Form 1120-S - New Year's Final Forms Not Yet Released

When an S Corporation dissolves, terminates, or ceases operations, a final tax return must be filed by the 15th day of the third month following the date its tax year ended. While the instructions for the 2020 Form 1120-S U.S. Income Tax Return for an S Corporation state the form can be used when filing a short year return which begins and ends in 2021, TaxAct does not support this scenario.

Per IRS Instructions for Form 1120-S U.S. Income Tax Return for an S Corporation, on page 12:

Period Covered

File the 2020 return for calendar year 2020 and fiscal years that begin in 2020 and end in 2021. For a fiscal or short tax year return, fill in the tax year space at the top of the form.

The 2020 Form 1120-S can also be used if:

  • The corporation has a tax year of less than 12 months that begins and ends in 2021, and
  • The 2021 Form 1120-S isn't available at the time the corporation is required to file its return.

The corporation must show its 2021 tax year on the 2020 Form 1120-S and take into account any tax law changes that are effective for tax years beginning after December 31, 2020.

Therefore, if the due date of the final tax return falls before the new year's tax forms are released by the IRS, you will need to use the current year's tax forms.

As a possible work-around for your particular requirement, you could manually enter any amounts which are affected by 2021 law changes and paper file the return. You will need to verify that the proper amounts are being reported on the Form 1120-S return based on the tax code for 2021 and override those entries that would be changed due to tax law changes (TaxAct will calculate based on the 2020 tax code).

An Alert will be generated which states: Error or Omission: Invalid Tax Year
An invalid tax year has been entered. The tax year must begin in 2020 and the ending date must be after the beginning date.

This Alert will prevent the e-filing of the return.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.