Instructions for IRS Form 1120-PC U.S. Property and Casualty Insurance Company Income Tax Return 2018

January 1, 2018 "Instructions For Irs Form 1120-pc - U.s. Property And Casualty Insurance Company Income Tax Return" contain the updated filing procedures for the IRS-issued Form 1120-PC. Download your copy of the instructions by clicking the link below.

IRS Form 1120-PC is a tax form issued by the United States Internal Revenue Service.

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2018
Department of the Treasury
Internal Revenue Service
Instructions for
Form 1120-PC
U.S. Property and Casualty Insurance Company Income Tax Return
Future Developments
that end with or within the shareholder's
Section references are to the Internal Revenue
Code unless otherwise noted.
tax year. See section 951A, as added by
For the latest information about
P.L. 115-97, and Form 8992.
Contents
Page
developments related to Form 1120-PC
and its instructions, such as legislation
Deduction for foreign-derived intangi-
What's New . . . . . . . . . . . . . . . . . .
1
enacted after they were published, go to
ble income and global intangible
Reminders . . . . . . . . . . . . . . . . . . .
2
IRS.gov/Form1120PC.
low-taxed income. A domestic
Photographs of Missing Children . . . .
2
corporation may be allowed a deduction
The Taxpayer Advocate Service . . . . .
2
Additional guidance may be issued
related to the sum of its foreign-derived
How To Get Forms and
subsequent to the publication of these
intangible income (FDII) and global
Publications . . . . . . . . . . . . . . .
2
instructions. Please review any additional
intangible low-taxed income (GILTI) for tax
General Instructions . . . . . . . . . . . . .
2
information in the website prior to the
years beginning after 2017. See section
Purpose of Form . . . . . . . . . . . .
2
completion of the form.
250, as added by P.L. 115-97, and Form
Who Must File . . . . . . . . . . . . .
2
8993.
What's New
Where To File . . . . . . . . . . . . . .
3
Special estimated tax payments. P.L.
Electronic Filing . . . . . . . . . . . .
2
115-97 repealed section 847 (Special
Tax rate. The tax is 21 percent of taxable
When To File . . . . . . . . . . . . . .
3
estimated tax payments) for tax years
income. See section 11, as amended by
Who Must Sign . . . . . . . . . . . . .
3
beginning after 2017. See Form 8816 and
P.L. 115-97.
Paid Preparer Authorization . . . . .
3
its instructions.
Statements . . . . . . . . . . . . . . .
3
Alternative minimum tax. The
Modification of proration rules for
Assembling the Return . . . . . . . .
3
alternative minimum tax does not apply to
property and casualty insurance com-
corporations for tax years beginning after
Tax Payments . . . . . . . . . . . . .
4
panies. P.L. 115-97, modified the
December 31, 2017. In addition,
Estimated Tax Payments . . . . . .
4
reduction of deduction under section
corporations may treat a portion of their
Interest and Penalties . . . . . . . . .
4
832(b)(5)(B) in Schedule F. See
prior year alternative minimum tax credit
Accounting Methods . . . . . . . . .
5
Reduction of deduction under section
carryover as refundable. See Form 8827.
Accounting Period . . . . . . . . . . .
5
832(b)(5)(B).
Rounding Off to Whole
Base erosion minimum tax (BEAT).
Dollars . . . . . . . . . . . . . . . .
5
Domestic production activities deduc-
See Form 8991 and its instructions to
tion (DPAD). The DPAD has been
Recordkeeping . . . . . . . . . . . . .
5
determine whether the corporation is
repealed for tax years beginning after
Other Forms and
subject to the base erosion minimum tax
Statements That May Be
December 31, 2017, with limited
under section 59A.
Required . . . . . . . . . . . . . . .
5
exceptions. See
Schedule A, Line 31.
Schedule I, Line 15. New question 15
Specific Instructions . . . . . . . . . . . . .
6
Other deductions.
requires the corporation to report whether
Period Covered
. . . . . . . . . . . .
6
Treatment of deferred foreign income
it has gross receipts of at least $500
Name and Address . . . . . . . . . .
6
upon transition to participation ex-
million in any one of the 3 preceding tax
Identifying Information . . . . . . . .
6
emption system of taxation. Direct and
years. See the Instructions for Form 8991
Employer Identification
indirect U.S. owners of specified foreign
for further guidance on the determination
Number (EIN) . . . . . . . . . . . .
7
corporations may have an inclusion under
of gross receipts and, if so required,
Section 953 Elections . . . . . . . . .
7
section 965 based on the accumulated
complete and attach Form 8991 to this
Final Return, Name Change,
post-1986 deferred foreign income of the
return.
Address Change, or
specified foreign corporations. See
Amended Return . . . . . . . . . .
7
Schedule I, Line 16. Under section
section 965, as amended by P.L. 115-97.
Taxable Income . . . . . . . . . . . .
7
267A, a deduction for certain interest or
Limitation on business interest. There
royalty paid or accrued to a related party
Tax Computation and
are new business interest rules for tax
Payments . . . . . . . . . . . . . .
7
pursuant to a hybrid transaction or by, or
years beginning after 2017. See section
to, a hybrid entity may be disallowed to the
Schedule A . . . . . . . . . . . . . . .
9
163(j) and Form 8990.
extent the related party, under its tax laws,
Schedule B, Part I . . . . . . . . . .
15
does not include the amount in income or
Schedule B, Part II . . . . . . . . . .
16
Deduction for foreign-source portion
is allowed a deduction with respect to the
Schedule C . . . . . . . . . . . . . .
16
of dividends received by domestic cor-
amount.
Schedule E . . . . . . . . . . . . . .
18
porations from specified 10%-owned
foreign corporations. P.L. 115-97
Schedule F . . . . . . . . . . . . . .
18
Global intangible low-taxed income in-
enacted new section 245A. Section 245A
cluded in gross income of United
Schedule G . . . . . . . . . . . . . .
19
permits certain domestic corporations that
States shareholders (GILTI). Generally,
Schedule H . . . . . . . . . . . . . .
20
are U.S. shareholders of specified
each United States shareholder of any
Schedule I . . . . . . . . . . . . . . .
20
10%-owned foreign corporations a 100%
controlled foreign corporation must
Schedule L . . . . . . . . . . . . . .
22
deduction for the foreign source portion of
include in gross income global intangible
Schedule M-1 . . . . . . . . . . . . .
22
any dividend received from that specified
low-taxed income for tax years of those
Index . . . . . . . . . . . . . . . . . . . . .
24
10%-owned foreign corporation. Section
foreign corporations beginning after 2017
Feb 15, 2019
Cat. No. 64537I
2018
Department of the Treasury
Internal Revenue Service
Instructions for
Form 1120-PC
U.S. Property and Casualty Insurance Company Income Tax Return
Future Developments
that end with or within the shareholder's
Section references are to the Internal Revenue
Code unless otherwise noted.
tax year. See section 951A, as added by
For the latest information about
P.L. 115-97, and Form 8992.
Contents
Page
developments related to Form 1120-PC
and its instructions, such as legislation
Deduction for foreign-derived intangi-
What's New . . . . . . . . . . . . . . . . . .
1
enacted after they were published, go to
ble income and global intangible
Reminders . . . . . . . . . . . . . . . . . . .
2
IRS.gov/Form1120PC.
low-taxed income. A domestic
Photographs of Missing Children . . . .
2
corporation may be allowed a deduction
The Taxpayer Advocate Service . . . . .
2
Additional guidance may be issued
related to the sum of its foreign-derived
How To Get Forms and
subsequent to the publication of these
intangible income (FDII) and global
Publications . . . . . . . . . . . . . . .
2
instructions. Please review any additional
intangible low-taxed income (GILTI) for tax
General Instructions . . . . . . . . . . . . .
2
information in the website prior to the
years beginning after 2017. See section
Purpose of Form . . . . . . . . . . . .
2
completion of the form.
250, as added by P.L. 115-97, and Form
Who Must File . . . . . . . . . . . . .
2
8993.
What's New
Where To File . . . . . . . . . . . . . .
3
Special estimated tax payments. P.L.
Electronic Filing . . . . . . . . . . . .
2
115-97 repealed section 847 (Special
Tax rate. The tax is 21 percent of taxable
When To File . . . . . . . . . . . . . .
3
estimated tax payments) for tax years
income. See section 11, as amended by
Who Must Sign . . . . . . . . . . . . .
3
beginning after 2017. See Form 8816 and
P.L. 115-97.
Paid Preparer Authorization . . . . .
3
its instructions.
Statements . . . . . . . . . . . . . . .
3
Alternative minimum tax. The
Modification of proration rules for
Assembling the Return . . . . . . . .
3
alternative minimum tax does not apply to
property and casualty insurance com-
corporations for tax years beginning after
Tax Payments . . . . . . . . . . . . .
4
panies. P.L. 115-97, modified the
December 31, 2017. In addition,
Estimated Tax Payments . . . . . .
4
reduction of deduction under section
corporations may treat a portion of their
Interest and Penalties . . . . . . . . .
4
832(b)(5)(B) in Schedule F. See
prior year alternative minimum tax credit
Accounting Methods . . . . . . . . .
5
Reduction of deduction under section
carryover as refundable. See Form 8827.
Accounting Period . . . . . . . . . . .
5
832(b)(5)(B).
Rounding Off to Whole
Base erosion minimum tax (BEAT).
Dollars . . . . . . . . . . . . . . . .
5
Domestic production activities deduc-
See Form 8991 and its instructions to
tion (DPAD). The DPAD has been
Recordkeeping . . . . . . . . . . . . .
5
determine whether the corporation is
repealed for tax years beginning after
Other Forms and
subject to the base erosion minimum tax
Statements That May Be
December 31, 2017, with limited
under section 59A.
Required . . . . . . . . . . . . . . .
5
exceptions. See
Schedule A, Line 31.
Schedule I, Line 15. New question 15
Specific Instructions . . . . . . . . . . . . .
6
Other deductions.
requires the corporation to report whether
Period Covered
. . . . . . . . . . . .
6
Treatment of deferred foreign income
it has gross receipts of at least $500
Name and Address . . . . . . . . . .
6
upon transition to participation ex-
million in any one of the 3 preceding tax
Identifying Information . . . . . . . .
6
emption system of taxation. Direct and
years. See the Instructions for Form 8991
Employer Identification
indirect U.S. owners of specified foreign
for further guidance on the determination
Number (EIN) . . . . . . . . . . . .
7
corporations may have an inclusion under
of gross receipts and, if so required,
Section 953 Elections . . . . . . . . .
7
section 965 based on the accumulated
complete and attach Form 8991 to this
Final Return, Name Change,
post-1986 deferred foreign income of the
return.
Address Change, or
specified foreign corporations. See
Amended Return . . . . . . . . . .
7
Schedule I, Line 16. Under section
section 965, as amended by P.L. 115-97.
Taxable Income . . . . . . . . . . . .
7
267A, a deduction for certain interest or
Limitation on business interest. There
royalty paid or accrued to a related party
Tax Computation and
are new business interest rules for tax
Payments . . . . . . . . . . . . . .
7
pursuant to a hybrid transaction or by, or
years beginning after 2017. See section
to, a hybrid entity may be disallowed to the
Schedule A . . . . . . . . . . . . . . .
9
163(j) and Form 8990.
extent the related party, under its tax laws,
Schedule B, Part I . . . . . . . . . .
15
does not include the amount in income or
Schedule B, Part II . . . . . . . . . .
16
Deduction for foreign-source portion
is allowed a deduction with respect to the
Schedule C . . . . . . . . . . . . . .
16
of dividends received by domestic cor-
amount.
Schedule E . . . . . . . . . . . . . .
18
porations from specified 10%-owned
foreign corporations. P.L. 115-97
Schedule F . . . . . . . . . . . . . .
18
Global intangible low-taxed income in-
enacted new section 245A. Section 245A
cluded in gross income of United
Schedule G . . . . . . . . . . . . . .
19
permits certain domestic corporations that
States shareholders (GILTI). Generally,
Schedule H . . . . . . . . . . . . . .
20
are U.S. shareholders of specified
each United States shareholder of any
Schedule I . . . . . . . . . . . . . . .
20
10%-owned foreign corporations a 100%
controlled foreign corporation must
Schedule L . . . . . . . . . . . . . .
22
deduction for the foreign source portion of
include in gross income global intangible
Schedule M-1 . . . . . . . . . . . . .
22
any dividend received from that specified
low-taxed income for tax years of those
Index . . . . . . . . . . . . . . . . . . . . .
24
10%-owned foreign corporation. Section
foreign corporations beginning after 2017
Feb 15, 2019
Cat. No. 64537I
245A applies to all dividend distributions
and understands their rights under the
companies, other than life insurance
after December 31, 2017.
Taxpayer Bill of
Rights.
companies.
At the time these instructions went
As a taxpayer, the corporation has
Who Must File
to print, several credits and
rights that the IRS must abide by in its
!
Every domestic nonlife insurance
deductions available to
dealings with the corporation. TAS can
CAUTION
company and every foreign corporation
corporations expired December 31, 2017.
help the corporation if:
that would qualify as a nonlife insurance
To find out if legislation extended the
A problem is causing financial difficulty
company subject to taxation under section
credits and deductions and made them
for the business,
831, if it were a U.S. corporation, must file
available for 2018, go to
IRS.gov/
The business is facing an immediate
Form 1120-PC. This includes
Extenders.
threat of adverse action, and
organizations described in section 501(m)
The corporation has tried repeatedly to
(1) that provide commercial-type
contact the IRS but no one has
Reminders
insurance and organizations described in
responded, or the IRS hasn't responded
section 833.
by the date promised.
Patient-centered outcomes research
institute fee. The Patient-Centered
Exceptions. A nonlife insurance
The TAS tax toolkit at
Outcomes Research Institute fee is
company that is:
TaxpayerAdvocate.IRS.gov
can help the
imposed on issuers of specified health
Exempt under section 501(c)(15)
corporation understand these rights.
insurance policies (section 4375) and plan
should file Form 990, Return of
TAS has offices in every state, the
sponsors of applicable self-insured health
Organization Exempt from Income Tax;
District of Columbia, and Puerto Rico.
plans (section 4376) for policy and plan
Subject to taxation under section 831,
Local advocates' numbers are in their
years ending on or after October 1, 2012.
and disposes of its insurance business
local directories and at
and reserves, or otherwise ceases to be
See Form 720 and its instructions for
TaxpayerAdvocate.IRS.gov/Contact-Us.
taxed under section 831, but continues its
more information.
The corporation also can call TAS at
corporate existence while winding up and
Foreign-owned domestic disregarded
1-877-777-4778.
liquidating its affairs, should file Form
entities reporting. A foreign-owned
1120, U.S. Corporation Income Tax
TAS also works to resolve large-scale
domestic disregarded entity may be
Return.
or systemic problems that affect many
required to file Form 5472 even if
taxpayers. If the corporation knows of one
Life insurance companies. Life
otherwise exempt from filing a return. See
of these broad issues, please report it to
insurance companies should file Form
Foreign-owned domestic disregarded
TAS through the Systemic Advocacy
1120-L, U.S. Life Insurance Company
entities
in the instructions for
Who Must
Management System at IRS.gov/SAMS.
Income Tax Return.
File, later.
For more information, go to
Foreign-owned domestic disregarded
Form 8975. Certain U.S. persons that are
IRS.gov/Advocate.
entities. For tax years beginning after
the ultimate parent entity of a U.S.
2016 and ending after December 12,
multinational enterprise group with annual
How To Get Forms
2017, if a foreign person, including a
revenue for the preceding reporting period
and Publications
foreign corporation, wholly owns a
of $850 million or more are required to file
domestic disregarded entity (DE), the
Form 8975. Form 8975 and its Schedules
Internet. You can access the IRS website
domestic DE is treated as a domestic
A (Form 8975) must be filed with the
24 hours a day, 7 days a week, at IRS.gov
corporation separate from its owner (the
income tax return of the ultimate parent
to:
foreign corporation) for purposes of the
entity of a U.S. multinational enterprise
Download forms, instructions, and
reporting requirements under section
group for the tax year in or within which
publications;
6038A that apply to 25% foreign-owned
the reporting period covered by Form
Order IRS products online;
domestic corporations. These rules apply
8975 ends. For more information, see
Research your tax questions online;
to a domestic DE owned by a foreign
Form 8975 and Schedule A (Form 8975)
Search publications online by topic or
insurance company that makes an
and their instructions.
keyword;
election under section 953(c)(3)(C) but do
View Internal Revenue Bulletins (IRBs)
Photographs of
not apply to a domestic DE owned by a
published in recent years; and
foreign insurance company that makes an
Missing Children
Sign up to receive local and national tax
election under section 953(d) (for
news by email.
The Internal Revenue Service is a proud
information on these elections, see the
partner with the
National Center for
instructions for Item D). If a foreign
Tax forms and publications. The
Missing & Exploited Children®
(NCMEC).
insurance company electing under section
corporation can download or print all of the
Photographs of missing children selected
953(c)(3)(C) wholly owns a domestic DE,
forms and publications it may need on
by the Center may appear in instructions
the DE may be required to file Form 5472.
IRS.gov/FormsPubs. Otherwise, the
on pages that would otherwise be blank.
For additional information and
corporation can go to
IRS.gov/
You can help bring these children home
coordination with Form 5472 filing by the
OrderForms
to place an order and have
by looking at the photographs and calling
domestic DE, see the Instructions for
forms mailed to it. The corporation should
1-800-THE-LOST (1-800-843-5678) if you
Form 5472.
receive its order within 10 business days.
recognize a child.
Electronic Filing
General Instructions
The Taxpayer Advocate
See
IRS.gov/Filing
for the latest
Service
information. Also, see
IRS.gov/MeF
and
Purpose of Form
click on the link for “Modernized e-File
The Taxpayer Advocate Service (TAS) is
Use Form 1120-PC, U.S. Property and
Forms” for information on which forms the
an independent organization within the
Casualty Insurance Company Income Tax
corporation can or must e-file.
IRS that helps taxpayers and protects
Return, to report the income, gains,
taxpayer rights. TAS's job is to ensure that
losses, deductions, credits, and to figure
every taxpayer is treated fairly and knows
the income tax liability of insurance
Instructions for Form 1120-PC (2018)
-2-
When To File
Where To File
Generally, a corporation must file its
income tax return by the 15th day of the
File the corporation's return at the applicable IRS address listed below.
4th month after the end of its tax year. A
new corporation filing a short-period return
generally must file by the 15th day of the
If the corporation's principal business, office,
4th month after the short period ends. A
or agency is located in:
Use the following addresses:
corporation that has dissolved generally
Department of the Treasury
must file by the 15th day of the 4th month
The United States
Internal Revenue Service
after the date it dissolved.
Ogden, UT 84201-0012
However, a corporation with a fiscal tax
Internal Revenue Service
year ending June 30 must file by the 15th
A foreign country or U.S. possession
P.O. Box 409101
day of the 3rd month after the end of its
Ogden, UT 84409
tax year. A corporation with a short tax
year ending anytime in June will be
treated as if the short year ended on June
court authorizing signing of the return or
bind the corporation to anything (including
30, and must file by the 15th day of the 3rd
form.
any additional tax liability), or otherwise
month after the end of its tax year.
represent the corporation before the IRS.
If an employee of the corporation
If the due date falls on a Saturday,
The authorization will automatically end
completes Form 1120-PC, the paid
Sunday, or legal holiday, the corporation
no later than the due date (excluding
preparer space should remain blank.
can file on the next business day.
extensions) for filing the corporation's
Anyone who prepares Form 1120-PC but
Private Delivery Services
2018 tax return. If the corporation wants to
does not charge the corporation should
expand the paid preparer's authorization
not complete that section. Generally,
Corporations can use certain private
or revoke the authorization before it ends,
anyone who is paid to prepare the return
delivery services (PDS) designated by the
see Pub. 947, Practice Before the IRS and
must sign it and fill in the “Paid Preparer
IRS to meet the “timely mailing as timely
Power of Attorney.
Use Only” area.
filing” rule for tax returns. Go to
IRS.gov/
PDS
for the current list of designated
Statements
The paid preparer must complete the
services.
required preparer information and:
NAIC annual statement. Regulations
Sign the return in the space provided
The PDS can tell you how to get written
section 1.6012-2(c) requires that the NAIC
for the preparer's signature, and
proof of the mailing date.
annual statement be filed with Form
Give a copy of the return to the
1120-PC. A foreign insurance company
For the IRS mailing address to use if
taxpayer.
subject to tax under section 831 that is not
you are using PDS, go to
IRS.gov/
required to file an annual statement must
Note. A paid preparer may sign original or
PDSstreetAddress.
file a copy of the pro forma annual
amended returns by rubber stamp,
Private delivery services cannot
statement. A penalty for the late filing of a
mechanical device, or computer software
deliver items to P.O. boxes. You
!
return may be imposed for not including
program.
must use the U.S. Postal Service
the annual statement when the return is
CAUTION
to mail any item to an IRS P.O. box
Paid Preparer
filed. However, see Electronic filing, next.
address.
Authorization
Electronic filing. If the domestic or
Extension of Time To File
foreign nonlife insurance company files
If the corporation wants to allow the IRS to
Form 1120-PC electronically, do not
discuss its 2018 tax return with the paid
File Form 7004, Application for Automatic
attach the annual statement or pro forma
preparer who signed it, check the “Yes”
Extension of Time To File Certain
annual statement to the electronically filed
box in the signature area of the return.
Business Income Tax, Information, and
return. However, you must provide a copy
This authorization applies only to the
Other Returns, to request an extension of
of the annual statement or pro forma
individual whose signature appears in the
time to file. Generally, the corporation
annual statement to the Internal Revenue
“Paid Preparer Use Only” section of the
must file Form 7004 by the regular due
Service if requested and retain it with your
return. It does not apply to the firm, if any,
date of the return. See the Instructions for
other tax records for the period required
shown in that section.
Form 7004.
by the regulations.
If the “Yes” box is checked, the
Who Must Sign
Reconciliation. Corporations that do
corporation is authorizing the IRS to call
not file a Schedule M-3 (Form 1120-PC)
The return must be signed and dated by:
the paid preparer to answer any questions
with the Form 1120-PC must attach a
The president, vice-president,
that may arise during the processing of its
statement that reconciles the NAIC Annual
treasurer, assistant treasurer, chief
return. The corporation also is authorizing
Statement to the Form 1120-PC.
accounting officer; or
the paid preparer to:
Any other corporate officer (such as tax
Give the IRS any information that is
Assembling the Return
officer) authorized to sign.
missing from the return,
Call the IRS for information about the
To ensure that the corporation's tax return
If a return is filed on behalf of a
processing of the return or the status of
is correctly processed, attach all
corporation by a receiver, trustee, or
any related refund or payment(s), and
schedules and other forms after page 9 of
assignee, the fiduciary must sign the
Respond to certain IRS notices about
Form 1120-PC in the following order.
return, instead of the corporate officer.
math errors, offsets, and return
1. Schedule N (Form 1120), Foreign
Returns and forms signed by a receiver or
preparation.
Operations of U.S. Corporations.
trustee in bankruptcy on behalf of a
corporation must be accompanied by a
The corporation is not authorizing the
2. Schedule D (Form 1120), Capital
copy of the order or instructions of the
paid preparer to receive any refund check,
Gains and Losses.
Instructions for Form 1120-PC (2018)
-3-
3. Schedule O (Form 1120), Consent
later) on its behalf. EFTPS is a free service
payments when due may be subject to an
Plan and Apportionment Schedule for a
provided by the Department of the
underpayment penalty for the period of
Controlled Group.
Treasury. Services provided by a tax
underpayment. Generally, a corporation is
professional, financial institution, payroll
subject to the penalty if its tax liability is
4. Form 8991, Tax on Base Erosion
service, or other third party may have a
$500 or more and it did not timely pay at
Payments of Taxpayers With Substantial
fee.
least the smaller of:
Gross Receipts.
Its tax liability for the current year, or
5. Form 8992, Global Intangible Low
To get more information about EFTPS
Its prior year tax.
Tax Income (GILTI).
or to enroll in EFTPS, visit
www.eftps.gov
See section 6655 for details and
or call 1-800-555-4477 (TTY/TDD
6. Form 8993, Section 250 Deduction
exceptions, including special rules for
1-800-733-4829).
for Foreign Derived Intangible Income
large corporations.
(FDII) and Global Intangible Low Taxed
Depositing on time. To make your
Use Form 2220, Underpayment of
Income (GILTI).
EFTPS deposits on time, the corporation
Estimated Tax by Corporations, to see if
must submit the transaction by 8 p.m.
7. Form 8302, Electronic Deposit of
the corporation owes a penalty and to
Eastern time the day before the date the
Tax Refund of $1 Million or More.
figure the amount of the penalty. If Form
deposit is due. If the corporation uses a
8. Form 4136, Credit for Federal Tax
2220 is completed, enter the penalty on
third party to make deposits on its behalf,
Paid on Fuels.
line 16. See the instructions for line 16.
they may have different cutoff times.
9. Form 8941, Credit for Small
Foreign insurance companies,
Same-day wire payment option. If the
Employer Health Insurance Premiums.
see Notice 90-13, 1990-1 C.B.
!
corporation fails to submit a deposit
10. Form 851, Affiliations Schedule.
321, before computing estimated
transaction on EFTPS by 8 p.m. Eastern
CAUTION
tax.
11. Additional schedules in
time the day before the date a deposit is
alphabetical order.
due, it can still make the deposit on time
Interest and Penalties
by using the Federal Tax Collection
12. Additional forms in numerical order.
Service (FTCS). Before using the
13. Supporting statements and
If the corporation receives a notice
same-day wire payment method, the
attachments.
about penalties after it files its
!
corporation will need to make
return, send the IRS an
Complete every applicable entry space
arrangements with its financial institution
CAUTION
explanation and we will determine if the
on Form 1120-PC. Do not enter “See
ahead of time regarding availability,
corporation meets reasonable cause
Attached” or “Available Upon Request”
deadlines, and costs. Financial institutions
criteria. Do not attach an explanation
instead of completing the entry spaces. If
may charge a fee for payments made this
when the corporation's return is filed.
more space is needed on the forms or
way. To learn more about making a
schedules, attach separate sheets using
same-day wire payment, go to
IRS.gov/
Interest. Interest is charged on taxes
the same size and format as the printed
SameDayWire.
paid late even if an extension of time to file
forms. If there are supporting statements
is granted. Interest also is charged on
Estimated Tax Payments
and attachments, arrange them in the
penalties imposed for failure to file,
same order as the schedules or forms
Generally, the following rules apply to the
negligence, fraud, substantial valuation
they support and attach them last. Show
corporation's payments of estimated tax.
misstatements, substantial
the totals on the printed forms. Enter the
The corporation must make installment
understatements of tax, and reportable
corporation's name and EIN on each
payments of estimated tax if it expects its
transaction understatements from the due
supporting statement or attachment.
total tax for the year (less applicable
date (including extensions) to the date of
credits) to be $500 or more.
payment. The interest charge is figured at
Tax Payments
The installments are due by the 15th
a rate determined under section 6621.
Generally, the corporation must pay any
day of the 4th, 6th, 9th, and 12th months
Late filing of return. A corporation that
tax due in full no later than the due date for
of the tax year. If any date falls on a
does not file its tax return by the due date,
filing its tax return (not including
Saturday, Sunday, or legal holiday, the
including extensions, may be penalized
extensions). See the instructions for
installment is due on the next regular
5% of the unpaid tax for each month or
line 17. If the due date falls on a Saturday,
business day.
part of a month the return is late, up to a
Sunday, or legal holiday, the payment is
The corporation must use electronic
maximum of 25% of the unpaid tax. The
due on the next day that isn't a Saturday,
funds transfer to make installment
minimum penalty for a return that is over
Sunday, or legal holiday.
payments of estimated tax.
60 days late is the smaller of the tax due
Use Form 1120-W, Estimated Tax for
Electronic Deposit
or $210 (adjusted for inflation). The
Corporations, as a worksheet to compute
Requirement
penalty will not be imposed if the
estimated tax. See the Instructions for
corporation can show that the failure to file
Form 1120-W.
Corporations must use electronic funds
on time was due to reasonable cause. See
Penalties may apply if the corporation
transfer to make all federal tax deposits
Caution, earlier.
does not make required estimated tax
(such as deposits of employment, excise,
payment deposits. See Estimated tax
and corporate income tax). Generally,
Late payment of tax. A corporation that
penalty below.
electronic funds transfers are made using
does not pay the tax when due generally
If the corporation overpaid estimated
the Electronic Federal Tax Payment
may be penalized
/
of 1% of the unpaid
1
2
tax, it may be able to get a quick refund by
System (EFTPS).
tax for each month or part of a month the
filing Form 4466, Corporation Application
tax is not paid, up to a maximum of 25% of
If the corporation does not want to use
for Quick Refund of Overpayment of
the unpaid tax. See Caution, earlier.
the EFTPS, it can arrange for its tax
Estimated Tax.
Trust fund recovery penalty. This
professional, financial institution, payroll
See the instructions for lines 15c and
penalty may apply if certain excise,
service, or other trusted third party to
15e, Form 1120-PC, later.
income, social security, and Medicare
make deposits on its behalf. Also, it can
taxes that must be collected or withheld
arrange for its financial institution to
Estimated tax penalty. A corporation
are not collected or withheld, or these
submit a same-day payment (discussed
that does not make estimated tax
Instructions for Form 1120-PC (2018)
-4-
Other Forms and
taxes are not paid. These taxes generally
Certain changes in method of account-
are reported on:
Statements That May Be
ing for organizations to which section
Form 720, Quarterly Federal Excise
833 applies. Blue Cross or Blue Shield
Required
Tax Return;
organizations under section 833(c)(2), or
Form 941, Employer's QUARTERLY
organizations described in section 833(c)
Form 8992. Use Form 8992 to figure the
Federal Tax Return;
(3), can obtain automatic consent to
domestic corporation’s GILTI under
Form 944, Employer's ANNUAL
change the method of accounting for
section 951A and attach it to Form
Federal Tax Return; or
unearned premiums resulting from either a
1120-PC.
Form 945, Annual Return of Withheld
failure to meet the medical loss ratio
Federal Income Tax.
Form 8993. Use Form 8993 to figure the
(MLR) requirements of section 833(c)(5),
amount of the eligible deduction for FDII
The trust fund recovery penalty may be
or meeting the MLR requirements after
and GILTI under section 250 and attach it
imposed on all persons who are
failing to do so in a prior year. Form 3115
to Form 1120-PC.
determined by the IRS to be responsible
must be filed in order to make this change
for collecting, accounting for, or paying
in accounting method. See the
Reportable transaction disclosure
over these taxes, and who acted willfully in
Instructions for Form 3115.
statement. Participants in any reportable
not doing so. The penalty is equal to the
See Rev. Proc. 2017-30.
transaction must file Form 8886,
full amount of the unpaid trust fund tax.
Reportable Transaction Disclosure
See the Instructions for Form 720 or Pub.
Accounting Period
Statement. See the Instructions for Form
15 (Circular E), Employer's Tax Guide, for
8886.
An insurance company must figure its
details, including the definition of
taxable income on the basis of a tax year.
Reportable transactions by material
responsible persons.
A tax year is the annual accounting period
advisors. Material advisors to any
Other penalties. Other penalties can be
an insurance company uses to keep its
reportable transaction must file Form
imposed for negligence, substantial
records and report its income and
8918, Material Advisor Disclosure
understatement of tax, reportable
expenses.
Statement. See the Instructions for Form
transaction understatements, and fraud.
8918.
As a general rule under section 843,
See sections 6662, 6662A, and 6663.
the tax year for every insurance company
Transfers to a corporation controlled
Accounting Methods
is the calendar year. However, if an
by the transferor. Every significant
insurance company joins in the filing of a
transferor (as defined in Regulations
Figure taxable income using the method of
consolidated return, it may adopt the tax
section 1.351-3(d)) that receives stock of
accounting regularly used in keeping the
year of the common parent corporation
a corporation in exchange for property in a
corporation's books and records. In all
even if that year is not a calendar year.
nonrecognition event must include the
cases, the method used must clearly show
statement required by Regulations section
taxable income. Permissible methods
Rounding Off to Whole
1.351-3(a) on or with the transferor's tax
include cash, accrual, or any other method
Dollars
return for the tax year of the exchange.
authorized by the Internal Revenue Code.
The transferee corporation must include
The corporation can round off cents to
the statement required by Regulations
The gross amounts of underwriting and
whole dollars on its return and schedules.
section 1.351-3(b) on or with its return for
investment income should be computed
If the corporation does round to whole
the tax year of the exchange, unless all the
on the basis of the Statement of Income of
dollars, it must round all amounts. To
required information is included in any
the NAIC annual statement to the extent
round, drop amounts under 50 cents and
statement(s) provided by a significant
not inconsistent with the Internal Revenue
increase amounts from 50 to 99 cents to
transferor that is attached to the same
Code and its Regulations. In all cases, the
the next dollar. For example, $1.39
return for the same section 351 exchange.
method used must clearly show taxable
becomes $1 and $2.50 becomes $3.
If the transferor or transferee corporation
income.
is a controlled foreign corporation, each
If two or more amounts must be added
Change in accounting method.
U.S. shareholder (within the meaning of
to figure the amount to enter on a line,
Generally, the corporation must get IRS
section 951(b)) must include the required
include cents when adding the amounts
consent to change either an overall
statement on or with its return.
and round off only the total.
method of accounting or the accounting
Distributions under section 355. Every
treatment of any material item. To do so,
Recordkeeping
corporation that makes a distribution of
the corporation generally must file Form
stock or securities of a controlled
3115, Application for Change in
Keep the corporation's records for as long
corporation, as described in section 355
as they may be needed for the
Accounting Method. See the Instructions
(or so much of section 356 as it relates to
administration of any provision of the
for Form 3115 for more information and
section 355), must include the statement
exceptions, including filing exceptions for
Internal Revenue Code. Usually, records
required by Regulations section
qualified small business taxpayers and
that support an item of income, deduction,
1.355-5(a) on or with its return for the year
filing exceptions for certain first-year
or credit on the return must be kept for 3
of the distribution. A significant distributee
years from the date the return is due or
tangible property changes for small
(as defined in Regulations section
filed, whichever is later. Keep records that
business taxpayers. Also, see Pub. 538.
1.355-5(c)) that receives stock or
verify the corporation's basis in property
Safe harbor method of accounting for
securities of a controlled corporation must
for as long as they are needed to figure
premium acquisition expenses.
include the statement required by
the basis of the original or replacement
Insurance companies subject to tax under
Regulations section 1.355-5(b) on or with
property.
section 831 are provided with a safe
its return for the year of receipt. If the
harbor method of accounting for premium
The corporation should keep copies of
distributing or distributee corporation is a
acquisition expenses. Form 3115 must be
all filed returns. They help in preparing
controlled foreign corporation, each U.S.
filed in order to change to the safe harbor
future and amended returns and in the
shareholder (within the meaning of section
method. For more information, see the
calculation of earnings and profits.
951(b)) must include the statement on or
Instructions for Form 3115.
with its return.
Instructions for Form 1120-PC (2018)
-5-

Download Instructions for IRS Form 1120-PC U.S. Property and Casualty Insurance Company Income Tax Return 2018

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