Amending Corporate Tax Returns with Form 1120X

Filing corporate tax returns can be a complex and time-consuming process for businesses. Mistakes can happen, leading to missed opportunities for tax incentives and credits. Fortunately, the IRS provides a solution in the form of 1120X, which allows businesses to amend their previously-filed corporate tax returns. This article explores what Form 1120X is for, how businesses can file, and how this form can help businesses leverage tax incentives they may have missed.

Form 1120X is used to amend a previously-filed Form 1120, the U.S. Corporation Income Tax Return. There are several reasons why businesses may need to amend their tax returns, including correcting errors, reporting additional income or deductions, or making changes to previously-claimed credits. In essence, it provides a way for businesses to rectify mistakes or omissions on their original tax return.

Filing Form 1120X requires careful attention to detail. Here are the key steps involved:

• Gather all the relevant documents, including your original Form 1120 and any supporting schedules. You’ll need these to make the necessary corrections.
• The form consists of three columns – A, B, and C. Column A is used for the original figures, Column B is for the corrected figures, and Column C is for the net change. You’ll need to explain the reason for any amendment in Part II of the form.
• Depending on the nature of the amendment, you may need to include additional schedules or documentation to support the changes you are making.
• Send the completed Form 1120X and any supporting documents to the IRS. The address for filing is found in the form’s instructions.

Form 1120X can be a valuable tool for businesses that have missed out on tax incentives and credits in their original tax return. Here’s how it can help with specific incentives:

• Employee Retention Credit (ERC): Businesses that initially missed claiming the ERC can use Form 1120X to amend their returns and take advantage of this credit, which is designed to incentivize keeping employees on payroll during the pandemic.
• Research and Development (R&D) Tax Credit: If a business didn’t claim the R&D tax credit in their initial return, they could use Form 1120X to amend and include this credit, which rewards companies for investing in research and development activities.
• Section 179D Deduction: This deduction that allows building owners to claim up to a $5.00 per square feet for energy-efficient buildings or installing systems to that effect. Businesses can amend their tax returns using Form 1120X to claim this deduction if they initially overlooked it.
• Other Missed Credits and Incentives: Beyond these examples, Form 1120X can be used to amend returns for various other tax credits and incentives that businesses may not have utilized initially, such as investment or energy-related credits.

Filing Form 1120X offers businesses a second chance to correct errors, claim missed deductions, and take advantage of tax incentives they might have overlooked. Whether it’s amending your tax return to claim the Employee Retention Credit, Research and Development Credit, Section 179D Deduction, or other incentives, Form 1120X can be a valuable tool in optimizing your business’s tax position. However, it’s essential to consult with a reputable tax provider to ensure the process is executed correctly and in compliance with IRS regulations, as tax laws and requirements can change over time.

At alliantgroup, our tax experts have an extensive understanding and experience in navigating numerous federal and state tax credits and incentives. Their knowledge and insights have helped us serve 41,000 clients and partner with 4,600 CPA firms.

Contact us to take advantage of tax credits and incentives available to your business.