Form 1120 changes for 2025

• Late filing: for returns due in 2026, a return more than 60 days late has a minimum penalty of the smaller of the tax due or $525.
• Direct deposit: new fields on lines 37c, 37d and 37e, with the refund amount on 37b; pay balances due on line 35 electronically.
• Section 174A: domestic research and experimental costs are deductible for tax years beginning after 2024, or can be amortized over at least 60 months, with transition options for 2022 to 2024 amounts (Rev. Proc. 2025-28).

• Section 1062: tax on gain from selling qualified farmland to a qualified farmer can be paid in four installments for tax years beginning after July 4, 2025. The full liability goes on Schedule J, line 22b, and the first installment on Form 1120, line 32. Notice 2026-3 gives estimated tax penalty relief.
• CAMT: the section 6655 penalty for underpaid estimates tied to corporate AMT is waived again for 2025 (Notice 2025-27, line 34).
• Schedule K, question 29: an optional interim simplified method for applicable corporation status under section 59(k).
• Section 181 and 168(k): qualified sound recording productions.
• Section 139L: a partial exclusion for qualified lenders’ interest on loans secured by rural or agricultural real property, for tax years ending after July 4, 2025 (Notice 2025-71).

The IRS has posted a draft 2026 Form 1120 (created May 28, 2026). The 2026 instructions were not published when we checked in October 2026, so this page does not list 2026 changes yet.

Research costs are easier to deduct when they are coded as research during the year. In HelloBooks, give R&E its own accounts and attach contractor invoices to each payment, so the section 174A schedule is drawn from the ledger.