What IRS Form 1120-RIC (2025) Is For

Form 1120-RIC is the U.S. Income Tax Return for Regulated Investment Companies, used by domestic corporations that elect to be taxed as RICs under section 851 of the Internal Revenue Code. Companies must meet specific income tests (90% from qualifying sources), asset tests (50% diversification requirements), and distribution requirements (90% of investment income distributed to shareholders) to qualify as RICs and avoid C corporation taxation (IRS Instructions for Form 1120-RIC (2024)).

When You'd Use Form 1120-RIC for 2025 (Late or Amended Filing)

You would need to file Form 1120-RIC for 2025 in several late or amended scenarios: if you received IRS notices about an unfiled return after the original due date (typically April 15th for calendar year RICs), if you owe taxes and need to file to establish payment arrangements, or if you discovered errors in your original return requiring amendments. For refund claims on amended returns, you must file within 3 years of the original filing date or 2 years of tax payment, whichever is later. Late filing triggers penalties and interest, but establishing compliance helps avoid collection actions like levies or liens (IRS Instructions for Form 1120-RIC (2024)).

Key Rules Specific to 2025

For tax returns required to be filed in 2025, the minimum penalty for failure to file a return over 60 days late has increased to the smaller of the tax due or $510. The interest rate for underpayments is 7% per year, compounded daily, for the fourth quarter of 2025. RICs must also be aware of the 4% excise tax on undistributed income (reported on Form 8613) if distribution requirements aren't met by December 31st of the tax year, with the excise tax due by March 15th of the following year (IRS Instructions for Form 1120-RIC (2024)).

Step-by-Step (High Level)

• Gather Documentation: Obtain tax account transcripts from IRS.gov or by calling 800-908-9946 to verify previously filed information and outstanding balances
  
  
• Complete the Correct-Year Form: Use the 2025 version of Form 1120-RIC, including all required schedules (Schedule A for dividends paid deduction, Schedule J for tax computation, Schedule K for other information)
  
  
• Attach Required Schedules: Include Form 8613 if liable for excise tax on undistributed income, Schedule D for capital gains/losses, and any other applicable forms
  
  
• Filing Method: Mail to the address specified in instructions (Ogden, UT for most RICs) or consider electronic filing if available through tax software
  
  
• Keep Copies: Maintain copies of all filed documents and supporting records for at least 3 years from the filing date
  
  

Common Mistakes and How to Avoid Them

• Missing Distribution Requirements: Ensure 90% of investment company taxable income is distributed to avoid C corporation taxation; verify calculations on Schedule A carefully
  
  
• Incorrect Asset Test Calculations: Double-check quarterly asset diversification requirements (50% diversified investments, no more than 25% in single issuer securities) to maintain RIC status
  
  
• Omitting Form 8613: File Form 8613 if you failed to distribute required amounts by December 31st to pay the 4% excise tax and avoid additional penalties
  
  
• Wrong Tax Year Form: Always use the form version that matches your tax year - using 2024 forms for 2025 tax year returns causes processing delays
  
  
• Incomplete Schedule K: Answer all questions in Schedule K, particularly regarding business interest expense elections and gross receipts tests, as incomplete information triggers IRS correspondence
  
  
• Missing Shareholder Notifications: Ensure proper notification to shareholders about foreign tax credits (Form 1099-DIV) and undistributed capital gains (Form 2439) to avoid penalties
  
  

What Happens After You File

The IRS typically processes Form 1120-RIC within 6-8 weeks of receipt, though amended returns may take 16 weeks or longer during peak seasons. You'll receive acknowledgment of receipt and any notices regarding additional information needed or balance due. If you owe taxes, you can request a payment plan using Form 9465 (installment agreement) or apply online for amounts under $50,000. Interest continues to accrue at 7% annually until paid in full, and the late payment penalty is 0.5% per month (reduced to 0.25% with an approved payment plan). You have appeal rights if you disagree with any IRS determinations, starting with a request for reconsideration to the examining agent (IRS Instructions for Form 1120-RIC (2024)).

FAQs

What's the penalty for filing Form 1120-RIC late in 2025?

The penalty is 5% of unpaid tax per month, up to 25% maximum. If over 60 days late, there's a minimum penalty of $510 or the tax due, whichever is less (IRS Instructions for Form 1120-RIC (2024)).

Can I get transcripts for prior years to help complete my late return?

Yes, request tax account transcripts through IRS.gov, by calling 800-908-9946, or by mailing Form 4506-T. These show previously filed information and current account status (IRS.gov).

How long do I have to claim a refund on an amended Form 1120-RIC?

You must file within 3 years of the original return filing date or 2 years from when you paid the tax, whichever is later (IRS Publication 542).

Do I need to file Form 8613 for excise tax if I'm filing late?

Yes, if your RIC failed to distribute the required amounts by December 31st of the tax year, you must file Form 8613 and pay the 4% excise tax by March 15th of the following year (IRS Instructions for Form 8613).

What if I can't pay the full amount owed with my late return?

You can request an installment agreement using Form 9465 or apply online at IRS.gov. Interest and penalties continue but collection actions are generally suspended during the payment plan (IRS Instructions for Form 9465).

Should I also amend my state RIC returns?

Most states require amended state returns when you file an amended federal return. Check with your state tax authority for specific requirements and deadlines (IRS Instructions for Form 1120-RIC (2024)).

What if my RIC lost its qualification status in prior years?

You may need to file Form 1120 (regular corporation return) for disqualified years instead of Form 1120-RIC. Consult the qualification requirements in section 851 and consider professional tax advice for complex situations (IRS Instructions for Form 1120-RIC (2024)).

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