IRS Form 1120-F (U.S. Income Tax Return of a Foreign Corporation) is used by foreign corporations to report their income, expenses, gains, losses, deductions, tax credits, dividend distributions, and federal corporate income tax liability.

The tax filing is required when a foreign corporation is engaged in a U.S. trade or business and generates effectively connected income (ECI) with that trade or business, or receives U.S. source income that is not effectively connected with a U.S. trade or business.

Purpose of Form 1120-F
  • Income Reporting. To report U.S. source income, gains, losses, and deductions of a foreign corporation.
  • Federal Tax Calculation. To calculate the federal corporate income tax liability of the foreign corporation based on those U.S. activities and U.S. source income.
Who Must File
  • Foreign Corporations. Any foreign corporation that is engaged in a trade or business within the U.S. during the tax year and generates gross ECI should file Form 1120-F. Even if a corporation operates at a net taxable loss it must still file Form 1120-F if it has GROSS income.
  • Due Date. Form 1120-F must be filed annually on or before the 15th day of the 6th month after the end of the corporation’s tax year. For calendar-year corporations, the deadline is June 15th of each year. An extension can be requested by filing Form 7004 (Application for Extension of Time to File).
  • Protective Filings. Some foreign corporations conduct limited activities in the U.S. that do not give rise to a U.S. trade or business. Although the corporation is not required to file Form 1120-F, it may choose to file on a “protective” basis in the event the IRS audits it at a later date and determines its initial tax position was incorrect.
Information Required on Form 1120-F
  • Basic Information: Foreign corporation name, address, Employer Identification Number (EIN), country of incorporation, date incorporated, principal business locations inside and outside of the U.S., and whether the corporation has a U.S. agent. If the foreign corporation does not have an EIN, it must apply for one using Form SS-4 (Application for EIN).
  • Income and Expense. The corporation must separately reports its income effectively connected with a U.S. trade or business, and its U.S. source income that is not effectively connected with a U.S. trade or business. Non-ECI income is generally U.S. source FDAP income (e.g., interest, dividends, royalties, capital gains, rents, etc.).
  • Corporate Tax Calculation. The foreign corporation calculates its federal corporate income tax on its net taxable income. The current tax rate is 21% on net taxable income.
  • Branch Profits Tax (BPT). In addition to the regular corporate income taxes on net taxable income, a foreign corporation may also be subject to BPT on any deemed dividend distributions. A deemed dividend distribution is measured as a reduction in U.S. net equity.
Video Tutorials

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Additional Information

Foreign corporations can find more information in the Form 1120-F Instructions.