What IRS Form 1120-PC (2025) Is For

IRS Form 1120-PC (2025) is the federal income tax return used by property and casualty insurance companies to report their income, losses, deductions, and credits to the Internal Revenue Service. The form ensures that each corporation accurately calculates its taxable income and pays the correct corporate income tax for the year.

This form applies to nonlife insurance companies that write commercial or personal lines of coverage, including automobile, homeowners, and liability insurance. It also applies to section 833 organizations and qualifying foreign corporations engaged in U.S. insurance business. By filing Form 1120-PC, these companies comply with federal income tax laws under the Internal Revenue Code and disclose information about premiums written, taxable investment income, and capital gains.

Every insurance company—domestic or foreign—that conducts property and casualty operations within the United States must file this return annually, even if there is no taxable income.

When You’d Use Form 1120-PC (2025)

You should file IRS Form 1120-PC (2025) when your property and casualty insurance company needs to report income, deductions, and tax liability for the current tax year. This form also applies to amended or late filings for domestic or foreign corporations operating in the United States. Use it in the following situations:

• Annual reporting: File to report your company’s taxable income, deductions, and insurance-related operations for the current tax year.
  
  
• Late filing: If necessary, submit after the April 2026 deadline, but note that penalties increase quickly—$510 or the unpaid tax amount for returns over 60 days late, plus 5% per month up to 25%.
  
  
• Amended returns: File an amended Form 1120-PC if you identify incorrect deductions, unreported investment income, or other errors affecting taxable income.
  
  
• Refund claims: To claim a refund of overpaid taxes, file within three years of the original due date or two years after the tax payment.
  
  
• Penalty prevention: Filing early and accurately helps minimize estimated tax penalties and reduce the risk of IRS correspondence.

Key Rules or Details for the 2025 Tax Year

• Standard Filing Deadlines: Property and casualty insurance companies must file Form 1120-PC by the 15th day of the fourth month after the close of their corporation’s tax year. For companies with a June 30 year-end, the deadline falls on the 15th day of the third month.
  
  
• Minimum Late-Filing Penalty: The IRS assesses a $510 penalty or the tax due—whichever is smaller—if a return is filed more than 60 days late.
  
  
• Corporate Alternative Minimum Tax (CAMT): For 2024 returns filed in 2025, the IRS waives penalties for estimated-tax underpayments related to CAMT computations.
  
  
• Dividends-Received Deduction Update: The 2025 instructions revise worksheets to reflect section 250 adjustments affecting dividend income.
  
  
• Electronic-Filing Requirement: Corporations with total assets exceeding $10 million must file electronically to comply with Internal Revenue Service rules.

Step-by-Step (High Level)

Now that you understand the rules for 2025, follow these steps to complete and file IRS Form 1120-PC accurately.

1. Gather Required Documents: Collect your NAIC annual statement, financial statements, balance sheets, and IRS transcripts. These records ensure accuracy and consistency when calculating taxable income and completing your insurance company income tax return.
   
   
2. Prepare the Correct Form Version: Use the 2025 Form 1120-PC and clearly mark “Amended” at the top if correcting a prior submission. Ensure your corporation’s name, address, and Employer Identification Number match IRS and state insurance filings.
   
   
3. Report All Income and Deductions: Enter premiums written, taxable investment income, wages paid, and capital gains. Include deductions for allowable business expenses and apply the dividends-received deduction where applicable.
   
   
4. Attach Required Schedules: Include Schedule C for dividend and interest income, Schedule M-3 if total assets exceed $10 million, and your NAIC annual statement for paper filings.
   
   
5. File and Retain Records: File electronically through the Internal Revenue Service or mail to the Ogden, Utah address. Keep all records, financial statements, and correspondence for at least three years after filing.

Common Mistakes and How to Avoid Them

• Incorrect Reserve Discounting: Verify reserve discount calculations against the latest IRS section 846 tables and actuarial assumptions. Keep documentation updated and reviewed periodically to ensure compliance and accuracy.
• Filing the Wrong Schedule: Confirm your total asset threshold before filing. If assets exceed $10 million, use Schedule M-3 instead of M-1. 
• Mailing to the Wrong Address: Always check your entity's most recent IRS mailing address before sending paper returns. Consider electronic filing when possible to avoid delays.
• Omitting Required Attachments: Use a pre-filing checklist to ensure all required attachments—such as the NAIC annual statement and balance sheets—are included before submission.
• Ignoring Estimated Tax Rules: Even with CAMT penalties waived for 2024, maintain timely estimated tax payments to avoid other penalties. Set calendar reminders for quarterly reviews and payments. 

What Happens After You File

After submitting IRS Form 1120-PC (2025), the Internal Revenue Service generally takes several months to process your return. Electronic submissions are usually reviewed faster, while paper filings take eight weeks or longer. During this period, the IRS may send notices requesting clarification, additional documentation, or adjustments to reported figures. Responding promptly helps prevent interest charges or enforcement actions.

If you owe additional tax, payments can be made through the Electronic Federal Tax Payment System (EFTPS) or with Form 9465 to request an installment agreement. Refunds from electronically filed returns typically arrive within 30 days, while mailed returns may take twice as long. Keep all correspondence and payment confirmations with your financial statements for at least three years, since the IRS may review prior filings during audits or amendment requests.

FAQs

What counts as taxable income on IRS Form 1120-PC (2025)?

Taxable income includes all gross receipts from premiums written, investment returns, and other business activities. Corporations filing must calculate net income based on total earnings, allowable deductions, and losses reported under the Internal Revenue Code for their fiscal tax year.

How should taxable investment income be reported?

Property and casualty insurance companies must include taxable investment income, such as dividends, interest, and capital gains. Tax computation should reflect accurate income categories and deductions to ensure full compliance with Internal Revenue Service requirements for corporations filing under Form 1120-PC.

Who needs to file a corporation income tax return using Form 1120-PC?

All property and casualty insurers must file a corporate income tax return, including domestic and foreign corporations. This requirement ensures that each filer reports income, deductions, and estimated tax payments correctly during its fiscal tax year, maintaining alignment with Internal Revenue Service regulations.

How is income tax liability determined for insurance companies?

Income tax liability depends on taxable income, deductions, and credits allowed under the Internal Revenue Code. Corporations filing must complete accurate tax computation worksheets, ensuring their estimated tax payments match actual earnings to avoid penalties and interest from late or incorrect submissions.

Do life insurance companies use IRS Form 1120-PC?

No, life insurance companies file Form 1120-L instead. Property and casualty insurers use Form 1120-PC to report their financial activity, including taxable income, deductions, and tax computation. Each corporation’s fiscal tax year determines when its federal return is due.