Form 1120-F for Foreign Corporations

Protective and Section I returns are supported for tax years 2023 through 2025, and returns with effectively connected income for 2025. Tax year 2026 follows when the IRS releases the final 2026 forms. Returns are printed for filing on paper; e-file is not offered yet. Banks, insurance companies that file Form 1120-L or 1120-PC, the base erosion and anti-abuse tax and the corporate alternative minimum tax are outside the current release.

Unless an exception applies, a foreign corporation files Form 1120-F for any tax year in which it:

• was engaged in a trade or business in the United States, whether or not it had income from it and whether or not a treaty exempts that income;
• had income, gains or losses treated as effectively connected with a U.S. trade or business;
• had U.S.-source income whose tax was not fully satisfied by withholding at source; or
• wants to claim a refund, claim deductions or credits, or disclose a treaty-based return position on Form 8833.

A corporation with no U.S. trade or business whose full U.S. tax was withheld at source generally does not file. See the Instructions for Form 1120-F ↗ for the exceptions and the special returns some foreign insurance companies file instead.

A foreign corporation that does not file a timely Form 1120-F loses its deductions and credits against effectively connected income. A corporation with limited U.S. activity that concludes it has no effectively connected income, or no U.S. tax because a treaty applies and it has no U.S. permanent establishment, can file a protective return to keep those deductions and credits if the conclusion is later found to be wrong.

The software prepares the protective return as the instructions describe: the identifying information on page 1, the page 2 and 3 questions the instructions require, any Section I income, and Form 8833 when the position rests on a treaty. A protective return can also claim a Section I refund. For the timing rules and when to file one, see our protective Form 1120-F guide.

U.S. withholding agents often withhold 30% on dividends, interest or royalties when a treaty allows a lower rate, for example because the Form W-8BEN-E arrived late or was incomplete. The foreign corporation claims the difference on Form 1120-F.

Enter each Form 1042-S and the applicable rate; the software figures the correct tax for each type of income, totals the withholding, carries the refund to page 1, and lists the attachments the IRS asks for: proof of withholding, a statement of the basis for the claim, and the withholding certificate. Our Section I refund guide walks through the claim and its deadline.

For a corporation with a U.S. trade or business, the software carries Section II income and deductions to taxable income and the regular tax on Schedule J, and figures the branch profits tax in Section III from the effectively connected earnings and profits and the change in U.S. net equity, with a treaty rate where a disclosed position supports it.

You supply the results that depend on judgment and allocation, such as the interest expense allocation on Schedule I and the final allowable deductions and credits. The software does the arithmetic, carries amounts between schedules and checks that they agree.