and filed once per taxable year. All information below comes directly from official IRS sources, including the June 2024 Form 7208, December 2025 Instructions for Form 7208, and final regulations (T.D. 10037) issued November 24, 2025.

What Is the Stock Repurchase Excise Tax?

The tax equals 1% of the fair market value (FMV) of stock repurchased during the taxable year, after allowable reductions for:

  • Qualifying exceptions
  • Contributions to employer-sponsored retirement plans
  • Netting against new stock issuances

Covered corporations include:

  • Domestic corporations whose stock trades on an established securities market
  • Certain applicable foreign corporations (via their specified affiliates)
  • Expatriated entities and covered surrogate foreign corporations

Regulated investment companies (RICs), REITs, and certain ’40 Act funds are exempt from filing.

Who Must File IRS Form 7208?

You must file if any of the following apply during your taxable year:

  • Your corporation (or a specified affiliate) repurchased its own stock
  • You are an applicable specified affiliate of an applicable foreign corporation that acquired the foreign corporation’s stock
  • You are an expatriated entity with respect to a covered surrogate foreign corporation

$1 million de minimis threshold:

  • If the total FMV of repurchases (Form 7208, line 3) is $1 million or less and you are not an applicable specified affiliate → Complete only Part I and attach to Form 720 (no tax due).
  • Applicable specified affiliates must aggregate repurchases across all affiliates for the threshold. If the group total exceeds $1M, the form must be fully completed.

Even if no tax is due, filing is required if repurchases occurred and you meet the covered-corporation criteria.

Key Definitions (From December 2025 Instructions)

  • Repurchase: Any redemption under section 317(b) or economically similar transaction (e.g., open-market purchases, tender offers, accelerated share repurchases, certain reorganizations, split-offs).
  • Stock: Any instrument treated as stock for federal tax purposes at issuance (includes treasury stock; excludes certain preferred stock described in section 1504(a)(4) or additional tier 1 capital).
  • Specified affiliate: >50% ownership (vote or value) of another corporation or partnership.
  • Established securities market: Defined under Treas. Reg. §1.7704-1(b).

Step-by-Step: How to Complete Form 7208?

Part I – Total Stock Repurchases
List each repurchase transaction (or aggregate same-class open-market repurchases). Columns include: entity name/EIN, transaction type (OMR, Tender Offer, ASR, etc.), stock symbol/CUSIP, shares repurchased, and FMV.
→ Line 3 = Total FMV of all repurchases.

Part II – Exceptions (subtract these from line 3)

  • 5a: Certain section 355 split-offs
  • 5b: Repurchases treated as dividends by the shareholder
  • 5d: Dealer repurchases in the ordinary course of business
  • Line 5e = Total exceptions

Part III – Employer-Sponsored Retirement Plan Contributions
Reduce the taxable amount by the FMV of repurchased shares (or equivalent value) contributed to qualified retirement plans (e.g., 401(k), ESOP) by the Form 720 due date.

Part IV – Stock Issued or Provided (netting rule)

  • 9a: Stock issued to your employees/service providers
  • 9b/9c: Additional issuances (for covered corporations only)
  • Line 9d = Total issuances (reduces taxable base)

Part V – Tax Computation

  • Line 10 = Net taxable repurchases (line 3 – exceptions – retirement contributions – issuances)
  • Line 11 = 1% excise tax (enter on Form 720, IRS No. 150)

If line 10 is zero or negative, enter -0- (no tax due).

Filing Deadlines for Form 7208 (2026 and Beyond)

Form 7208 is filed annually with the Form 720 for the first full calendar quarter after your tax year ends. No extensions allowed.

Tax Year End Form 720 Quarter Due Date (2026 example for 2025 tax year)
Dec 31 1st Quarter (Jan–Mar) April 30, 2026
Mar 31 2nd Quarter (Apr–Jun) July 31, 2026
Jun 30 3rd Quarter (Jul–Sep) October 31, 2026
Sep 30 4th Quarter (Oct–Dec) January 31, 2027

Payment is due with the return. Electronic filing of Form 720 is strongly encouraged.

Recent Updates – Final Regulations (November 2025)

The IRS issued final regulations on November 24, 2025 (effective immediately, with retroactive application options). Key changes narrow the scope compared with earlier proposed rules and provide clearer guidance on:

  • Economically similar transactions
  • Netting rules for non-stock instruments
  • Preferred stock exclusions
  • Retirement plan contribution timing

Corporations that filed earlier Form 7208 using prior guidance may qualify for refunds. File Form 720-X (Amended Quarterly Federal Excise Tax Return) with a corrected “Amended” Form 7208.

Penalties for Non-Compliance

  • Failure to file: 5% per month (max 25%) of unpaid tax
  • Failure to pay: 0.5% per month (max 25%)
  • Interest accrues from the due date
  • Negligence or fraud penalties may also apply (sections 6662/6663)

Maintain detailed records supporting all amounts (Treas. Reg. §58.6001-1).

How to Download IRS Form 7208 and Instructions?

Always use the most current versions from IRS.gov.

Final Tips for Compliance in 2026

  1. Track every repurchase and issuance throughout the year.
  2. Coordinate with your tax and legal teams early—especially for cross-border or affiliate transactions.
  3. Consider the impact of the 2025 final regulations on prior-year filings.
  4. Use IRS-approved e-file software for Form 720 to ensure faster processing and acknowledgment.

This article is for informational purposes only and is not tax or legal advice. Tax rules are complex and facts-and-circumstances dependent. Consult a qualified tax professional or refer directly to IRS.gov for your specific situation.

For the most up-to-date guidance, visit the official IRS pages:

Stay compliant and avoid unnecessary penalties—properly completed Form 7208 ensures smooth reporting of your corporate stock repurchase obligations.