When your corporation experiences a financial loss or has unused tax credits, you might be sitting on money the IRS owes you. Form 1139 is your fast-track ticket to getting that refund—potentially within 90 days rather than waiting months or years. This guide breaks down everything you need to know about this powerful but often misunderstood tax form.

What Form 1139 Is For

Form 1139, officially titled “Corporation Application for Tentative Refund,” is essentially a corporation's express lane to claim a quick tax refund. Think of it as the corporate equivalent of hitting the “undo” button on your previous tax payments when circumstances change in your favor.

Corporations (excluding S corporations) use this form in four primary situations:

• Net operating loss (NOL): When deductible expenses exceeded income for the year.
• Net capital loss: When capital losses outweighed capital gains.
• Unused general business credit: When you couldn’t fully utilize a credit in the current year.
• Overpayment due to a claim of right adjustment under Section 1341(b)(1), which applies when you repaid income taxed in a prior year.

What makes Form 1139 special is the speed. While a standard amended return (Form 1120-X) can take six months or longer, Form 1139 is designed for expedited processing—typically within 90 days. This accelerated timeline can be a lifeline for corporations needing improved cash flow quickly.
IRS.gov

When You’d Use Form 1139 (Late/Amended Situations)

Timing is everything with Form 1139. You must file within 12 months of the end of the tax year in which your NOL, net capital loss, unused credit, or claim of right adjustment occurred. Miss this window, and you’ll need to use the slower Form 1120-X instead.

Example Timeline

If your corporation’s fiscal year ended December 31, 2024, and you realized a net operating loss, you have until December 31, 2025, to file Form 1139. The clock starts ticking from the end of your loss year, not from when you filed your tax return.

Filing Prerequisites

• You must file your income tax return for the loss year before or simultaneously with Form 1139.
• Form 1139 is filed separately from your corporate return—never attach it to Form 1120.
• If you filed Form 1138 (Extension of Time for Payment of Taxes), you can get an additional extension by filing Form 1139 by the last day of the month that includes your return’s due date.
  IRS.gov

Key Rules for 2024

The landscape for NOL carrybacks changed significantly in recent years, and understanding the current rules is crucial.

NOL Carryback Changes

For losses incurred in tax years beginning after December 31, 2020, the general NOL carryback has been repealed, with two exceptions:

1. Farming Losses

• Can still be carried back two years.
• Defined as the smaller of:
  1. The NOL attributable only to farming businesses, or
  2. The total NOL for the year.
• Farming businesses are defined under Section 263A(e)(4).

2. Insurance Company Losses

• (Excluding life insurance companies) can also be carried back two years.
• May be carried forward up to 20 years if not fully used.

Other Rules

• For all other corporations, NOLs from 2021 forward can only be carried forward indefinitely, not carried back.
• There’s an 80% limitation: for tax years after 2020, your NOL deduction cannot exceed 80% of taxable income (before NOL, Section 199A, or Section 250 deductions).

Net Capital Losses

• Can be carried back three years and forward five years.
• Treated as short-term capital losses.
• Carryback limited so it doesn’t increase or create an NOL in the carryback year.

Unused General Business Credits

• Can generally be carried back one year (some exceptions under Section 39(d)).
• Can be carried forward up to 20 years.
  IRS.gov

Step-by-Step Filing Process (High Level)

Filing Form 1139 involves several coordinated steps.

Step 1: Prepare Your Documentation

Gather:

• Loss year tax return (at least the first two pages of Form 1120)
• All schedules creating the carryback (e.g., Schedule D or Form 3800)
• Any Form 8886 if the loss involves reportable transactions

Step 2: Complete the Header Section

Enter your corporation’s basic information—name, EIN, address, incorporation date, and contact details. Accuracy here prevents delays.

Step 3: Identify Your Refund Reason (Lines 1–3)

Check the appropriate box and enter the dollar amount for your NOL, capital loss, unused credit, or other claim. Specify the loss year and when you filed that return.

Step 4: Answer Qualification Questions (Lines 4–10)

Respond to yes/no questions on:

• Consolidated returns
• Form 1138 filing
• Dissolution status
• Tax Court petitions
• Reportable transactions

Step 5: Calculate the Tax Decrease (Lines 11–29)

Use columns to show “before carryback” and “after carryback” amounts for up to three prior years. Recalculate taxable income, tax, and credits accordingly.

Step 6: Attach Required Documentation

Include:

• All recomputed schedules
• Form 8302 (for refunds over $1 million, to request direct deposit)

Step 7: Sign and File Separately

An officer must sign under penalty of perjury. Mail Form 1139 separately to the IRS service center where you file corporate returns.
IRS.gov

Common Mistakes and How to Avoid Them

Even experienced tax professionals stumble with Form 1139. Here are the most common pitfalls:

Filing Before the Tax Return

You cannot file Form 1139 before filing your Form 1120 for the loss year. Always confirm submission first.

Missing the 12-Month Deadline

Once 12 months pass from the end of your loss year, Form 1139 is no longer an option. Use reminders to stay on track.

Incomplete Documentation

Recompute every affected schedule for each carryback year. Missing a single schedule can disqualify your claim.

Math Errors and Omissions

Errors not corrected within 90 days cause automatic disallowance. Double-check all figures.

Ignoring the 80% NOL Limitation

Apply the 80% taxable income cap to post-2020 NOLs. Failing to do so triggers recalculations.

Filing with Your Tax Return

Form 1139 must be filed separately—attaching it delays processing.

Forgetting Consolidated Return Rules

If you’re part of a consolidated group, review Line 5 instructions carefully.
IRS.gov

What Happens After You File

Once your Form 1139 is received, the 90-day processing window begins from the later of:

1. The date the IRS receives your complete application, or
2. The last day of the month that includes your return’s due date (with extensions).

Review and Refund Process

The IRS reviews for completeness and accuracy but does not perform a full audit at this stage. The refund is tentative, meaning later audits are still possible.

Possible Outcomes

• Approval: Refund issued (direct deposit or check).
• Disallowance: Application denied for omissions or math errors—cannot be appealed. You must file Form 1120-X instead.
• Adjustment: IRS makes corrections and issues a partial refund.

Overpayment Notice

If a refund is later deemed excessive, the IRS can bill you for the difference, plus interest and potential penalties.
IRS.gov

FAQs

Can S corporations use Form 1139?

No. Form 1139 is only for C corporations and insurance companies. S corporations’ losses flow through to shareholders, who file Form 1045 instead.

What’s the difference between Form 1139 and Form 1120-X?

Form 1139 is processed in about 90 days but can be denied without appeal rights. Form 1120-X takes longer but allows for appeals.

Can I carry back an NOL from 2024?

Generally no—unless you’re a farming business or non-life insurance company. Post-2020 losses can only be carried forward indefinitely (80% limitation applies).

What if I make a mistake on Form 1139?

Material omissions or math errors not fixed within 90 days cause disallowance. You must then file Form 1120-X instead.

Can I e-file Form 1139?

No. It must be mailed on paper, even if your corporate return was e-filed.

How do I track my Form 1139 after filing?

There’s no “Where’s My Refund?” tool. If no update after 90 days, contact your IRS service center. Always send via certified mail.

Can I withdraw my Form 1139 application?

No formal withdrawal process exists. However, you can later correct via Form 1120-X if needed.

Sources

All information in this guide comes from official IRS publications, including:

• Form 1139 About Page
• Instructions for Form 1139 (Rev. November 2021)
• Form 1139

For the most current information and any legislative updates, always visit IRS.gov/Form1139.