Form 1120X

Generally, any business that has made a mistake on its original income tax return must file an amended return to correct it. Incorrect information on a corporate return can result in an overpayment or underpayment of taxes, so it’s important to file the correct information. A Form 1120X is an amended return that incorporated businesses use to correct mistakes on their original corporation income tax return. For example, if the business forgot to include an expense or deduction on their original return, they would file a Form 1120X to fix the error.

Amended returns must be submitted electronically with the FTB unless the taxpayer is filing under a waiver program, such as the Voluntary Disclosure Program, or is otherwise eligible to file on paper.

How to file Form 1120X?

Filing Form 1120X can be a complex process, and it is recommended that corporations seek the advice of a tax professional before attempting to file. Errors or mistakes on Form 1120X can result in additional taxes, penalties, and interest, so it is essential to ensure that the form is completed accurately and submitted in a timely manner. It is important to note that a statute of limitations exists on filing Form 1120X. Generally, a corporation has three years from the date the original tax return was filed or two years from the date the tax was paid, whichever is later, to file Form 1120X. If the corporation fails to file within this timeframe, it may forfeit any potential refunds or credits it may be entitled to.

Before you begin:

• Ensure that you have a copy of your original return. You can obtain a copy of your return from the IRS website or contact the IRS directly to request one.
• Once you have a copy of your original return, complete Form 1120X.
• Complete the entire interview process, and note any information that has changed. This will help the FTB process your amendment quickly and accurately.

Form 1120X Instructions

1. Enter the amounts shown on the original or last amended return in column (a). Explain each change and attach supporting schedules, statements, or forms.
2. In column (b), enter the net increase or decrease in tax due to a change you made to the original return. For example, if you added back in an amount of income or subtracted out an overpayment from an underpayment, add or subtract that same amount from your total tax for line 2.
3. In column (c), enter the new total of all credits earned on the original return. For example, enter that amount here if your corporation earned the Coalfield Employment Enhancement Tax Credit. Also, in column (d), enter the new total of all nonrefundable tax credits earned on the original return. For example, enter the amount of all tax credits from lines 6 through 9 on the original return. If you are amending a federal return for an S corporation, include the modified Schedule P (100) or Schedule P (100W), Alternative Minimum Tax, and Credit Limitations – Corporations and Water’s Edge Filers.