Form 1120 (2023) Filing Checklist: U.S. Corporation Income Tax Return
Why Form 1120 Is Unique for 2023
The 2023 Form 1120 introduced the new Corporate Alternative Minimum Tax (CAMT) for applicable corporations with adjusted financial statement income exceeding specified thresholds. Energy-efficient commercial building deduction amounts increased substantially and were relocated to Line 25.
Estimated tax penalty relief applied specifically to CAMT liability in 2023. Corporations meeting the $10 million asset threshold must file Schedule M-3 instead of Schedule M-1. These changes significantly impact the tax computation methodology and filing requirements compared to prior years.
Year-Specific Programs Applicable to 2023 Form 1120
For tax years beginning after 2022, corporations must determine whether they qualify as “applicable corporations” subject to the new CAMT and file Form 4626 if required. The IRS waived estimated tax payment penalties for taxes attributable to CAMT liability in 2023; however, Form 2220 must still be filed, and CAMT liability must be excluded from the required annual payment calculation.
Energy-efficient commercial building property placed in service in 2023 qualifies for increased deduction amounts up to $2.68 per square foot (with prevailing wage compliance), claimed on Line 25 with Form 7205 attached.
Ten-Step Filing Checklist for Tax Year 2023
Step 1: Determine Corporate Status and Filing Requirement
Confirm the corporation is domestic (organized under U.S. law) and not exempt under section 501. Verify tax year: calendar year 2023 or fiscal year beginning in 2023. All domestic corporations must file Form 1120 unless exempt or required to file a special return. Record the Employer Identification Number (EIN) and incorporation date for boxes B and C on Form 1120.
Step 2: Assess CAMT Applicability and Form 4626 Requirement
Determine whether the corporation qualifies as an “applicable corporation” under section 59(k)(1). Calculate average annual adjusted financial statement income (AFSI) for the three preceding tax years; corporations exceeding $1 billion AFSI threshold are subject to CAMT. If the corporation meets the CAMT safe harbor (average AFSI less than $500 million and no prior CAMT liability), Form 4626 is not required. If Form 4626 is required, complete Parts I and II and attach to Form 1120.
Step 3: Gather and Organize Income Documentation
Collect Forms 1099-INT, 1099-DIV, 1099-B, 1099-MISC, 1099-NEC, and K-1s from partnerships or S corporations. Obtain bank statements, investment statements, rental income records, and sales records to support gross receipts (Line 1a). Retrieve invoices and expense documentation for the calculation of the cost of goods sold. Compile records for interest income (Line 5), dividend income (Line 4), capital gains or losses (Line 8), and other income sources (Line 10). Organize documentation supporting depreciation deductions and prepare Form 4562 support materials.
Step 4: Calculate and Report Total Income (Lines 1–11)
Enter total gross receipts or sales on Line 1a. Subtract returns and allowances on Line 1b. Attach Form 1125-A and enter the cost of goods sold on Line 2. Calculate gross profit on Line 3 (Line 1c minus Line 2). Enter dividend income and inclusions on Line 4 from Schedule C, line 23. Report interest income on Line 5, gross rents on Line 6, and gross royalties on Line 7. Attach Schedule D and enter capital gain net income on Line 8. Report net gain or loss from Form 4797, Part II on Line 9. Enter other income on Line 10. Add Lines 3 through 10 to Line 11 to determine total income.
Step 5: Calculate Deductions (Lines 12–26) and Energy-Efficient Building Deduction
Complete Form 1125-E and enter officer compensation on Line 12. Report salaries and wages (less employment credits) on Line 13, repairs on Line 14, bad debts on Line 15, rent on Line 16, taxes and licenses on Line 17, and interest expense on Line 18.
Charitable contributions on Line 19 are limited to 25 percent of taxable income; excess carries forward. Attach Form 4562 and enter depreciation on Line 20. Report depletion on Line 21, advertising on Line 22, pension contributions on Line 23, and employee benefit expenses on Line 24.
On Line 25, if the corporation placed energy-efficient commercial building property in service during 2023, attach Form 7205 and enter the deduction (maximum amounts depend on energy savings percentage and prevailing wage compliance). List other deductions on Line 26. Add Lines 12–26 on Line 27.
Step 6: Calculate Taxable Income and Apply Special Deductions (Lines 28–30)
Subtract total deductions (Line 27) from total income (Line 11) on Line 28 to determine taxable income before NOL and special deductions. On Line 29a, enter the net operating loss deduction; for NOLs arising in tax years beginning after 2020, carryback is generally eliminated, but indefinite carryforward applies (with 80 percent of taxable income limitation). Complete Schedule C and enter total special deductions on Line 29b. Add Lines 29a and 29b on Line 29c. Subtract Line 29c from Line 28 on Line 30 to determine taxable income.
Step 7: Complete Schedule C and Determine Special Deductions
Complete Schedule C (Dividends, Inclusions, and Special Deductions) to report dividends from domestic corporations, dividends from foreign corporations, and other inclusions. Apply the applicable percentage in column (b) to calculate special deductions in column (c). Enter total special deductions from Schedule C, line 24 on Form 1120, Line 29b. If the corporation owns shares in a controlled foreign corporation or received subpart F income, include applicable amounts with supporting documentation (Form 5471).
Step 8: Complete Schedule J (Tax Computation) and Calculate Tax Liability
On Schedule J, Part I, calculate income tax using the 21 percent corporate tax rate for 2023. Report any alternative minimum tax from Form 4626, Part II, line 13 on Schedule J, line 3 (if CAMT applies). Include the base erosion minimum tax from Form 8991 if gross receipts exceeded $500 million in any of the three preceding tax years. Add applicable credits (Form 8834, Form 3800).
Calculate the total tax on Schedule J, Part I, line 11, and transfer it to Form 1120, line 31. If CAMT applies and the corporation failed to make timely estimated tax payments, Form 2220 must be filed; however, the corporation may exclude CAMT liability when calculating the required annual payment. Enter the estimated tax penalty on Line 34.
Step 9: Attach Required Schedules and Forms in Prescribed Order
Assemble the return in the following order: Schedule N (if foreign operations), Schedule D (capital gains/losses), Form 4797 (if business property sales), Form 8949 (if required), Form 8996 (if qualified opportunity fund), Form 4626 (if CAMT applicable), Form 1125-A (cost of goods sold), Form 4562 (depreciation), Form 1125-E (officer compensation), Form 7205 (energy-efficient building deduction if claimed), Form 3800 (general business credits), Form 8993 (section 250 deduction if applicable), Schedule M-3 (if total assets at year-end equal or exceed $10 million; otherwise Schedule M-1 if required), Schedule M-2, Schedule L (balance sheet if applicable), Schedule K (other information), Schedule C, Schedule J, and Schedule PH (if personal holding company)—print corporation name and EIN on each attachment.
Step 10: Sign, Date, File by Due Date, and Verify Completeness
The corporation’s president, vice president, treasurer, assistant treasurer, controller, or other authorized officer must sign and date Form 1120. If a paid preparer completes the return, that preparer must sign, include their Preparer Tax Identification Number (PTIN), and complete the Paid Preparer Use Only section. For corporations in the calendar year 2023, the return is due on April 15, 2024 (the 15th day of the fourth month following December 31, 2023).
For corporations with a fiscal year-end date of June 30, the due date is September 15. Suppose the due date falls on a Saturday, Sunday, or legal holiday; file on the next business day. Verify all applicable entry spaces are complete; do not enter “See Attached” or “Available Upon Request.” Ensure all amounts are entered in whole dollars. Mail or deliver the full return to the applicable IRS address based on the corporation’s principal business location and total assets.
Line Changes for Form 1120 in 2023
Line 25: Energy Efficient Commercial Buildings Deduction
Prior year instruction: The deduction was limited to a maximum of $1.80 per square foot (indexed for inflation after 2020) for buildings achieving 50 percent energy savings.
Current year instruction (2023): For property placed in service on or after January 1, 2023, the deduction increased substantially. The base deduction is $0.54 per square foot (for 25–50% energy savings) up to $1.07 per square foot (for 50%+ energy savings). A five-fold bonus applies to buildings meeting prevailing wage and apprenticeship requirements, increasing deduction amounts to $2.68–$5.36 per square foot, depending on the energy savings level. Form 7205 must be attached to claim the deduction. This represents a significant expansion compared to prior years.
Change type: Updated (with substantial expansion)
The 2023 modifications reflect the provisions of the Inflation Reduction Act and represent the most significant increase in the value of this deduction since its introduction, making energy-efficient commercial building investments substantially more attractive from a tax perspective.
Additional Compliance Notes for 2023 Form 1120
Corporations are not permitted to file Form 1120 if they are S corporations, tax-exempt organizations (unless reporting unrelated business income on Form 990-T), or eligible entities that have elected pass-through status. Charitable contributions in excess of 25 percent of taxable income may be carried forward to the next five tax years.
Corporations with $10 million or more in total assets at year-end must file Schedule M-3; those with less than $10 million may file Schedule M-1. Small corporate taxpayers with total receipts below $250,000 are not required to complete Schedules L, M-1, and M-2; however, they must verify their eligibility. All Form 1120 returns must reflect the corporation’s actual accounting method consistently with prior years unless a section 481(a) adjustment is made.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
