Part I—Investment Company — 2025 Inst 1120-RIC (PDF)

Income

Line 1. Dividends. A RIC that is the holder of record of any share of stock on the record date for a dividend payable on that stock must include the dividend in gross income by the later of the date the share became ex-dividend, or the date the RIC acquired the share.

Line 2. Interest. Enter taxable interest on U.S. obligations and on loans, notes, mortgages, bonds, bank deposits, corporate bonds, tax refunds, etc.

Do not offset interest expense against interest income. Special rules apply to interest income from certain below-market-rate loans. See section 7872 for more information on the tax treatment of loans on which inadequate or no interest is charged.

Report tax-exempt interest income on Schedule K, item 8. Do not include tax-exempt interest on line 2. Also, if required, include the same amount on Schedule M-1, line 7.

Include interest income from tax credit bonds on line 2. If the RIC elects to pass through the credits to shareholders, see the instructions for Part II, Schedule A, line 7.

Line 3. Net foreign currency gain or (loss) from sec- tion 988 transactions. Enter the net foreign currency gain (loss) from section 988 transactions treated as ordinary income or loss under section 988(a)(1)(A). Attach a statement detailing each separate transaction.

Line 4. Payments with respect to securities loans. Enter the amount received or accrued from a broker as compensation for securities loaned by the RIC to the broker for use in completing market transactions. The payments must meet the requirements of section 512(a) (5).

Line 5. Excess of net short-term capital gain over net long-term capital loss. Enter the amount from Schedule D (Form 1120), line 16. Every sale or exchange of a capital asset must be reported even if no gain or loss is indicated.

If a RIC has a net capital loss for any tax year, the excess of the net short-term capital loss over the net long-term capital gain shall be a short-term capital loss arising on the first day of the next tax year. The excess of the net long-term capital loss over the net short-term capital gain shall be a long-term capital loss arising on the first day of the next tax year. Also, there is no limit on the number of tax years that a RIC is allowed to carry over a net capital loss. See section 1212(a)(3) for more information.

Line 7. Other income. Enter any other taxable income (loss) not reported on lines 1 through 6, except net capital gain reported in Part II.

If the RIC owns any controlled foreign corporations or qualified electing funds, enter the amount included in gross income under section 951(a)(1)(A), plus the amount of global intangible low-taxed income determined under

Instructions for Form 1120-RIC (2025) 9

section 951A (which is treated as an amount included under section 951(a)(1)(A)), and any amount included in gross income under section 1293(a). See Regulations section 1.851-2(b)(2)(iii). Do not include in this line any amounts that are treated as dividends and reported on line 1. See Regulations section 1.851-2(b)(2)(i). Refer to Form 5471, Form 8621, and Form 8992, and their instructions, to determine the amount included in gross income under section 951(a)(1)(A) (including the amount of global intangible low-taxed income) and section 1293(a). Also, consider the applicability of section 951A with respect to controlled foreign corporations owned by domestic partnerships in which the RIC has an interest.

List the type and amount of income on an attached statement. If the RIC has only one item of other income, describe it in parentheses on line 7. Examples of other income to report on line 7 include:

Gross rents;
Recoveries of fees or expenses in settlement or litigation;
Amounts received or accrued as consideration for entering into agreements to make real property loans or to purchase or lease real property;
Recoveries of bad debts deducted in prior years under the specific charge-off method;
Refunds of taxes deducted in prior years to the extent they reduced income subject to tax in the year deducted (see section 111). Do not offset current year taxes against prior year tax refunds;
The recapture amount under section 280F if the business use of listed property drops to 50% or less. To figure the recapture amount, complete Part IV of Form 4797;
Ordinary income from trade or business activities of a partnership (from Schedule K-1 (Form 1065)). Do not offset ordinary losses against ordinary income. Instead, include the losses on line 22. Show the partnership’s name, address, and EIN on a separate statement attached to this return. If the amount entered is from more than one partnership, identify the amount from each partnership;
Any net positive section 481 income adjustment due to a change in method of accounting. See Form 3115 and its instructions for more information;
Part or all of the proceeds received from certain corporate-owned life insurance contracts issued after August 17, 2006. Corporations that own one or more employer-owned life insurance contracts issued after this date must file Form 8925, Report of Employer-Owned Life Insurance Contracts. See section 101(j) for details;

The amount of excess distributions from a Section 1291 fund that is treated as ordinary income.

See Form 8621 and the Instructions for Form 8621 for details.

Deductions

Limitations on Deductions

Transactions between related taxpayers. Generally, an accrual basis taxpayer may only deduct business expenses and interest owed to a related party in the year the payment is includible in the income of the related party. See section 267 for limitations on deductions for interest and expenses paid to a related party.

Limitations on business interest expense. Business interest expense may be limited. See section 163(j), Form 8990, and the related instructions. Also, see Limitation on deduction in the instructions for line 13 and Schedule K, Question 14 , later.

Golden parachute payments. A portion of the payments made by a RIC to key personnel that exceeds their usual compensation may not be deductible. This occurs when the RIC has an agreement (golden parachute) with key employees to pay them an amount substantially in excess of their base amount if control of the RIC changes. See section 280G and Regulations section 1.280G-1 for more information. Also, see the instructions for line 9.

If the RIC timely filed its return for the year without making an election, it can still make an election by filing an amended return within 6 months of the due date of the return (excluding extensions). Clearly indicate the election on the amended return and write “Filed pursuant to section 301.9100-2” at the top of the amended return. File the amended return at the same address the RIC filed its original return. The election applies when figuring taxable income for the current tax year and all subsequent years.

Business start-up and organizational costs. A RIC can elect to deduct a limited amount of start-up and organizational costs it paid or incurred. Any remaining costs must generally be amortized over a 180-month period. See sections 195 and 248 and the related regulations.

Time for making an election. The RIC generally elects to deduct start-up or organizational costs by claiming the deduction on its income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. However, for start-up or organizational costs paid or incurred before September 9, 2008, the RIC may be required to attach a statement to its return to elect to deduct such costs. See Regulations sections 1.195-1 and 1.248-1 for details.

For more details, including special rules for costs paid or incurred before September 9, 2008, see the Instructions for Form 4562.

Income from cancellation of debt (COD) from the repurchase of a debt instrument for less than its adjusted issue price;
The RIC’s share of the following income from Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund.

Ordinary earnings of a qualified electing fund (QEF).
Gain or loss from marking passive foreign investment company income (PFIC) stock to market.

The RIC can choose to forgo the elections above by clearly electing to capitalize its start-up or organizational costs on an income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins.

Gain or loss from sale or other disposition of Section 1296 stock.

10 Instructions for Form 1120-RIC (2025)

The election to either amortize or capitalize start-up costs is irrevocable and applies to all start-up costs that are related to the trade or business.

Report the deductible amount of such costs and any amortization on line 22. For amortization that begins during the current tax year, complete and attach Form 4562.

Section 265(a)(3) limitation. If the RIC paid exempt-interest dividends during the tax year (including those dividends deemed paid under section 855), no deduction is allowed for that portion of otherwise deductible expenses allocable to tax-exempt income. The excluded amount is determined by the amount tax-exempt income bears to total gross income (including tax-exempt income but excluding capital gain net income).

Net operating loss deduction. The net operating loss deduction is not allowed.

Passive activity limitations. Limitations on passive activity losses and credits under section 469 apply to RICs that are closely held (as defined in section 469(j)(1)). RICs subject to the passive activity limitations must complete Form 8810, Corporate Passive Activity Loss and Credit Limitations, to compute their allowable passive activity loss and credit. Before completing Form 8810, see Temporary Regulations section 1.163-8T for rules on allocating interest expense among activities.

Closely held corporation. A RIC is closely held if at any time during the last half of the tax year more than 50% in value of its outstanding stock is directly or indirectly owned by, or for, not more than five individuals and it is not a personal service corporation.

Line 9. Compensation of officers. Enter the deductible officer’s compensation on line 9. The RIC determines who is an officer under the laws of the state where incorporated. Do not include compensation deductible elsewhere on the return, such as elective contributions to a section 401(k) cash or deferred arrangement, or amounts contributed under a salary reduction SEP agreement or a SIMPLE IRA plan.

officer’s compensation, elective contributions to a section 401(k) cash or deferred arrangement, or amounts contributed under a salary reduction SEP agreement or a SIMPLE IRA plan.

If the RIC provided taxable fringe benefits to its employees, such as personal use of a car, do not deduct as wages any amounts deducted elsewhere.

If the RIC claims a credit for any wages paid or incurred, it may need to reduce any corresponding deduction for officers’ compensation and salaries and wages. See the instructions for the form used to figure the applicable credit for more details.

Line 11. Rents. If the RIC rented or leased a vehicle, enter the total annual rent or lease expense paid or incurred during the year. Also, complete Part V of Form 4562, Depreciation and Amortization. If the RIC leased a vehicle for a term of 30 days or more, the deduction for the vehicle lease expense may have to be reduced by an amount called the inclusion amount.

The RIC may have an inclusion amount if:

The lease term began: And the vehicle’s FMV on

the first day of the lease

exceeded:

Cars (excluding trucks and vans) After 12/31/23 but before 1/1/26 . . . . . . . . . . $62,000 After 12/31/22 but before 1/1/24 . . . . . . . . . . $60,000 After 12/31/21 but before 1/1/23 . . . . . . . . . . $56,000 After 12/31/20 but before 1/1/22 . . . . . . . . . . $51,000 After 12/31/17 but before 1/1/21 . . . . . . . . . . $50,000 After 12/31/12 but before 1/1/18 . . . . . . . . . . $19,000

Trucks and Vans

After 12/31/23 but before 1/1/26 . . . . . . . . . . $62,000

After 12/31/22 but before 1/1/24 . . . . . . . . . . $60,000

After 12/31/21 but before 1/1/23 . . . . . . . . . . $56,000

After 12/31/20 but before 1/1/22 . . . . . . . . . . $51,000

After 12/31/17 but before 1/1/21 . . . . . . . . . . $50,000

After 12/31/13 but before 1/1/18 . . . . . . . . . . $19,500

After 12/31/09 but before 1/1/14 . . . . . . . . . . $19,000

See Pub. 463, Travel, Gift, and Car Expenses, for instructions on figuring the inclusion amount. The inclusion amount for lease terms beginning in 2026 will be published in the Internal Revenue Bulletin in early 2026.

If the RIC’s total receipts are $500,000 or more, complete and attach Form 1125-E. Total receipts are figured by adding:

Line 12. Taxes and licenses. Enter taxes paid or accrued during the tax year, but do not include the following.

Federal income taxes (except for the tax imposed on net recognized built-in gain allocable to ordinary income).

Line 8, Part I;
Net capital gain from line 1, Part II; and
Line 9a, Form 2438.

Enter on line 9 the amount from Form 1125-E, line 4.

Foreign or U.S. territory income taxes if a foreign tax credit is claimed, or if the RIC made an election under section 853.

Line 10. Salaries and wages. Enter the salaries and wages paid for the tax year reduced by the amount claimed on:

Form 5884, Work Opportunity Credit;
Form 8844, Empowerment Zone Employment Credit;
Form 8932, Credit for Employer Differential Wage Payments; and
Excise taxes imposed under section 4982 on undistributed RIC income.
Taxes not imposed on the RIC.
Taxes, including state or local sales taxes, that are paid or incurred in connection with an acquisition or disposition of property (these taxes must be treated as a part of the cost of the acquired property or, in the case of a disposition, as a reduction in the amount realized on the disposition).
Taxes assessed against local benefits that increase the value of the property assessed (such as for paving, etc.).
Taxes deducted elsewhere on the return. See section 164(d) for information on apportionment of taxes on real property between seller and purchaser.
Form 8994, Employer Credit for Paid Family and Medical Leave.

See the instructions for these forms for more information.

Do not include salaries and wages deductible elsewhere on the return, such as amounts included in

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Line 13. Interest. Do not offset interest income against interest expense.

The RIC must make an interest allocation if the proceeds of a loan were used for more than one purpose (for example, to purchase a portfolio investment and to acquire an interest in a passive activity). See Temporary Regulations section 1.163-8T for the interest allocation rules.

The following interest is not deductible.

Interest on indebtedness incurred or continued to purchase or carry obligations if the interest is wholly exempt from income tax. See section 265(b) for special rules and exceptions for financial institutions. Also, see section 265(b)(7) for a temporary de minimis exception for financial institutions for certain tax-exempt bonds issued in 2009 and 2010.
For cash basis taxpayers, prepaid interest allocable to years following the current tax year. For example, a cash basis calendar year taxpayer who in 2025 prepaid interest allocable to any period after 2025 can deduct only the amount allocable to 2025.

Line 22. Other deductions. Attach a statement listing by type and amount all allowable deductions that are not specifically deductible elsewhere on Form 1120-RIC. Generally, a deduction may not be taken for any amount that is allocable to tax-exempt income. See section 265(b) for exceptions.

Examples of other deductions include:

Amortization. See Form 4562;
Any applicable deduction under section 179D for costs of energy efficient commercial building property placed in service during the tax year. Complete and attach Form 7205;
Certain business start-up and organizational costs the RIC elects to amortize or deduct;
Supplies used and consumed in the business;
Utilities;
Ordinary losses from trade or business activities of a partnership (from Schedule K-1 (Form 1065)). Do not offset ordinary income against ordinary losses. Instead, include the income on line 7. Show the partnership’s name, address, and EIN on a separate statement attached to this return. If the amount is from more than one partnership, identify separately the amount from each partnership;
Interest and carrying charges on straddles. Generally, these amounts must be capitalized. See section 263(g).

Special rules apply to:

Original issue discount (OID) on certain high-yield discount obligations. See section 163(e)(5) to determine the amount of the deduction for OID that is deferred and the amount that is disallowed on a high-yield discount obligation.
Any extraterritorial income exclusion (from Form 8873, line 52); and
The deduction for interest when the RIC is a policyholder or beneficiary with respect to a life insurance, endowment, or annuity contract issued after June 8, 1997. For details, see section 264(f). Attach a statement showing the computation of the deduction.

Limitation on deduction. Under section 163(j), business interest expense is generally limited to the sum of business interest income, 30% of the adjusted taxable income, and floor plan financing interest. Business interest expense includes any interest paid or accrued properly allocable to a trade or business (other than certain excepted trades or businesses). A small business taxpayer that is not a tax shelter (as defined in section 448(d)(3)), and that meets the gross receipts test, is not required to limit business interest expense under section 163(j). A taxpayer meets the gross receipts test if the taxpayer has average annual gross receipts of not more than $31 million for the 3 prior tax years under the gross receipts test of section 448(c). Gross receipts include the aggregate gross receipts from all persons treated as a single employer such as a controlled group of corporations, commonly controlled partnerships or proprietorships, and affiliated service groups. If the corporation fails to meet the gross receipts test, Form 8990 is generally required. See the Instructions for Form 8990. Also, see Schedule K, Question 13 and Question 14 for conditions for filing Form 8990.

Any net negative section 481(a) adjustment. Do not deduct expenses such as the following.
Fines or penalties paid to a government for violating any law. However, other limitations apply for certain amounts paid or incurred after December 21, 2017. See section 162(f), and Fines and penalties , later.
Lobbying expenses. However, see Lobbying expenses, later.

RICs reporting taxable income on the accrual method may elect to treat as paid during the tax year any contributions paid by the due date of the RIC’s tax return (not including extensions) if the contributions were authorized by the board of directors during the tax year. Attach a declaration to the return stating that the resolution authorizing the contributions was adopted by the board of directors during the tax year. The declaration must include the date the resolution was adopted. See section 170(a)(2)(B).

Limitation on deduction. Generally, the total amount claimed cannot be more than 10% of taxable income (the sum of Part I, line 26; Part ll, line 3; and Form 2438, line 11) computed without regard to the following:

Amounts paid or incurred after December 22, 2017, for any settlement or payment related to sexual harassment or sexual abuse, if such settlement or payment is subject to a nondisclosure agreement or for related attorney’s fees. See new section 162(q).

Charitable contributions. Enter contributions or gifts actually paid within the tax year to or for the use of charitable and governmental organizations described in section 170(c) and any unused contribution carryovers.

Line 14. Depreciation. Include on line 14 depreciation and the cost of certain property that the RIC elected to expense under section 179. See Form 4562 and the related instructions to figure the amount of depreciation to enter on this line.

Any deduction for contributions; or
The deduction allowed under section 249, related to any premium paid or incurred upon the repurchase of a convertible bond.

12 Instructions for Form 1120-RIC (2025)

Carryover. Charitable contributions over the 10% limitation cannot be deducted for the tax year but may be carried over to the next 5 tax years subject to certain limitations.

For more information on charitable contributions, including substantiation and recordkeeping requirements, see the regulations under section 170 and Pub. 526, Charitable Contributions.

Contributions to organizations conducting lobbying activities. Contributions made to an organization that conducts lobbying activities are not deductible if:

The lobbying activities relate to matters of direct financial interest to the donor’s trade or business, and
The principal purpose of the contribution was to avoid federal income tax by obtaining a deduction for activities that would have been nondeductible under the lobbying expense rules if conducted directly by the donor.

For information on contributions to charitable organizations that conduct lobbying activities, see section 170(f)(9).

Pension, profit-sharing, etc., plans. Enter contributions to qualified pension, profit-sharing, or other funded-deferred compensation plans. Employers who maintain such a plan must generally file Form 5500, Annual Return/Report of Employee Benefit Plan, even if the plan is not a qualified plan under the Internal Revenue Code. The filing requirement applies even if the RIC does not claim a deduction for the current tax year. There are penalties for failure to file these forms on time and for overstating the pension plan deduction. See sections 6652(e) and 6662(f).

Note: Form 5500 must be filed electronically under the computerized ERISA Filing Acceptance System (EFAST2). For more information, see the EFAST2 website at www.EFAST.dol.gov .

Travel, meals, and entertainment. Subject to certain limitations and restrictions, the RIC can deduct ordinary and necessary travel, meal, and non-entertainment expenses paid or incurred in its trade or business.

Generally, entertainment expenses, membership dues, and facilities used in connection with these activities cannot be deducted. In addition, no deduction is generally allowed for qualified transportation fringe benefits. Also, special rules apply to deductions for gifts, luxury water travel, and convention expenses. See section 274 and Pub. 463 for more details.

Meals must not be lavish or extravagant, and
An employee of the RIC must be present at the meal. See section 274(n)(3) for a special rule that applies to expenses for meals consumed by individuals subject to the hours of service limits of the Department of Transportation.

Qualified transportation fringes (QTFs). Generally, no deduction is allowed under section 274(a)(4) for QTFs provided by employers to their employees. QTFs are defined in section 132(f)(1) and include:

Transportation in a commuter highway vehicle between the employee’s residence and place of employment,
Any transit pass, and
Qualified parking. See section 274 and Pub. 15-B, Employer’s Tax Guide to Fringe Benefits, for details.

Membership dues. The RIC can deduct amounts paid or incurred for membership dues in civic or public service organizations, professional organizations (such as bar or medical associations), business leagues, trade associations, chambers of commerce, boards of trade, and real estate boards. However, no deduction is allowed if a principal purpose of the organization is to entertain or provide entertainment facilities to members or their guests. In addition, RICs cannot deduct membership dues in any club organized for business, pleasure, recreation, or other social purpose. This includes country clubs, golf and athletic clubs, airline and hotel clubs, and clubs operated to provide meals under conditions favorable to business.

Entertainment facilities. Generally, the RIC cannot deduct an expense paid or incurred for a facility (such as a yacht or hunting lodge) used for an activity usually considered entertainment, amusement, or recreation.

Amounts treated as compensation. Generally, the RIC may be able to deduct otherwise nondeductible entertainment, amusement, or recreation expenses if the amounts are treated as compensation to the recipient and reported on Form W-2 for an employee, or on Form 1099-NEC for an independent contractor. However, if the recipient is an officer, director, beneficial owner (directly or indirectly), or other “specified individual” (as defined in section 274(e)(2)(B) and Regulations section 1.274-9(b)), special rules apply.

See section 274 and Pub. 463 for a more extensive discussion of these topics.

Fines and penalties. Generally, no deduction is allowed for fines or similar penalties paid or incurred to, or at the direction of, a government or governmental entity for violating any law, or for the investigation or inquiry into the potential violation of a law, except:

Travel. The RIC cannot deduct travel expenses of any individual accompanying a corporate officer or employee unless:

That individual is an employee of the RIC, and
That individual’s travel is for a bona fide business purpose that would otherwise be deductible by that individual.

Meals. Generally, the RIC can deduct only 50% of the amount otherwise allowable for non-entertainment related meal expenses paid or incurred in its trade or business.

Meals not separately stated from entertainment are generally not deductible. In addition (subject to exceptions under section 274(k)(2)):

Amounts that constitute restitution,
Amounts paid to come into compliance with the law,
Amounts paid or incurred as the result of certain court orders or agreements in which no government or governmental entity is a party, and
Amounts paid or incurred for taxes due. No deduction is allowed unless the amounts are specifically identified in the order or agreement and the RIC establishes that the amounts were paid for that purpose. Also, any amount paid or incurred as reimbursement to the government for the costs of any

Instructions for Form 1120-RIC (2025) 13

investigation or litigation are not eligible for the exceptions and are nondeductible.

See section 162(f).

Lobbying expenses. Generally, lobbying expenses are not deductible. Examples of nondeductible expenses include:

Amounts paid or incurred in connection with influencing federal, state, or local legislation; or
Amounts paid or incurred in connection with any communication with certain federal executive branch officials in an attempt to influence the official actions or positions of the officials. See Regulations section 1.162-29 for the definition of “influencing legislation.” Dues and other similar amounts paid to certain tax-exempt organizations may not be deductible. Certain in-house lobbying expenditures that do not exceed $2,000 are deductible.

Line 25a. Deduction for dividends paid. Enter the amount from Schedule A, line 8a.

Line 25b. Section 851(d)(2) and section 851(i) deduc- tions. Enter the amount from Schedule J, lines 1c and 1d.

Tax and Payments

Line 28b. Current year’s estimated tax payments. Enter any estimated tax payments the RIC made for the current tax year.

Line 28e. Credit from Form 2439. Enter the credit from Form 2439 for the RIC’s share of the tax paid by another RIC or a Real Estate Investment Trust (REIT) on undistributed long-term capital gains included in the RIC’s income. Attach Form 2439 to Form 1120-RIC.

Line 28f. Credit for federal tax on fuels. Complete and attach Form 4136, Credit for Federal Tax Paid on Fuels, if the RIC qualifies to take this credit.

Line 28g. Elective payment election amount from Form 3800. Enter on line 28g the total net elective payment election amount from Form 3800, General Business Credit, Part III, line 6, column (j). See the Instructions for Form 3800.

its tax liability is $500 or more and it did not timely pay at least the smaller of:

Its tax liability for the current year, or
Its prior year’s tax. Use Form 2220, Underpayment of Estimated Tax by Corporations, to see if the RIC owes a penalty and to figure the amount of the penalty. See the Instructions for Form 2220 for more information.

Line 33a. Credited to estimated tax. The RIC can elect to apply all or part of the RIC’s overpayment to next year’s estimated taxes.

If Form 2220 is attached, check the box on this line and enter the amount of any penalty.

Line 31. Amount owed. Generally, the RIC must pay any tax due in full no later than the due date for filing its tax return (excluding extensions). Payment of the tax due must be made electronically. See Electronic Deposit Requirement, earlier, for the payment options for the RIC. Also, go to IRS.gov/Payments for more detailed information.

If the RIC cannot pay the full amount of tax owed, it can apply for an installment agreement online. The RIC can apply for an installment agreement online if:

It cannot pay the full amount shown on line 31,
The total amount owed is $25,000 or less, and
The RIC can pay the liability in full in 24 months. To apply using the Online Payment Agreement Application, go to IRS.gov/OPA .

Under an installment agreement, the RIC can pay what it owes in monthly installments. There are certain conditions that must be met to enter into and maintain an installment agreement, such as paying the liability within 24 months and making all required deposits and timely filing tax returns during the length of the agreement.

If the installment agreement is accepted, the RIC will be charged a fee and it will be subject to penalties and interest on the amount of tax not paid by the due date of the return.

Line 32. Overpayment. If there is an overpayment on line 32, enter the amount the RIC wants refunded on line 33b. See the instructions for line 33b, later. The RIC can also choose to have all or part of the overpayment credited to next year’s estimated tax by completing line 33a. See the instructions for line 33a, next.

Line 28z. Other credits and payments—attach state- ment. Include on line 28z any other refundable credit the RIC is claiming, including the following. Attach a statement listing the type of credit or payment and the amount of the credit or payment.

Credit under section 1341 for repayments of amounts included in income from earlier years.

Enter the amount of any overpayment from line 32 that should be applied to next year’s estimated tax.

Backup withholding. If the cooperative had federal income tax withheld from any payments it received because, for example, it failed to give the payer its correct EIN, include the amount withheld in the total for line 28z.

Line 29. Total payments and credits. Combine lines 28a through 28z and enter the total on line 29.

Line 30. Estimated tax penalty. A RIC that does not make estimated tax payments when due may be subject to an underpayment penalty for the period of underpayment. Generally, a RIC is subject to the penalty if

This election to apply some or all of the overpayment amount to the RIC’s 2026 estimated tax cannot be changed at a later date.

Line 33b. Refunded. Enter the amount to be refunded to the RIC on line 33b. If the RIC has access to U.S. banking services, it should use direct deposit for any refunds, whenever possible. The benefits of a direct deposit include a faster refund, the added security of a paperless payment, and the savings of tax dollars associated with the reduced processing costs.

Direct deposit of refund. If the RIC wants its refund directly deposited into its checking or savings account at any U.S. bank or other financial institution, complete lines

14 Instructions for Form 1120-RIC (2025)

33c through 33e. See the instructions for lines 33c, 33d, and 33e, later.

The RIC is not eligible to request a direct deposit if:

The receiving financial institution is a foreign bank or a foreign branch of a U.S. bank, or
The RIC has applied for an EIN but is filing its tax return before receiving one.

Line 33c. Routing number. The routing number must be nine digits. The first two digits must be between 01 and 12 or 21 through 32. Ask the RIC’s financial institution for the correct routing number to enter on line 33c if:

The routing number on a deposit slip is different from the routing number on the RIC’s checks,
The deposit is to a savings account that does not allow the RIC to write checks, or
The RIC’s checks state they are payable through a financial institution different from the one at which the RIC has its checking account.

Line 33d. Type of account. Check the appropriate box for the type of account. Don’t check more than one box. The RIC must check the correct box to ensure the deposit is accepted.

Line 33e. Account number. The account number can be up to 17 characters (both numbers and letters). Include hyphens but omit spaces and special symbols. Enter the number from left to right and leave any unused boxes blank. Don’t include the check number.

If the direct deposit to the RIC’s account is different from the amount it expected, the RIC will receive an explanation in the mail about 2 weeks after the refund is deposited.

Conditions resulting in a refund by check. If the IRS is unable to process the request for a direct deposit, a refund by check will be generated instead. Reasons for not processing a request include.

The name of the RIC on the tax return does not match the name on the account.
The financial institution rejects the direct deposit because of an incorrect routing or account number.
The RIC fails to indicate the type of account the deposit is to be made to (that is, checking or savings).

Note: The IRS isn’t responsible for a lost refund if the RIC enters the wrong account information. Check with the RIC’s financial institution to get the correct routing and account numbers and to make sure the direct deposit will be accepted.