What IRS Form 1120X (2020) Is For
IRS Form 1120X (2020) allows corporations to correct errors on a previously filed corporation income tax return. When a corporation filed Form 1120 for the 2020 tax period, it might have discovered changes in income, deductions, or credits that affect taxable income or total income. Filing an amended return ensures compliance with IRS rules and accurately reflects the corrected amount.
Corporations use this amended form to report additional income, claim missed deductions or credits, or fix incorrect entries that changed their tax liability. According to IRS instructions, a properly completed form and a clear explanation in Part II help correct errors, claim refunds, and comply with applicable tax laws.
When You’d Use Form 1120X for 2020 (Late or Amended Filing)
Corporations file Form 1120X for 2020 when they need to fix mistakes from an originally filed income tax return. Common reasons include IRS notices showing discrepancies, missed deductions, or unreported income. A corporation may also need to amend if it discovers an overpayment or chooses to make certain elections that were not included previously.
The prescribed deadline is generally three years from the date the original return was filed or two years from when the tax was paid, whichever is later. Corporations should carefully review their tax situation and attach supporting documents to ensure that all adjustments are accurate and complete before mailing the amended form.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide to Business Income Tax Forms.
Key Rules Specific to 2020
- Automatic Penalty Relief: The IRS granted penalty relief for some 2020 corporate returns with balances under $100,000, helping businesses manage compliance during the pandemic.
- Pandemic-Related Credits: The employee retention credit and paid sick leave credit applied to 2020. Many corporations filed amended returns to claim these benefits.
- Temporary Adjustments: Certain elections and deductions were changed under emergency legislation. Businesses should review these adjustments before filing an amended return.
- Documentation Requirements: Each change must reference a specific line number and include a clear explanation in Part II, along with proper schedules and supporting documents.
- Use of 2020 Rules: All amended corporate returns for 2020 must follow the laws and credit provisions in effect for that tax year.
Learn more about federal tax filing through our IRS Form Help Center.
Step-by-Step (High Level)
- Gather Records: Obtain your original 2020 Form 1120, related schedules, and IRS transcripts. Review total income, deductions, and credits before making corrections.
- Complete Form 1120X: Use the three-column layout to show original amounts, changes, and corrected totals. Explain each item in Part II.
- Attach Documents: Include supporting schedules and documents that justify each change and reflect accurate calculations.
- File the Return: Mail the completed form to the same IRS service center where you originally filed your income tax return. E-filing is not available.
- Keep Copies: Save all records for at least three years to comply with IRS documentation requirements.
Following these steps ensures your corporation files a complete amended form and avoids unnecessary processing delays.
Common Mistakes and How to Avoid Them
- Filing Before the Original Return Is Processed: Wait until the IRS finishes processing your original Form 1120 to avoid duplicate filings.
- Missing the Three-Year Statute of Limitations: File within three years of the original date or two years of payment to remain eligible for refunds.
- Vague Explanations in Part II: Provide detailed explanations for each correction, citing the line number, corrected amount, and reason.
- Using Wrong-Year Tax Rules: Apply only the tax rules, deductions, and credits valid for the 2020 tax period.
- Forgetting Supporting Documents: Attach all schedules and statements that justify the changes and calculations.
- Overlooking Related Adjustments: Ensure corrections in income, credits, or deductions align with related items, such as dividends or charitable deductions.
- Failing to Sign or Date the Form: Always sign and date the completed form before mailing it.
- Not Checking Calculations: Review all line entries to verify the total income, deductions, and corrected amounts for the 2020 corporation income tax return.
What Happens After You File
After a corporation submits Form 1120X, the IRS usually takes about three to four months to process the amended return. Complex corporate returns may take longer. The IRS sends notices confirming receipt or requesting more information if needed.
If you owe additional taxes, pay promptly to reduce interest and penalties. You may request an installment plan using Form 9465. Interest accrues from the original due date, and penalties may be applied if taxes are not paid on time.
If the amended filing shows an overpayment, the IRS issues a refund once the changes are verified. Keeping organized records ensures control over your business filings and helps with compliance if the IRS requests additional information.
FAQs
Can I e-file IRS Form 1120X (2020)?
No, IRS Form 1120X (2020) cannot be e-filed. Corporations must print, sign, and mail the completed form to the IRS service center where their original income tax return was filed. Paper filing is required for amended returns for the 2020 tax period.
How do I amend a corporation income tax return?
To amend a corporation income tax return, complete Form 1120X with accurate corrections and supporting documents. List each change by line number, show the corrected amount, and explain it in Part II. Submit by mail and keep copies for your business records.
When should a corporation file an amended return?
A corporation should file an amended return when it discovers errors, missed deductions, or unreported income after the original filing. The general deadline is three years from the filing date or two years from the date of payment. Late filings beyond these limits may result in the loss of refund eligibility.
How do I complete Form 1120X to amend my income tax return?
To amend your income tax return using Form 1120X, complete all sections and provide explanations for each adjustment. Attach the required schedules showing how each correction was calculated. The IRS needs complete documentation to process the amendment efficiently.
Why do amended returns require additional information?
Amended returns require additional information so the IRS can verify all corrections. Corporations should include all supporting documents, statements, and examples that confirm their changes. Missing attachments can delay processing and may require additional requests.
What happens if corporate returns show an overpayment?
If corporate returns show an overpayment after amending, the IRS will issue a refund after verifying the information. Ensure all corrected income, deductions, and credits are complete to avoid future adjustments.
How do I correct errors on Form 1120?
To correct errors on Form 1120, file an amended Form 1120X. Enter the original and corrected amounts, include explanations in Part II, and attach schedules or supporting documents that justify the corrections.
