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Form 1120SK2: 1120-S (Schedule K-2)
IRS Form 1120-S Schedule K-2 is used by S corporations to report shareholders' pro rata share items of international income, deductions, and credits. It must be attached to Form 1120-S and includes parts for foreign tax credit limitation and Form 1116 preparation. The form has seven parts covering various international tax items.
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IRS Form 1120SK2 - 1120-S (Schedule K-2)
IRS Form 1120-S Schedule K-2 is used by S corporations to report shareholders' pro rata share items of international income, deductions, and credits. It must be attached to Form 1120-S and includes parts for foreign tax credit limitation and Form 1116 preparation. The form has seven parts covering various international tax items.
Risk Radar
Scan points- 1Failing to check all applicable parts in box A for international items.
- 2Not checking box A for Part I when gain on personal property sale applies.
- 3Omitting Part II Section 1 for interest income from foreign sources.
- 4Failing to enter SIC codes in Part III Section 1 for R&E expenses.
- 5Not reporting foreign tax redeterminations in Part III Section 3.
Plain English
This form tells each shareholder of an S corporation their share of foreign income, taxes, and credits. It helps shareholders figure out their foreign tax credit on their personal tax return. The form has several parts that cover different international tax items, like foreign tax credit limits and research expenses.
Submission Date
- Filing date: 2026-01-09 16:10:40
- 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 the S corporation has international income, deductions, or credits to report to shareholders as pro rata share items.
- Do not use it when the corporation is not an S corporation or when no international items are required to be reported on Schedule K-2.
- Check Form 1116 instead when the shareholder is an individual taxpayer computing the foreign tax credit limitation.
Form selector
Use this form or another form?
Shareholder needs to compute foreign tax credit
Used by individual shareholders to claim the credit
✓ Confirm shareholder is an individual
Corporation has foreign disregarded entity
Required to report information on foreign disregarded entities
✓ Check if entity qualifies as disregarded
Corporation owns foreign corporation
Required for certain U.S. persons who are officers, directors, or shareholders in foreign corporations
✓ Determine if ownership threshold met
Deadline or filing window
The official source does not specify a filing deadline for Schedule K-2. It is attached to Form 1120-S, which has its own due date. No extension information is provided in the source.
Checklist
What you need before filling it out
Part I checkboxes
Supporting documents for checked items · Attachments as specified
Part II, line 1 Sales
Gross income amounts by category · Corporation's books and records
Part III, Section 3 Foreign Taxes
Foreign tax payment documents · Foreign tax returns or receipts
Part II, line 24 Total gross income
Sum of lines 1-23 · Calculations
Corporation name and EIN
Exact legal name and EIN · IRS correspondence
Part I, box for Form 8858
Form 8858 completed · Separate filing
Before you submit
- 1Check that the corporation name and EIN on Schedule K-2 match Form 1120-S.
- 2Verify that Part I checkboxes are marked 'Yes' only if the corresponding part is completed and attached.
- 3Confirm that all required parts (I through VII) that apply are completed and attached.
- 4Ensure that Part II Section 1 gross income lines are totaled correctly on line 24.
- 5Check that Part III Section 3 foreign taxes are properly categorized by income category.
- 6Attach any additional forms indicated in Part I checkboxes (e.g., Form 8858, Form 5471).
- 7If this is an amended return, check box B 'Amended K-2' on page 1.
- 8Review that all amounts are in U.S. dollars and properly translated if foreign currency.
- 9Keep a copy of the completed Schedule K-2 with the corporation's records.
- 10Attach Schedule K-2 to Form 1120-S before filing.
How to file this form
- 1Complete the corporation's name and EIN at the top of Schedule K-2.
- 2Indicate which parts (I-VII) apply by checking 'Yes' or 'No' in Part A on page 1.
- 3If this is an amended return, check box B 'Amended K-2'.
- 4Complete Part I by checking any additional specified attachments that apply.
- 5Complete Part II Section 1 by reporting gross income in the appropriate categories.
- 6Complete Part III Section 3 by reporting foreign taxes and any redeterminations.
- 7Attach any required supporting forms and statements as indicated in Part I.
- 8Attach Schedule K-2 to Form 1120-S and file with the IRS.
Known limitations
- 1This schedule is only for use by S corporations filing Form 1120-S.
- 2It is not to be filed separately; it must be attached to Form 1120-S.
- 3It only covers international items; domestic items are reported on Schedule K-1.
- 4The form does not include a signature line; the signature on Form 1120-S covers this schedule.
- 5Part II is for foreign tax credit limitation; if no foreign tax credit is claimed, Part II may not apply.
Field map
Compact field-by-field guide
Entity Info
2 items
Full legal name of the corporation and its Employer Identification Number.
Current mailing address and date of incorporation.
Income
3 items
Total revenue from business operations before deducting costs.
Direct costs attributable to producing goods sold by the corporation.
Gross receipts minus cost of goods sold and returns/allowances.
Deductions
1 items
Sum of all business expenses including compensation, rent, interest, taxes, and depreciation.
Tax
2 items
Total income minus total deductions.
Tax calculated on taxable income using the applicable corporate tax rate, minus any credits.
Signatures
1 items
An authorized corporate officer must sign and date the return.
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Fillable formOpen in Editor->The current edition is 2025 (revision date 2025). The form directs filers to www.irs.gov/Form1120S for instructions and the latest information. No changes from prior edition are noted in the source.
What changed or needs a fresh check
- Edition date — confirm the form revision is 2025 (printed at bottom of each page).
- OMB No. — verify OMB No. 1545-0123 is present on page 1.
- Fee — Not stated in the official source — verify on the agency site.
- 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 1120-S which requires signature.
- Attachments — confirm all required parts (I-VII) are completed if indicated in checkbox A on page 1.
Quick Facts
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After you file
- 1Retain a copy of the filed Schedule K-2 with the corporation's records for at least 3 years.
- 2Provide a copy of Schedule K-2 to each shareholder as part of their Schedule K-1 information.
- 3If an error is discovered after filing, file an amended Form 1120-S with a corrected Schedule K-2 and check box B 'Amended K-2'.
- 4Monitor for any IRS notices regarding the foreign tax credit or other international items reported.
- 5Keep supporting documentation for foreign taxes and income in case of an audit.
- 6If the corporation later receives a foreign tax redetermination, report it on a future Schedule K-2 or amended return.
Sources
- SRCForm p.1 — The form title is 'SCHEDULE K-2 (Form 1120-S) Shareholders’ Pro Rata Share Items—International'.
- SRCForm p.1 — The form must be attached to Form 1120-S.
- SRCForm p.1 — OMB No. 1545-0123.
- SRCForm p.1 — The form has seven parts (I-VII) indicated by checkboxes.
- SRCForm p.1 — Part I includes checkboxes for additional specified attachments such as Form 8858 and Form 5471.
- SRCForm p.2-3 — Part II Section 1 lists various types of gross income with columns for U.S. and foreign source.
- SRCForm p.7 — Part III Section 3 is for foreign taxes, including direct taxes and redeterminations.
- SRCForm p.1 — The form directs to www.irs.gov/Form1120S for instructions and latest information.
- SRCForm p.1 — Revision date is 2025 (printed at bottom).
- SRCForm p.1 — There is a checkbox for 'Amended K-2'.
Common confusion points
When to check 'Yes' for Part I?
The form does not provide clear criteria; instructions are separate.
→ Refer to the Instructions for Form 1120-S for guidance on each checkbox.
How to categorize income in Part II?
The categories (foreign branch, passive, general) can be confusing.
→ Review the definitions in the instructions for Form 1116.
What to do if no foreign taxes?
The form still requires Part III if other international items apply.
→ Check if any Part I boxes apply; if none, Part III may be omitted.
How to report foreign tax redeterminations?
The form has lines for related tax year and date paid.
→ Ensure the redetermination is properly documented and attached.
What if the corporation has no international items?
The form should not be filed at all.
→ Only file Schedule K-2 if there are international items to report.
How to handle multiple shareholders?
The form reports aggregate amounts; each shareholder gets a share.
→ Ensure allocation methods are consistent with S corporation rules.
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Questions about IRS Form 1120SK2
What is IRS Form 1120SK2 used for?
This form tells each shareholder of an S corporation their share of foreign income, taxes, and credits. It helps shareholders figure out their foreign tax credit on their personal tax return. The form has several parts that cover different international tax items, like foreign tax credit limits and research expenses.
Who must file IRS Form 1120SK2?
S corporations that have any international items must file Schedule K-2 with their Form 1120-S. This includes items such as foreign income, foreign taxes, or shareholders with foreign tax credits.
What information does IRS Form 1120SK2 require?
The form collects information on shareholders' pro rata share of international items. Part I identifies additional international information attachments; Part II reports foreign tax credit limitation details; Part III provides information for preparing Form 1116, including R&E and interest expense apportionment factors and foreign taxes.
How do I complete IRS Form 1120SK2?
First, complete box A to indicate which parts of Schedule K-2 apply. Then fill out each applicable part: Part I for additional international information, Part II for foreign tax credit limitation, and Part III for Form 1116 preparation. Attach the completed schedule to Form 1120-S.
When to check 'Yes' for Part I?
The form does not provide clear criteria; instructions are separate. Refer to the Instructions for Form 1120-S for guidance on each checkbox.
How to categorize income in Part II?
The categories (foreign branch, passive, general) can be confusing. Review the definitions in the instructions for Form 1116.
What to do if no foreign taxes?
The form still requires Part III if other international items apply. Check if any Part I boxes apply; if none, Part III may be omitted.
How to report foreign tax redeterminations?
The form has lines for related tax year and date paid. Ensure the redetermination is properly documented and attached.
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