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Department of the Treasury
Internal Revenue Service
Instructions for Form 1120-S
U.S. Income Tax Return for an S Corporation
Section references are to the Internal Revenue Code unless Contents Page
otherwise noted. Schedule M-1. Reconciliation of Income
Contents Page (Loss) per Books With Income (Loss) per
Future Developments . . . . . . . . . . . . . . . . . . . . . . . . 1 Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
What’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Schedule M-2. Analysis of AAA, PTEP, 46
Accumulated E&P, and OAA .
Photographs of Missing Children . . . . . . . . . . . . . . . . 1 Principal Business Activity Codes . . . . . . . . . . . . 50
The Taxpayer Advocate Service . . . . . . . . . . . . . . . . 2 . . . . . . . . . . . . . . 53
Direct Deposit of Refund . . . . . . . . . . . . . . . . . . . . . . 2 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How To Get Forms and Publications . . . . . . . . . . . . . 2 Future Developments
General Instructions . . . . . . . . . . . . . . . . . . . . . . . . . 2 For the latest information about developments related to Form
Purpose of Form . . . . . . . . . . . . . . . . . . . . . . . . . 2 1120-S and its instructions, such as legislation enacted after
How To Make the Election . . . . . . . . . . . . . . . . . . 2 they were published, go to IRS.gov/Form1120S.
Who Must File . . . . . . . . . . . . . . . . . . . . . . . . . . 2 What’s New
Termination of Election . . . . . . . . . . . . . . . . . . . . 2 COVID-19 related credit for qualified sick and family leave.
Electronic Filing . . . . . . . . . . . . . . . . . . . . . . . . . 3 Generally, the credit for qualified sick and family leave wages as
When To File . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 enacted under the Families First Coronavirus Response Act (the
Where To File . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FFCRA), as amended and extended by the COVID-related Tax
Who Must Sign . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Relief Act of 2020 for leave taken after March 31, 2020, and
before April 1, 2021, and the credit for qualified sick and family
Paid Preparer Authorization . . . . . . . . . . . . . . . . . 4 leave wages as enacted under the American Rescue Plan Act of
Assembling the Return . . . . . . . . . . . . . . . . . . . . 4 2021 (the ARP), have expired. However, employers that pay
Tax Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 4 qualified sick and family leave wages in 2022 for leave taken
after March 31, 2020, and before October 1, 2021, are eligible to
Electronic Deposit Requirement . . . . . . . . . . . . . . 4 claim a credit for qualified sick and family leave wages in 2022.
Estimated Tax Payments . . . . . . . . . . . . . . . . . . . 4 See the March 2022 revision of the Instructions for Form 941
Interest and Penalties . . . . . . . . . . . . . . . . . . . . . 5 and the 2022 Instructions for Form 944 for more information. The
Accounting Methods . . . . . . . . . . . . . . . . . . . . . . 5 no double benefit rules continue to apply.
Accounting Period . . . . . . . . . . . . . . . . . . . . . . . 6 Increase in penalty for failure to file. For returns due in 2023,
Rounding Off to Whole Dollars . . . . . . . . . . . . . . . 6 the minimum penalty for failure to file a return that is more than
60 days late has increased to the smaller of the tax due or $450.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . 6 See Late filing of return, later.
Amended Return . . . . . . . . . . . . . . . . . . . . . . . . 6 Principal business activity codes. We revised the list of
Other Forms and Statements That May Be principal business activity codes. See Principal Business Activity
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Codes.
At-Risk Limitations . . . . . . . . . . . . . . . . . . . . . . . 8 Research and experimental expenses. Research and
Passive Activity Limitations . . . . . . . . . . . . . . . . . 8 experimental expenses paid or incurred in tax years beginning
Net Investment Income Tax Reporting after 2021, are required to be amortized over 5 years. See
Requirements . . . . . . . . . . . . . . . . . . . . . . . . 12 section 174.
Specific Instructions . . . . . . . . . . . . . . . . . . . . . . . . 13 Schedules K-2 and K-3. There is a new exception for filing and
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 furnishing Schedules K-2 and K-3 for tax years beginning in
2022. See International Transactions, later.
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Tax and Payments . . . . . . . . . . . . . . . . . . . . . . 21 Reminder
Schedule B. Other Information . . . . . . . . . . . . . . 22 Election by a small business corporation. Don't file Form
Schedules K and K-1 (General Instructions) . . . . 23 1120-S unless the corporation has filed or is attaching Form
Specific Instructions (Schedule K-1 Only) . . . . . . 24 2553, Election by a Small Business Corporation. For details, see
Part I. Information About the Corporation . . . . . . 25 the Instructions for Form 2553.
Part II. Information About the Shareholder . . . . . . 25 Photographs of
Specific Instructions (Schedules K and K-1, Missing Children
Part III) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 The Internal Revenue Service is a proud partner with the
Schedule L. Balance Sheets per Books . . . . . . . 45 National Center for Missing & Exploited Children® (NCMEC).
Photographs of missing children selected by the Center may

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