C corporations deadline and penalty

Updated: Dec 3, 2021

C-corporations must file a tax return on Form 1120 every year. The filing deadline on C corporation (Form 1120) is April, 15 this year 2018.

Take in mind, even if you’re more than five months late filing the corporate return, the corporation can continue to accrue additional civil penalties.

In addition to the penalties for failing to file, the IRS can charge the corporation a separate penalty for paying taxes after the filing deadline. This penalty will increase the amount of tax that the corporation owes by one-half of a percent for each month it remains unpaid. The IRS will also charge interest on the corporation’s unpaid tax and penalties until everything is paid off.

However, a corporation that does not file taxes for multiple years in a row may be subject to de-registration.

The penalty is 5% per month or part of a month that the return is late up to a maximum of 25% tax owed.

For example for C Corporation, if you have not filed for one month and owe $20,000 in taxes, multiply $20,000 by 5 percent to get the penalty amount of $1,000. If your return is not filed for more than 60 days, the minimum penalty is $135 or the unpaid tax amount, whichever is smaller. The maximum penalty the IRS can impose is 25 percent of the unpaid tax amount.

Once you file the return and pay the overdue taxes and related penalties, the matter is closed.

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