What Form 1139 Is For

Form 1139 is a special IRS form that allows corporations (except S corporations) to apply for a "quick refund" of taxes they've already paid. Think of it as an express lane for getting your money back when certain tax situations change in your favor.

The form applies to four main scenarios. First, if your corporation suffered a net operating loss (NOL)—meaning your business deductions exceeded your income—you can carry that loss back to profitable years when you paid taxes and get a refund. Second, if you had a net capital loss from selling investments or assets, you can similarly apply those losses to years with capital gains. Third, if your business earned tax credits you couldn't use in the current year (like the general business credit), you can carry them back for a refund. Finally, if you had to repay income you previously reported under a "claim of right" situation, you may qualify for an adjustment under section 1341(b)(1).

The key advantage of Form 1139 over filing an amended return (Form 1120X) is speed. The IRS is legally required to process Form 1139 within 90 days, while amended returns can take six months or longer with no guaranteed timeline. IRS.gov

When You’d Use Form 1139

Timing is critical with Form 1139. You must file it within 12 months of the end of the tax year in which the loss, credit, or adjustment occurred. For example, if your corporation had a net operating loss for the calendar year 2015, you would need to file Form 1139 by December 31, 2016.

There's an important catch: you cannot file Form 1139 until you've filed your tax return for the loss year. The IRS won't process your refund application if they don't have your original return on file. If you're cutting it close on the 12-month deadline, you can file both simultaneously, but make sure you file them separately—never attach Form 1139 to your tax return.

If you miss the 12-month window, you're not entirely out of luck. You can still file an amended return (Form 1120X) to claim your refund, but you'll have up to three years from the original return's due date instead of just 12 months. The trade-off is waiting longer for processing—potentially six months or more versus the 90-day statutory deadline for Form 1139. IRS.gov

Key Rules or Details for 2015

For corporations with losses in 2015, the standard carryback rules applied under the tax law at that time. A net operating loss from 2015 could be carried back two years (to 2013 and 2014) and forward up to 20 years. This means you would first apply your 2015 loss to reduce taxable income in 2013; any remaining loss would then be applied to 2014, and anything still unused would carry forward to 2016 and beyond.

Net capital losses from 2015 worked differently—they could be carried back three years (to 2012, 2013, and 2014) as short-term capital losses. However, you could only carry them back to the extent they didn't create or increase an NOL in those earlier years. Any unused capital loss could then be carried forward five years.

Corporations had the option to waive the carryback period entirely and only carry losses forward. To make this election for 2015, you would check a box on your Form 1120, Schedule K, line 11, and file your return by the due date including extensions. Once made, this election was irrevocable—you couldn't change your mind later.

One crucial calculation rule for 2015 NOLs: when computing your loss, certain deductions like the dividends-received deduction, the section 199 domestic production activities deduction, and any NOL carryovers from other years had special limitations. The IRS instructions provide detailed worksheets for these adjustments. IRS.gov

Step-by-Step (High Level)

Step 1: File Your Current Year Return First.

Before touching Form 1139, make absolutely certain you've filed your 2015 corporate tax return showing the loss or unused credit. The IRS cannot process a tentative refund application without the underlying return on file.

Step 2: Gather Your Prior Year Returns.

Pull out your original tax returns for the years you'll be carrying the loss back to—2013 and 2014 for a 2015 NOL. You'll need the actual forms and schedules to recalculate your taxes.

Step 3: Recalculate Prior Year Taxes.

This is the heart of the process. For each carryback year, refigure your taxable income by applying the loss, then recalculate your tax liability. Lines 11 through 28 on Form 1139 walk you through this calculation with side-by-side "before" and "after" columns. Attach recomputed schedules like Schedule D for capital losses or Form 3800 for business credits.

Step 4: Complete the Application.

Fill out Form 1139 with your corporation's information, specify the amount of loss or credit being carried back, and show your calculations. The form has specific columns for the second preceding year, first preceding year, etc.—make sure you label them correctly with the tax year dates.

Step 5: Assemble Required Attachments.

You must attach copies of several documents: the first two pages of your 2015 return, all schedules that generated the loss or credit (like Schedule D or Form 3800), any election statements, all recomputed forms for the carryback years, and any Forms 8886 (reportable transaction disclosures) from your return.

Step 6: File Separately.

Mail Form 1139 to the same IRS Service Center where you file your regular corporate returns. Do not attach it to your current or amended return—it must be filed as a standalone submission. IRS.gov

Common Mistakes and How to Avoid Them

Mistake #1: Filing before the tax return is processed.

The most frequent error is submitting Form 1139 when the IRS hasn't yet received or processed your loss-year return. The 90-day processing clock doesn't even start until both the return and Form 1139 are on file. Always verify your return was received first.

Mistake #2: Math errors and material omissions.

Unlike regular refund claims, Form 1139 can be summarily disallowed if there are calculation mistakes or missing information—and you cannot sue the IRS over that disallowance. Triple-check your arithmetic and make sure every required schedule is attached. Use the IRS's own worksheets from the instructions rather than creating your own.

Mistake #3: Confusing carryback years.

Corporations sometimes carry losses to the wrong years or in the wrong order. Remember: you must start with the earliest year first. For a 2015 NOL, you apply it to 2013 first, then 2014. You cannot skip a year unless you've elected to waive the carryback entirely.

Mistake #4: Forgetting about released credits.

When an NOL eliminates income in a prior year, it may "release" foreign tax credits or general business credits you used that year. These released credits must be carried back to even earlier years or forward to later years—you can't just ignore them. You'll need to file Form 1120X separately to claim these released credits, as Form 1139 doesn't handle them.

Mistake #5: Missing the 12-month deadline.

Once that calendar flips past the 12-month mark after your loss year ends, Form 1139 is no longer available. If you're approaching the deadline and need more time to gather information, consider whether the three-year amended return window with Form 1120X might be a better fit. IRS.gov

What Happens After You File

Once the IRS receives your complete Form 1139, the clock starts ticking on their 90-day processing requirement. The deadline begins on the later of two dates: when they receive your complete application, or the last day of the month that includes your return's due date (including extensions) for the loss year.

Within this 90-day window, an IRS examiner will review your application. They'll verify your loss calculations, check that you've carried back the correct amounts to the right years, and confirm your refigured tax computations. If everything checks out, the IRS will send you a refund check or direct deposit for the overpayment.

However, receiving your refund doesn't mean the IRS agrees with your position. The payment is tentative, not final. The IRS explicitly reserves the right to audit the application later and assess additional penalties and interest if they determine the claimed deductions or credits were overstated. This can happen if property values were inflated, deductions were based on negligence, or there was a substantial understatement of income.

If your application has material omissions or math errors that aren't corrected within the 90-day period, the IRS can disallow it entirely. When this happens, you cannot sue them over the denial—your only recourse is filing a regular amended return (Form 1120X) and going through that process instead.

The IRS may contact you during the 90-day period if they need clarification or additional documentation. To ensure smooth communication, consider attaching a Form 2848 (Power of Attorney) to authorize your accountant or attorney to discuss the application on your behalf.

If the IRS later determines any amount was erroneously refunded, they will bill you as if there were a math error on your original return—with interest accruing from the date of the refund. IRS.gov

FAQs

Q1: Can I file Form 1139 electronically?

No. As of 2015 and continuing today, Form 1139 must be filed by mail. You cannot e-file it even if you e-filed your original corporate return. It must be mailed separately to the IRS Service Center where you file your regular corporate returns.

Q2: What's the difference between Form 1139 and Form 1120X?

Form 1139 is for tentative refunds processed within 90 days and cannot be challenged in court if denied. Form 1120X is an amended return processed within 6+ months that the IRS may audit, but you can sue if they deny your claim. Form 1139 is faster but offers fewer legal protections.

Q3: Can I still file Form 1139 for 2015 losses today (in 2025)?

No. The 12-month deadline has long passed. For a 2015 loss, Form 1139 needed to be filed by December 31, 2016 (or 12 months after your fiscal year ended). However, you may still be within the three-year statute of limitations to file Form 1120X if you filed your 2015 return by April 2016 or later.

Q4: Do I need to file separate Forms 1139 for each carryback year?

No. One Form 1139 covers all the carryback years for a single loss year. The form has multiple column sets—(a) and (b), (c) and (d), (e) and (f)—so you can show the before-and-after calculations for the second preceding year, first preceding year, etc., all on the same form.

Q5: What happens if I make an election to waive the carryback period?

If you check the waiver box on your 2015 Form 1120, Schedule K, line 11, your NOL cannot be carried back—it can only be carried forward to future years. This election is permanent and irrevocable. You might do this to preserve credits in prior years or if you expect higher tax rates in future years.

Q6: Can consolidated groups file Form 1139?

Yes. When a parent corporation files a consolidated return, it can file Form 1139 on behalf of the group. However, special rules apply if a corporation joins or leaves the consolidated group. The refund must be sent to the common parent (or designated agent) even if the loss arose in a subsidiary's separate return year before joining.

Q7: How do I track my Form 1139 after filing?

Unlike individual tax returns, you cannot check Form 1139 status on "Where's My Refund?" online. You'll need to wait for the IRS to contact you or send your refund. If 90 days pass without hearing anything, contact the IRS Service Center where you filed, as they may need additional information from you. IRS.gov