IRS Form 1120-S (Schedule B-1) – S corporations must file Form 1120-S annually to report income, deductions, and credits. Many also need to attach Schedule B-1 (Form 1120-S) — officially titled Information on Certain Shareholders of an S Corporation — when specific shareholder structures exist. This schedule provides the IRS with transparency into indirect or non-standard ownership, helping verify S corporation eligibility rules (limited to individuals, certain trusts, and estates) and ensuring proper reporting of Schedule K-1 items.
As of the 2025 tax year (returns filed in 2026), the form remains the December 2020 revision, with no updates noted in official IRS publications. All information below comes directly from IRS.gov sources, including the form PDF, Form 1120-S instructions, and the About Form 1120-S page.
What Is Schedule B-1 (Form 1120-S)?
Schedule B-1 is a two-page supplemental schedule attached to Form 1120-S. It discloses details about any shareholder of record that is not a direct individual owner. This includes:
- Disregarded entities (e.g., single-member LLCs taxed as disregarded for federal purposes)
- Trusts (grantor trusts, QSSTs, ESBTs)
- Estates
- Nominees or similar persons (e.g., guardians, custodians, agents)
The schedule captures both the shareholder of record and the ultimate individual or entity responsible for reporting the K-1 income, deductions, and credits on their personal or entity tax return.
Official IRS purpose (from the form): “Use Schedule B-1 (Form 1120-S) to provide the information applicable to any shareholder in the S corporation that was a disregarded entity, a trust, an estate, or a nominee or similar person at any time during the tax year.”
Who Must File Schedule B-1?
File Schedule B-1 only if you answer “Yes” to Schedule B, Question 3 on the main Form 1120-S:
“At any time during the tax year, was any shareholder of the corporation a disregarded entity, a trust, an estate, or a nominee or similar person?”
- This is a yes/no trigger question on page 2 of Form 1120-S (2025).
- Even one qualifying shareholder during the year requires the full schedule.
- Provide information for every such shareholder, even if their owner/beneficiary details already appear on Schedule K-1.
Common scenarios requiring Schedule B-1:
- Single-member LLC owns S corp stock (LLC is disregarded; individual owner reported in column d).
- Stock held in a grantor trust, QSST, or ESBT.
- Estate owns shares.
- Nominee (e.g., broker or agent) holds stock for another person.
Note: A direct individual shareholder (even 100% owner) does not trigger Schedule B-1 — they are not a “disregarded entity, trust, estate, or nominee.”
How to Complete Schedule B-1? (Step-by-Step)
The form uses a simple table format with four columns. List each qualifying shareholder on a separate line. Attach the completed schedule to your Form 1120-S e-file or paper return.
| Column | What to Enter | Examples & Tips |
|---|---|---|
| (a) Name of Shareholder of Record | Full legal name of the entity or person whose name appears as the shareholder on corporate records. | – Disregarded LLC: “ABC Holdings LLC” – Trust: “John Doe Revocable Trust” – Estate: “Estate of Jane Smith” – Nominee: “ABC Brokerage Services” |
| (b) SSN or EIN (if any) of Shareholder of Record | Tax ID of the entity/person in column (a). Leave blank if none. | Use EIN for LLCs/trusts/estates; SSN/ITIN rarely applies here. |
| (c) Type of Shareholder of Record | Describe the entity type. | “Disregarded entity”, “Grantor trust”, “QSST”, “ESBT”, “Estate”, “Nominee”, “Guardian”, “Custodian”, etc. |
| (d) Name and SSN or EIN of Individual/Entity Responsible for Reporting K-1 Items | The ultimate owner or beneficiary who actually reports the pass-through items on their return. | – Disregarded entity → Name & SSN of the single owner (must be S corp-eligible individual). – Grantor trust → Name & SSN of grantor. – QSST → Name & SSN of the single beneficiary. – ESBT → Use columns (a) and (b) info only; do not list beneficiaries. – Estate → Use columns (a) and (b) info only. |
Key reminders from IRS instructions on the form:
- Complete for any time during the tax year (not just year-end).
- For disregarded entities, report even if the owner’s info is already on K-1.
- The responsible party in column (d) must be eligible to be an S corp shareholder (e.g., no corporations or partnerships as ultimate owners in most cases).
Why Schedule B-1 Matters for S Corporations?
S corporations enjoy pass-through taxation but face strict eligibility rules under IRC Section 1361. Schedule B-1 gives the IRS visibility into layered ownership to:
- Confirm all ultimate shareholders qualify (U.S. citizens/residents, certain trusts, estates).
- Match K-1 reporting to the correct taxpayer.
- Prevent ineligible shareholders that could invalidate the S election.
Failing to attach a required Schedule B-1 can delay processing or trigger IRS correspondence. While no separate penalty exists for this schedule alone, incomplete returns may incur failure-to-file penalties or accuracy-related penalties.
Download the Official Form and Instructions
- Schedule B-1 PDF (provided link): https://www.irs.gov/pub/irs-pdf/f1120ssb.pdf
- Full 2025 Form 1120-S (includes Schedule B): https://www.irs.gov/pub/irs-pdf/f1120s.pdf
- 2025 Instructions for Form 1120-S: https://www.irs.gov/pub/irs-pdf/i1120s.pdf (see Schedule B section)
- Latest information: IRS.gov/Form1120S
Common Mistakes to Avoid
- Answering “No” to Schedule B Question 3 when a single-member LLC holds shares.
- Leaving column (d) blank for disregarded entities.
- Using the trust name in column (d) instead of the grantor/beneficiary.
- Forgetting to attach the schedule when required.
Final Tips for 2025 Tax Filings
Most tax software (e.g., Lacerte, UltraTax, Drake) automatically generates Schedule B-1 when Schedule B Question 3 is “Yes.” Double-check the output against the official form. Always use the latest IRS PDFs for paper filings.
For complex trusts, estates, or multi-layer ownership, consult a tax professional or CPA familiar with S corporation rules to avoid jeopardizing your S election.
Need the form? Download it directly here: https://www.irs.gov/pub/irs-pdf/f1120ssb.pdf
Stay compliant and file accurately — proper use of Schedule B-1 keeps your S corporation in good standing with the IRS. For the most current guidance, always check IRS.gov/Form1120S before filing.
Last updated for 2025 tax year based on IRS publications as of February 2026.