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Official form guide
Form 1118S1: 1118 (Schedule I)
IRS Form 1118 Schedule I is used by corporations to compute the reduction of foreign oil and gas taxes under section 907(a). It must be attached to Form 1118. The highest rate of tax under section 11(b) is 21%.
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IRS Form 1118S1 - 1118 (Schedule I)
IRS Form 1118 Schedule I is used by corporations to compute the reduction of foreign oil and gas taxes under section 907(a). It must be attached to Form 1118. The highest rate of tax under section 11(b) is 21%.
Risk Radar
Scan points- 1Using wrong separate category code for the income.
- 2Entering incorrect separate category code on line a.
- 3Failing to enter country code for sanctioned or treaty country on line b or c.
- 4Including dividend or interest income that is passive income in Part I.
- 5Not attaching a schedule for carryover computation in Part III.
Plain English
This form helps corporations figure out how much of their foreign oil and gas taxes they can actually claim as a credit. It reduces the credit for taxes on combined foreign oil and gas income. You attach it to your main foreign tax credit form (Form 1118).
Submission Date
- Filing date: 2021-12-21 22:13:24
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when a corporation claims a foreign tax credit for income taxes on combined foreign oil and gas income and needs to compute the reduction under section 907(a).
- Do not use it when the corporation has no combined foreign oil and gas income or is not claiming a foreign tax credit for such income.
- Check Form 1118 instead when the corporation is not required to attach Schedule I because the reduction under section 907(a) does not apply.
Form selector
Use this form or another form?
Corporation claims credit for income taxes on combined foreign oil and gas income
The amount of taxes eligible for credit may be reduced under section 907(a).
✓ Confirm you are attaching Schedule I to the corresponding Form 1118.
Corporation has carryover of foreign oil and gas taxes to current year
The carryover amount is entered on Part III line 2 and included on Schedule B, Part II, line 5.
✓ Attach a schedule showing computation in detail.
Corporation has section 863(b) income from foreign oil and gas
Special rules apply: leave column 1(a) blank, enter '863(b)' in column 1(b), use a single line.
✓ Verify the two-letter country code is replaced with '863(b)'.
Deadline or filing window
Not stated in the official source. The form is filed with Form 1118, which is due by the 15th day of the 4th month after the end of the corporation's tax year. Extensions may apply.
Checklist
What you need before filling it out
Part I column 1(a) EIN or Reference ID number
EIN or reference ID · IRS records or prior correspondence
Part I column 1(b) Foreign country code
Two-letter country code from www.irs.gov/CountryCodes · IRS country codes list
Part I column 2 Gross foreign oil and gas extraction income
Income from extraction or sale of assets used in extraction outside US · Financial records
Part I column 3 Gross foreign oil related income
Income from processing minerals into primary products · Financial records
Part I column 10 Taxable income
Column 6 minus column 9 · Computed from form
Part II line 2 Multiply by highest rate of tax under section 11(b)
Current rate (21% as of print) · Instructions
Part III line 2 Carryover of foreign oil and gas tax
Schedule showing computation · Attached schedule similar to Schedule K
Before you submit
- 1Confirm the revision date on the form is Rev. December 2021.
- 2Verify the corporation's name and EIN are entered at the top.
- 3Enter the correct separate category code on line a, matching the Form 1118.
- 4If applicable, enter the country code for sanctioned country on line b or treaty country on line c.
- 5Complete Part I columns 1-13, ensuring all amounts are in U.S. dollars.
- 6Attach a schedule showing how foreign taxes in columns 11 and 12 were figured.
- 7Compute Part II line 1 correctly, subtracting any recapture under section 907(c)(4).
- 8Multiply Part II line 1 by 21% (highest rate under section 11(b)).
- 9Enter the reduction from Part II line 4 on Schedule G, line B of the corresponding Form 1118.
- 10For Part III, if line 1 is zero or less, do not complete Part III.
- 11Attach a detailed schedule for any carryover entered on Part III line 2.
- 12Enter the smaller of Part III lines 1 and 2 on Schedule B, Part II, line 5.
How to file this form
- 1Obtain the current revision of Schedule I (Form 1118) from www.irs.gov/Form1118.
- 2Enter the corporation's name and EIN at the top.
- 3Enter the separate category code from the attached Form 1118 on line a.
- 4Complete Part I using the rules in section 907(c) and the instructions, reporting all amounts in U.S. dollars.
- 5Compute Part II to determine the reduction under section 907(a).
- 6Compute Part III if applicable, using any carryover of foreign oil and gas taxes.
- 7Attach Schedule I to Form 1118 and enter the reduction on Schedule G, line B.
- 8Keep a copy of the completed Schedule I and all supporting schedules for your records.
Known limitations
- 1Do not include any dividend or interest income that is passive income in Part I.
- 2Do not include interest income paid by a foreign subsidiary out of foreign oil and gas extraction income of the payor, even if it is not passive income.
- 3Special rules apply to carryback and carryover of foreign taxes on combined foreign oil and gas income; section 907(f) applies before section 904(c).
- 4The form is only for corporations; not for individuals or other entities.
- 5The reduction applies only to taxes on combined foreign oil and gas income; other foreign taxes are not subject to this schedule.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is Revision December 2021. The IRS directs filers to www.irs.gov/Form1118 for the latest information; no changes from prior edition are noted in the source.
What changed or needs a fresh check
- Edition date — confirm the revision date reads 'Rev. December 2021'.
- Fee — no fee is required to file Schedule I; it is an attachment to Form 1118.
- Mailing address — not stated in the official source — verify on the agency site.
- Signature — the form does not have a signature line; it is attached to Form 1118 which requires signature.
- OMB No. — confirm OMB No. 1545-0123 is printed on the form.
- Paperwork Reduction Act — see Instructions for Form 1118 for notice.
Quick Facts
Downloads
After you file
- 1Retain a copy of the filed Schedule I and all attached schedules for at least 3 years after the due date of the return.
- 2If an error is discovered after filing, file an amended Form 1118 with a corrected Schedule I.
- 3Monitor for any IRS notice regarding the foreign tax credit reduction.
- 4If the corporation has carryovers, maintain records of the computation for future years.
- 5Confirm that the reduction amount was correctly entered on Schedule G of Form 1118.
Sources
- SRCForm p.1 — The form title and revision date are 'Schedule I (Form 1118) (Rev. December 2021)'.
- SRCForm p.1 — OMB No. 1545-0123 is printed.
- SRCForm p.2 — Who Must File: corporations claiming credit for taxes on combined foreign oil and gas income.
- SRCForm p.2 — Highest rate of tax under section 11(b) is 21%.
- SRCForm p.2 — Do not include passive dividend or interest income.
- SRCForm p.2 — Part III line 2 requires attached schedule for carryover.
- SRCForm p.2 — Reduction entered on Schedule G, line B.
- SRCForm p.2 — Part III line 3 entered on Schedule B, Part II, line 5.
- SRCForm p.2 — Special rules for carryback/carryover under section 907(f).
- SRCForm p.2 — Report all amounts in U.S. dollars.
Common confusion points
Do I need to file Schedule I if I have no foreign oil and gas income?
The form is only for those claiming credit on such income.
→ Review section 907(c) to determine if you have combined foreign oil and gas income.
What code do I enter in column 1(b) for section 863(b) income?
The instructions say to enter '863(b)' instead of a two-letter code.
→ If the income is sourced under section 863(b), enter '863(b)' in column 1(b).
How do I handle a taxable loss from one country?
Part I column 10 totals require offsetting losses against income from other countries.
→ When totaling column 10, subtract losses from income across countries.
What is the highest rate of tax under section 11(b)?
The rate may change; at time of printing it was 21%.
→ Verify current rate from IRS website or instructions.
Do I need to attach a schedule for foreign taxes paid?
Columns 11 and 12 require an attached schedule.
→ Attach a schedule showing how foreign taxes were figured.
Can I include interest income from a foreign subsidiary?
The instructions say do not include interest income paid by a foreign subsidiary out of extraction income, even if not passive.
→ Exclude such interest from columns 2 and 3.
What if I have a carryover of foreign oil and gas tax?
Part III line 2 requires entering the sum of carryover.
→ Attach a schedule similar to Schedule K (Form 1118) showing the computation.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Form 1118-X — amended foreign tax credit return (if needed).
Questions about IRS Form 1118S1
What is IRS Form 1118S1 used for?
This form helps corporations figure out how much of their foreign oil and gas taxes they can actually claim as a credit. It reduces the credit for taxes on combined foreign oil and gas income. You attach it to your main foreign tax credit form (Form 1118).
Who must file IRS Form 1118S1?
Corporations that claim a credit for income taxes paid, accrued, or deemed paid on combined foreign oil and gas income must file Schedule I (Form 1118) to determine the reduction under section 907(a).
What information does IRS Form 1118S1 require?
The form collects information on combined foreign oil and gas income in Part I, computes the reduction under section 907(a) in Part II, and reports carryover of foreign oil and gas taxes in Part III. It requires separate category codes and country codes.
How do I complete IRS Form 1118S1?
First, enter the separate category code and country codes at the top. Complete Part I by reporting income, deductions, and taxes for each country. Then compute the reduction in Part II using the 21% rate. Finally, enter any carryover in Part III and attach a supporting schedule.
What happens if IRS Form 1118S1 is filed incorrectly?
Incorrect completion may result in an erroneous foreign tax credit reduction, potentially leading to underpayment of tax and associated penalties.
Do I need to file Schedule I if I have no foreign oil and gas income?
The form is only for those claiming credit on such income. Review section 907(c) to determine if you have combined foreign oil and gas income.
What code do I enter in column 1(b) for section 863(b) income?
The instructions say to enter '863(b)' instead of a two-letter code. If the income is sourced under section 863(b), enter '863(b)' in column 1(b).
How do I handle a taxable loss from one country?
Part I column 10 totals require offsetting losses against income from other countries. When totaling column 10, subtract losses from income across countries.
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