IRS Form 1120-S (2020): S Corporation Tax Return
What IRS Form 1120-S (2020) Is For
Form 1120-S is the U.S. Income Tax Return for an S Corporation, used to report income, gains, losses, deductions, credits, and other tax information of a domestic corporation that has elected S corporation status (IRS Instructions for Form 1120-S (2020)). As pass-through entities, S corporations shift income and losses to shareholders through Schedule K-1.
When You’d Use Form 1120-S for 2020 (Late or Amended Filing)
You may need to file Form 1120-S (2020) late or amended if you missed the March 15, 2021 deadline, received IRS notices such as CP-199, or found errors in a previously filed return. Refund opportunities remain possible if within three years of the due date, though limitations apply if the original return was never filed.
Key Rules Specific to 2020
- COVID-related credits: Employee Retention Credit and credits for paid sick or family leave wages under the Families First Coronavirus Response Act.
- New K-1 items: Item G (shareholder stock numbers) and Item H (loans from shareholders) were added in 2020.
- Penalty thresholds: Late filing penalties apply per shareholder, per month, up to 12 months.
Step-by-Step (High Level)
- Gather records: Obtain IRS transcripts and all financial data.
- Complete the 2020 Form: Use only the 2020 version and required schedules.
- Prepare K-1s: Issue to each shareholder with accurate allocations.
- Attach schedules: Include capital gains, rental real estate, and others.
- Choose filing method: Mail or e-file if supported for 2020 returns.
- Keep copies: Retain filed forms, schedules, and proof of submission.
Common Mistakes and How to Avoid Them
- Misallocating shareholder percentages when ownership changes mid-year.
- Failing to pay shareholder-officers reasonable compensation as wages.
- Incorrect AAA tracking leading to misclassified distributions.
- Delivering K-1s late, which triggers significant penalties.
- Submitting incomplete returns without required schedules.
- Ignoring shareholder basis requirements, which affect loss deductions.
What Happens After You File
Processing for late returns may take 16 weeks or more. Amended returns often take longer. Expect acknowledgment notices and possible penalties: $210 per shareholder per month if no tax is due, or that plus 5% of unpaid tax monthly when a balance exists. Payment options include Form 9465 installment agreements, though interest continues accruing until full payment.
FAQs
Can I still get a refund for my 2020 S corp return filed late?
Yes, if you file within three years of the due date (March 15, 2024) or two years from when taxes were paid, whichever is later. However, refunds are unavailable if no original return was filed. Filing promptly still helps reduce penalties and brings your business back into IRS compliance.
What’s the penalty for filing my 2020 S corp return late in 2024?
The penalty is $210 per shareholder per month, up to 12 months maximum. If taxes are owed, an additional 5% of unpaid tax applies monthly, capped at 25%. For returns filed over 60 days late, the minimum penalty is $435 or the tax due, whichever is smaller, per IRS guidance.
How do I get my S corp account transcripts?
You can access transcripts through IRS.gov’s “Get Transcript” service, call 1-800-908-9946, or mail Form 4506-T. Corporate account transcripts show filed returns, penalties, and payment history. These documents help confirm IRS records and ensure your 2020 filing aligns with their database before submitting a late or amended return.
My shareholders lost their K-1s—what should I do?
File amended K-1s clearly marked “Amended K-1” at the top and distribute copies to affected shareholders. You may also provide reissued copies of the original K-1s filed with your Form 1120-S. These corrected or replacement forms allow shareholders to properly update their individual tax returns and maintain accurate records.
Do I need to amend my state S corp return too?
Yes, in most cases. State returns typically conform to federal changes, so when you amend Form 1120-S federally, you may also need to amend the state return. Contact your state’s tax agency directly to confirm specific rules, deadlines, and forms required to remain compliant with local regulations.
Can penalties be removed?
Yes, the IRS may grant penalty relief if you can demonstrate reasonable cause for late filing or errors. Common justifications include serious illness, natural disasters, or reliance on erroneous professional advice. Submit a written explanation with supporting documents. Interest generally cannot be waived, but penalty abatement can significantly reduce costs.
What if I discover errors after filing my late/amended return?
File another amended 2020 Form 1120-S, check box H(4), and attach a statement explaining each change in detail. Provide corrected K-1s to all affected shareholders so they can amend their personal returns if necessary. Prompt action helps minimize penalties and ensures consistency across both corporate and shareholder tax filings.
