Schedule A

Report gross income from sources outside the United States for the applicable separate category in columns 3(a) through 11. Report the applicable deductions to this gross income in columns 13 and 14. Report any net operating loss carryover in column 15.

Column 1(a). Column 1(a) generally requests an employer identification number (EIN) or a reference ID number for related persons or their QBUs from or through which the corporation derived foreign source income and/or paid or accrued creditable foreign taxes.

• NOL

• HTKO

• 951A

• G2B

• B2G See the instructions for column 1(b), later, for more information regarding when the above entries can be made in column 1(b).

Note: Taxpayers no longer have the option of entering “FOREIGNUS” or “APPLIED FOR” in this column. Instead, if the related person or their QBU does not have an EIN, the taxpayer must use a reference ID number that uniquely identifies such related person or QBU, using the rules set forth in Reference ID numbers , in the Requirements section, later.

Where gross income is derived from a related person (within the meaning of section 267(b) or 707(b)), enter the EIN or reference ID number of such related person. In the case of income derived from a QBU of the related person, enter the EIN or reference ID number of the QBU. Enter the EIN or reference ID number of related entities and their QBUs through which the corporation paid or accrued creditable foreign taxes, even if no income from these entities is reported on Schedule A. If gross income is received or derived from an entity other than a related person, an EIN or reference ID number is not required.

Example 1. Domestic Corporation earns sales income from sales to unrelated persons. Domestic Corporation leaves column 1(a) blank and enters the sales income in column 7.

Example 2. USC, a domestic corporation, takes into account its distributive share of partnership income with respect to USPS, a domestic partnership in which USC has a 60% interest. In column 1(a), USC enters the identifying number for USPS.

Reference ID numbers. A reference ID number is a number established by or on behalf of the domestic corporation filing Form 1118. With respect to Schedule A, these numbers are used to uniquely identify the payor with respect to payments from related persons, in order to determine the proper source of such payment. With respect to Schedules C through E, these numbers are used to uniquely identify foreign corporations in order to keep track of those corporations from tax year to tax year. The reference ID number must meet the requirements set forth below.

Note: Because reference ID numbers are established by or on behalf of the U.S. corporation filing certain forms such as Form 1118, there is no need to apply to the IRS to request a reference ID number or for permission to use these numbers.

Requirements. The reference ID number must be alphanumeric (defined below) and no special characters or spaces are permitted. The length of a given reference ID number is limited to 50 characters.

For these purposes, the term “alphanumeric” means the entry can be alphabetic, numeric, or any combination of the two.

However, enter in column 1(a) the “Unrelated code” in cases where the corporation derived foreign source income and/or paid or accrued creditable foreign taxes from or through unrelated persons or their QBUs. Also, column 1(a) can be left blank, but only if one of the following seven entries is made in column 1(b).

• 863(b)

• RIC

Instructions for Form 1118 (Rev. 12-2025) 9

The same reference ID number must be used consistently from tax year to tax year with respect to a given entity. If for any reason a reference ID number falls out of use (for example, the entity no longer exists due to disposition or liquidation), the reference ID number used for that entity cannot be used again for another entity for purposes of filing Form 1118.

There are some situations that require correlation of a new reference ID number with a previous reference ID number. For example:

• In the case of a merger or acquisition, a Form 1118 filer must use a reference ID number which correlates the previous reference ID number with the new reference ID number assigned to the entity.

• In the case of an entity classification election that is made on behalf of a foreign corporation on Form 8832, Regulations section 301.6109-1(b)(2)(v) requires the foreign corporation to have an EIN for this election. For the first year that Form 1118 is filed after an entity classification election is made on behalf of the foreign corporation on Form 8832, both the new EIN and the old reference ID number must be entered in column 1(a), as explained in the next paragraph.

You must correlate the identifying numbers as follows: New EIN or reference ID number [space] Old reference ID number. If there is more than one old reference ID number, you must enter a space between each such number. As indicated above, the length of a given reference ID number is limited to 50 characters and each number must be alphanumeric and no special characters are permitted.

Note: This correlation requirement applies only to the first year the new reference ID number is used.

Branches. For each branch that is not a foreign branch, as defined under Regulations section 1.904-4(f)(3)(vii), use a single line to report such branch’s gross income and deductions. In column 1(a), enter “Branch.” If there is more than one branch, enter the identifying number of the branch (as reported in Form 8858) after the word “Branch” on each line. These amounts should be reported on a Form 1118 other than the Form 1118 for the foreign branch income category.

Example. USC, a domestic corporation, has a branch in Country X. The activities of the branch do not constitute a trade or business. In column 1(a), USC enters the word “Branch.” USC will report the income and expenses of the branch in the appropriate columns.

See below with respect to QBUs that are foreign branches as defined under Regulations section 1.904-4(f) (3)(vii).

Special Cases for Columns 1 and 2 Except as otherwise instructed below, income of a U.S. shareholder with respect to the same related person but from multiple sources should be reported on a country-by-country basis.

Example. USC, a domestic corporation, has employees who perform services in Country X and Country Y for the same related person. The related person has a reference ID number of 1000016. USC earns gross income of $10 with respect to services performed for the

related person in Country X and USC earns gross income of $15 with respect to services performed for the related person in Country Y. The two-letter country code for Country X is XX and the two-letter country code for Country Y is YY. On Schedule A, USC reports as follows.

USC makes the following entries on the first of two lines on Schedule A.

Column Entry

1(a) 1000016

2 XX

8 10

USC makes the following entries on the second of two lines on Schedule A.

Column Entry

1(a) 1000016

2 YY

8 15

Qualified business units (QBUs). For QBUs that are foreign branches under Regulations section 1.904-4(f)(3) (vii), use a separate line for each such branch to report each branch’s gross income and deductions. Report these amounts on a per-country basis. In column 1(a), enter the EIN or reference ID number of the QBU. Enter the country code in column 2. These amounts should be reported on Form 1118 for foreign branch category income or passive category income.

Column 1(b). Enter the code(s) for specific types of foreign source income with respect to which taxpayers are permitted to aggregate all such income and report the totals on a single line on Schedule A.

Code Aggregate Foreign Source Income

863(b) Section 863(b) income

RIC Regulated Investment Company

NOL Net Operating Loss

HTKO High-Tax Kick-Out

951A Section 951A income

G2B General to Branch

B2G Branch to General

Section 863(b) gross income and deductions. Aggregate all section 863(b) foreign source gross income and deductions and report the totals on a single line. It may be necessary to enter amounts in multiple columns on that single line, depending upon the nature of the section 863(b) gross income and deductions. For example, leave columns 1(a) and 2 blank, enter “863(b)” in column 1(b), and enter (as a positive number) all section 863(b) gross income (in columns 3 through 12)

10 Instructions for Form 1118 (Rev. 12-2025)

and all section 863(b) deductions (in columns 13 through 16). Also enter the net amount in column 17. Note that the totals are being reported on a single line because it is not necessary to report section 863(b) gross income and deductions on a per-country basis.

Regulated investment company (RIC) pass-through amounts. Aggregate all income passed through from RICs and report the total on a single line. Leave columns 1(a) and 2 blank, enter “RIC” in column 1(b), and report the total in column 17. Note that the totals are being reported on a single line because it is not necessary to report the RIC pass-through amounts on a per-country basis.

Net operating losses (NOLs). Report any NOL carryover on a single line. Leave columns 1(a) and 2 blank, enter “NOL” in column 1(b), and report the total in column 15. Note that the totals are being reported on a single line because it is not necessary to report the NOL on a per-country basis.

Reclassifications of high-taxed income. Aggregate all reclassifications of high-taxed income and report the total on a single line. With respect to passive category income, for items of income that have been included on Schedule A and that must be reclassified under sections 904(d)(2)(B)(iii)(II) and 904(d)(2)(F), leave columns 1(a) and 2 blank and enter “HTKO” in column 1(b) and enter (as a negative number) in column 17 the net amount of income that is being reclassified from passive category income. With respect to the category of income to which such passive income is reclassified, leave columns 1(a) and 2 blank, enter “HTKO” in column 1(b), and enter (as a positive number) in column 17 the net amount of income that is being reclassified to such category of income. Note that the reclassifications are being reported on a single line because it is not necessary to report them on a per-country basis. Also, note that tax reclassifications are needed on Schedule B. See those instructions for more information.

Inclusions under section 951A. Because computations for inclusions under section 951A are reported on separate Form 8992, Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), report the inclusion under section 951A on a single line. Specifically, there is no need to report the identifying numbers and various countries associated with an inclusion under section 951A on Form 1118.

For inclusions under section 951A, enter “951A” in column 1(b) instead of a two-letter code. Leave columns 1(a) and 2 blank.

Reattribution of income by reason of disregarded payments between a foreign branch and its foreign branch owner. For reattribution of income from the general category to the foreign branch category, enter “G2B” in column 1(b) instead of a two-letter code. Leave column 1(a) blank.

For reattribution of income from the foreign branch category to the general category, enter “B2G” in column 1(b) instead of a two-letter code. Leave column 1(a) blank. See Regulations section 1.904-4(f)(2)(vi)(B) for more information regarding the rules pertaining to reattribution

of income by reason of disregarded payments between a foreign branch and its foreign branch owner.

Column 2. Enter the two-letter code (from the list at IRS.gov/CountryCodes ) of each foreign country and U.S. territory within which income is sourced and/or to which taxes were paid or accrued.

Note: Complete this column with respect to all income regardless of whether such income is from a related person.

Column 3(a). Report all inclusions under sections 951(a) (1) (including amounts under section 951(a)(1)(B) and section 964(e)(4)) and 951A (before gross-up). See section 904(d)(3) and Look-Through Rules, earlier, for more information with respect to the separate category of such inclusions. For each inclusion under section 951(a) (1) with respect to a CFC, make sure to enter the appropriate identifying number in column 1(a) and the country of residence of the CFC in column 2.

Note: Inclusions under section 951(a)(1) now include hybrid dividends received by a CFC from another CFC of the same U.S. shareholder. See section 245A(e)(2).

Do not report the inclusion under section 951A net of the deduction allowed under section 250. The deduction under section 250 is taken into account in Schedule A, column 13(c).

If the corporation is a U.S. shareholder in a PFIC that is a qualified electing fund, report all income deemed received (before gross-up) under section 1293.

Column 3(b). In column 3(b), include taxes deemed paid by a domestic corporation with respect to inclusions under section 951(a)(1) and section 951A as gross-ups. For inclusions under section 951(a)(1), the gross-up is the taxes deemed paid as reported in the total of Schedule C, column 7. The gross-up for inclusions under section 951A is the amount computed in Schedule D, Part II, column 3.

Column 4. Report dividends from sources outside the United States for the applicable separate category. This includes dividends eligible for the dividends received deduction under section 245A. Note that hybrid dividends are not eligible for the dividends received deduction.

Note: In general, dividends from a domestic corporation are U.S. source income, including dividends from a domestic corporation which has 80% or more of its gross income from sources outside the United States.

Column 5. Enter interest received from foreign sources. See section 861(c) for the treatment of interest from a domestic corporation that meets the foreign business requirement.

Column 7. Include foreign source gross income from sales (net of returns and allowances and less costs of goods sold). Include the foreign source portion of section 863(b) sales in this column.

Note: Under section 863(b), income from the sale of inventory property is sourced to the place of production. Accordingly, do not include inventory produced in the United States and sold overseas in this column.

Instructions for Form 1118 (Rev. 12-2025) 11

Column 8. Include gross income, including compensation, commissions, fees, etc., for technical, managerial, engineering, construction, scientific, or similar services outside the United States.

Columns 9 and 10. Include the following amounts in column 9. Use a separate line for each type of gain and enter the corresponding code in column 10.

• Foreign source exchange gain recognized under section 986(c) on a distribution of PTEP. Enter code “986c” in column 10.

• Foreign source exchange gain recognized under section 987(3) on a remittance from a QBU. Enter code “987” in column 10.

• Foreign source exchange gain recognized under section 988. Enter code “988” in column 10.

Note: Section 988 exchange gain or loss is sourced by reference to the residence of the taxpayer or the QBU of the taxpayer on whose books the nonfunctional currency asset or liability is properly reflected.

Column 11. Include other gross income from sources outside the United States for the applicable separate category. Attach a schedule identifying the gross income by type.

Column 13(a). Enter the dividends received deduction allowed on foreign source dividends under section 245A. This should be equal to the amount reported in Schedule A, column 4, if all such dividend income is eligible for the dividends received deduction.

Note: Certain hybrid dividends are not eligible for the dividends received deduction under section 245A. See section 245A(e)(1).

Note: An amount treated as a dividend under section 1291(d)(2)(B) (related to PFICs) is ineligible for the dividends received deduction. See section 245A(f).

Note: The foreign branch income and section 951A income categories do not include any dividend income eligible to be offset by the deduction under section 245A.

Column 13(b). Enter the deduction allowed under section 250(a)(1)(A) with respect to foreign derived intangible income, taking into account the other provisions of section 250, that is allocated and apportioned to foreign source income in the applicable separate category of income. See Regulations section 1.861-8(e)(13).

Column 13(c). Enter the deduction allowed under section 250(a)(1)(B) with respect to GILTI (section 951A inclusion), taking into account the other provisions of section 250, that is allocated and apportioned to foreign source income in the applicable separate category of income. See Regulations section 1.861-8(e)(14).

Column 13(d). Enter the depreciation, depletion, and amortization deductions related to rental, royalty, and licensing expenses that are allocated and apportioned to foreign source income in the applicable separate category of income.

Column 13(e). Enter the other allocable expenses related to rental, royalty, and licensing expenses that are

allocated and apportioned to foreign source income in the applicable separate category of income.

Column 13(f). Enter expenses allocable to gross income from sales that are allocated and apportioned to foreign source income in the applicable separate category of income (the amount entered in column 7).

Column 13(g). Enter expenses allocable to gross income from performance of services that are allocated and apportioned to foreign source income in the applicable separate category of income (the amount entered in column 8).

Columns 13(h) and 13(i). Include any foreign source exchange loss recognized under section 986(c) on a distribution of PTEP, any foreign source exchange loss recognized under section 987(3) on a remittance from a QBU, and any foreign source exchange loss recognized under section 988. Use a separate line for each type of loss and enter the corresponding code in column 13(i). See the instructions for Schedule A, column 9, earlier, for the applicable codes.

Column 14. Enter only the apportioned share from the applicable line of Schedule H, Part I, column (b); Part II, column (f); and Part III, column (g) that relates to gross income reported in columns 3 through 11 of Schedule A. The applicable line of Schedule H, Part I, column (b) is the amount on line 6a(7), 6b(7), 6c(7), 6d(7), or 6e(7) of column (b) that corresponds with the category of income for which the corporation is completing Form 1118. For example, if the code entered on Schedule H, Part I, line 6a is “PAS,” then enter the amount from line 6a(7), column (b) on the Form 1118 that the corporation is completing for the passive category of income (as indicated on line a at the top of page 1 of Form 1118). The applicable line of Schedule H, Part II, column (f) is the amount on line 3a(2), 3b(2), 3c(2), 3d(2), or 3e(2) of column (f) that corresponds with the category of income for which the corporation is completing Form 1118. For example, if the code entered

Column 13(j). Include other deductions allocable to income from sources outside the United States (dividends, interest, etc.) for the applicable separate category that are not otherwise included in Schedule H.

Include any reduction made in determining foreign source capital gain net income. If capital gain net income from sources outside the United States from all separate categories is more than the capital gain net income reported on the corporation’s tax return, enter a pro rata portion of the excess in each separate category. See Capital Gains, earlier.

In column 13(j), do not include other expenses directly allocable to dividends eligible for the dividends received deduction under section 245A. Such directly allocable expenses may include wire transfer, currency exchange, and similar fees incurred in connection with the payment of dividends eligible for the dividends received deduction under section 245A. These expenses reduce taxable income, but are not taken into account in computing the foreign tax credit limitation. See section 904(b)(4).

Attach a schedule that lists all other deductions included in column 13(j). The schedule should include totals for each line in column 13(j) that has an entry.

12 Instructions for Form 1118 (Rev. 12-2025)

on Schedule H, Part II, line 3a is “PAS,” then enter the amount from line 3a(2), column (f) on the Form 1118 that the corporation is completing for the passive category of income (as indicated on line a at the top of page 1 of Form 1118). The applicable line of Schedule H, Part III, column (g) is the amount on line 2a(2), 2b(2), 2c(2), 2d(2), or 2e(2) of column (g) that corresponds with the category of income for which the corporation is completing Form 1118. For example, if the code entered on Schedule H, Part III, line 2a is “PAS,” then enter the amount from line 2a(2), column (g) on the Form 1118 that the corporation is completing for the passive category of income (as indicated on line a at the top of page 1 of Form 1118).

It is not necessary to report the apportioned expenses on a related-person or per-country basis. Therefore, only enter an amount in the totals line of column 14.

Note: With respect to the apportionment of deductions reported on Schedule H, Part II, the reduction required by section 904(b)(4) in deductions relating to dividends eligible for the dividends received deduction under section 245A is taken into account (for purposes of determining foreign source income or loss in each separate category) by carrying to Schedule A, column 14, only the amounts on Schedule H, Part II, column (f), lines 3a(2), 3b(2), 3c(2), 3d(2), and 3e(2). Likewise, with respect to the apportionment of deductions reported on Schedule H, Part III, the reduction required by section 904(b)(4) in deductions relating to dividends eligible for the dividends received deduction under section 245A is taken into account (for purposes of determining foreign source income or loss in each separate category) by carrying to Schedule A, column 14, only the amounts on Schedule H, Part III, column (g), lines 2a(2), 2b(2), 2c(2), 2d(2), or 2e(2).

Column 15. Enter the corporation’s NOL deduction allowed under section 172 that is attributable to foreign source income in the applicable separate category. If the NOL is part of an overall foreign loss, see Regulations section 1.904(g)-3 for allocation rules that apply in determining the amount to enter in column 15.

It is not necessary to report the NOL deduction on a related-person or per-country basis. Therefore, only enter an amount on the totals line of column 15. See Net operating losses, earlier.