IRS Form 1120-PC (2018): P&C Insurance Tax Return

What IRS Form 1120-PC (2018) Is For

IRS Form 1120-PC (2018) is used by casualty insurance companies and other nonlife insurance companies to report taxable income and calculate corporate income tax for the tax year. The form allows insurance companies to determine total tax, deductions, and credits owed to the Internal Revenue Service. It applies to domestic nonlife insurance companies and certain foreign corporations engaged in U.S. insurance business.

When You’d Use IRS Form 1120-PC (2018)

Casualty, life, and nonlife insurance companies must file Form 1120-PC if required to report income and pay corporate returns. This includes companies that report investment income, taxable investment income, capital gains, and interest income during their corporation’s tax year. Companies may also need to file an amended return if errors occurred or if new tax information becomes available.

Key Rules or Details for 2018

• Filing Deadline: Corporate returns must be filed by the 15th day of the fourth month after the end of the corporation’s tax year. For most companies, this falls in April unless an extension applies.
  
  
• Eligibility Requirements: A domestic nonlife insurance company or foreign corporation engaged in business in the United States must file if it earns income taxable under the Internal Revenue Code.
  
  
• Required Information: Filers must provide tax records, total assets, and the NAIC annual statement to support tax computation, deductions, and credits.
  
  
• Amended and Superseding Returns: If errors are discovered, corporations may file an amended or superseding corporate return before the extended due date to correct previous figures and avoid penalties.
  
  
• Electronic Filing: Large corporations are encouraged to file electronically instead of paper forms. E-filing provides faster refunds, reduced errors, and more efficient processing with the Internal Revenue Service.
  
  
• Tax Penalties: Late filing or underpayment can lead to an estimated tax penalty or a minimum penalty for unpaid tax. Accurate tax computation and timely payments help prevent additional taxes and interest.
  
  
• Recordkeeping: Maintain all tax records and the NAIC annual statement for audit and tax purposes. Proper documentation confirms the accuracy of amounts paid, deductions, and credits.

Browse more tax form instructions and filing guides in our Forms Hub

Step-by-Step (High Level)

Step 1: Gather Business and Financial Records

Collect financial statements, tax records, and the NAIC annual statement required by the Internal Revenue Service. Include investment, interest, and capital gains earned during the tax year.

Step 2: Calculate Taxable Income

Compute total income by combining gross receipts, investment income, and gains. Subtract deductions such as business expenses, dividends received deduction, and other allowable costs under the Internal Revenue Code.

Step 3: Complete the Tax Computation Section

Use the tax computation section of Form 1120-PC to calculate corporate income tax owed. Include adjustments for alternative minimum tax, additional taxes, or prior-year minimum tax as required.

Step 4: File Form 1120-PC and Pay Any Balance Due

E-file or mail the completed return and payment to the address in the IRS instructions. Corporations that owe tax should make payments using electronic funds transfer or other accepted methods.

Step 5: Retain Copies for Tax Purposes

Keep copies of filed returns, schedules, and tax information for at least three years. Retaining these records ensures accuracy for amended returns or future audits.

Learn more about federal tax filing through our IRS Form Help Center

Common Mistakes and How to Avoid Them

• Incorrect Income Reporting: Some casualty insurance companies underreport investment income or omit taxable income. Always review financial statements before filing corporate returns.
  
  
• Failure to Include Dividends Received Deduction: Missing this deduction can increase total tax liability. Verify all deduction accounts before submitting your return.
  
  
• Late Filing or Payment: Late filing often results in minimal penalties and interest. File Form 1120-PC promptly or arrange an installment agreement to manage unpaid tax.
  
  
• Misclassification of Capital Gains: Ensure capital gains and net capital losses are entered in the correct sections to ensure accurate tax computation.
  
  
• Incomplete Amended Returns: When filing amended returns, clearly identify corrections and attach revised tax information or schedules to avoid confusion.

Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties

What Happens After You File

After filing Form 1120-PC, the Internal Revenue Service reviews and processes the return. Refunds or balance-due notices are issued based on total tax liability and payments made. Companies should monitor IRS correspondence to address any additional taxes, penalties, or interest that may arise. Keeping accurate tax records supports compliance for future corporate income tax filings.

FAQs

What types of property and casualty insurance companies must file the IRS Form 1120-PC (2018) P&C Insurance Tax Return?

Property and casualty insurance companies, including domestic and foreign corporations, must file the IRS Form 1120-PC (2018) P&C Insurance Tax Return if they have taxable or investment income during the corporation’s tax year.

How do I complete the corporate tax return and report taxable income?

Corporations must accurately prepare their income tax returns, reporting all taxable income, gains, and deductions. The Internal Revenue Service allows paper and electronic filing, with e-filing recommended for faster confirmation.

Can I amend my IRS Form 1120-PC (2018) P&C Insurance Tax Return if errors affect taxable investment income or tax computation?

Corporations may file amended or superseded corporate returns to correct income, deductions, or taxable investment income errors that affect their tax computation or overall company income tax return accuracy.

How should estimated taxes and estimated tax payments be reported for foreign corporations?

Foreign corporations must accurately report all estimated taxes and tax payments on Form 1120-PC to ensure proper tax treatment under IRS rules and prevent underpayment penalties.

What tax treatment applies to dividends received, property gains, and taxable investment income?

The tax treatment for these items requires corporations to include all capital gains, dividends, and taxable investment income in the tax computation, using Schedule PH and related schedules as directed by IRS instructions.

What identification details and supporting forms must accompany a property and casualty insurance company's income tax return?

To complete the company's tax return correctly, each must include its employer identification number (EIN), NAIC annual statement, and all relevant schedules, including Schedule PH.

Where should corporations send the completed tax return and related payments?

Corporations must mail paper forms to the address listed in the IRS instructions or use the IRS electronic filing system. Before submission, ensure that all payments and tax records are complete.