What IRS Form 1120X (2018) Is For
IRS Form 1120X (2018), Amended U.S. Corporation Income Tax Return, is used by domestic corporations and resident corporations to correct mistakes or make adjustments to a previously filed Form 1120 for the 2018 tax year. The Internal Revenue Service (IRS) permits corporations to use this form to correct taxable income, deductions, tax credits, or other tax items as specified in the Internal Revenue Code.
Corporations may also file Form 1120X to comply with tax reform legislation enacted under the Tax Cuts and Jobs Act (TCJA), which changed corporate income tax and individual income tax rules beginning in 2018. Adjustments can include revised calculations of net income, financial statement income, and federal taxable income, particularly when corporate alternative minimum tax (AMT) or foreign income taxes were affected.
When You’d Use Form 1120X for 2018 (Late or Amended Filing)
Corporations file IRS Form 1120X (2018) to fix errors such as unreported income, incorrect deductions, or missed tax credits. The Internal Revenue Service accepts these amended returns when changes impact corporate income, foreign subsidiaries, pass-through entities, or business property under the previous law.
Refund claims must be filed within the statute of limitations—generally within three years from the due date of the original return or two years from the date the federal income tax was paid. These amendments may apply to ordinary income, adjusted taxable income, and certain payments made during the original filing period.
Key Rules Specific to 2018
The 2018 tax year marked significant changes under the U.S. tax reform legislation known as the Tax Cuts and Jobs Act. Here’s what corporations needed to know:
- Flat Rate for Corporations: The new corporate tax rate was reduced to a flat rate of 21%, simplifying calculations of corporate income tax and federal taxable income.
- Corporate AMT Repealed: The corporate alternative minimum tax was repealed, and AMT credits became refundable through Form 8827.
- New International Provisions: New rules applied to base erosion (anti-abuse tax), effectively connected income, and foreign-derived intangible income (FDII). These provisions targeted foreign corporations and transactions with foreign countries.
- Eligibility Expansion: The cash method of accounting expanded to corporations with average annual gross receipts of $25 million or less, simplifying recordkeeping for small domestic corporations and S corporations.
- Net Operating Loss Changes: Net operating losses could be carried forward indefinitely, but were limited to 80% of taxable income under the new Jobs Act framework.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide to Business Income Tax Forms.
Step-by-Step (High Level)
- Gather Documentation: Collect original Form 1120, financial statement income, and supporting documents from the preceding tax year, including payroll taxes and employee compensation details.
- Complete Form 1120X: Show original figures, corrected amounts, and provide detailed explanations for each adjustment, noting changes in total deductions, deductions for certain income, and capital gains or losses.
- Attach Schedules: Include revised or additional forms such as Form 8827, Form 4562 (alternative depreciation system), and statements supporting deductible expenses and foreign income taxes.
- File: Mail to the IRS center for your state, or e-file when available. Ensure that the tax year, fiscal year, and consolidated group information are consistent.
- Maintain Records: Keep all copies, schedules, and receipts related to tax years beginning in 2018 for a minimum of three years for audit and compliance purposes.
Common Mistakes and How to Avoid Them
- Filing Too Early: Wait until the IRS has fully processed the original corporate tax return before filing Form 1120X to prevent rejection or delays.
- Missing Signatures: Always ensure that a corporate officer signs and dates the amended return before mailing or e-filing to avoid invalidation.
- Vague Explanations: Provide specific details about income, deductions, or credits being changed instead of generic terms like “error” to help the IRS understand the amendment quickly.
- Confusing Amended vs. Superseding Returns: Confirm the original Form 1120 was processed before submitting Form 1120X, since superseding returns are filed only before the due date.
- Ignoring State Rules: Review your state’s amended return requirements to file any necessary corresponding forms and avoid mismatched tax records.
- Not Paying Balances Promptly: Pay additional tax or interest due as soon as possible to limit penalties and avoid accrual under Internal Revenue Code Section 6601.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
The Internal Revenue Service typically processes amended corporate tax returns in 8–12 weeks, though cases involving foreign subsidiaries or pass-through entities may take longer. The IRS will issue notices showing adjustments, refunds, or balances due.
If you owe additional tax, interest, and penalties under the Internal Revenue Code, Sections 6601 and 6651 will apply. For payment flexibility, corporations may file Form 9465 (Installment Agreement Request) or submit an offer in compromise for unpaid tax liabilities.
FAQs
Can I still file an amended IRS Form 1120X for 2018 to correct a corporate income tax or individual income tax return?
Yes, corporations may still file if within the statute of limitations. Refund claims generally had to be submitted by April 2022 for 2018 filings. While refund opportunities may have expired, corporations can still amend returns to correct corporate income tax or individual income tax liabilities for compliance.
How does the corporate alternative minimum tax repeal under the Cuts and Jobs Act affect my filing?
The corporate alternative minimum tax was repealed by the Tax Cuts and Jobs Act, allowing remaining AMT credits to be refunded. This change simplified corporate tax calculations and eliminated dual reporting systems for taxable income and AMT, impacting corporations based both domestically and abroad.
Do the Jobs Act and anti-abuse tax affect foreign income and base erosion rules?
Yes, the anti-abuse tax, also known as the Base Erosion Anti-Abuse Tax (BEAT), targeted foreign corporations and foreign parent structures that reduced U.S. taxable income through deductible payments. The Jobs Act introduced these rules to limit tax avoidance and ensure that effectively connected income remains subject to federal revenue requirements.
How should corporations report corporate income and employee compensation under the amended return?
Corporations should accurately report all corporate income, employee compensation, and business activities under the correct tax year. Adjustments to payroll taxes, paid family or medical leave credits, and gross receipts should reflect current law under the Internal Revenue Code.
Do capital gains or capital losses affect an amended Form 1120X filing?
Yes, capital gains, capital losses, and dividends received deductions must be accurately adjusted when amending the return. Corporations should ensure that all effectively connected income, real property sales, and business investment changes are correctly reflected to avoid discrepancies in corporate income tax reporting.
For more resources on filing or understanding prior-year IRS forms, visit our Form Summaries and Guides Library.
