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Form 8404: Interest Charge on DISC-Related Deferred Tax Liability
IRS Form 8404 is used by shareholders of Interest Charge Domestic International Sales Corporations (IC-DISCs) to report their interest owed on DISC-related deferred tax liability; the interest charge must be paid by the due date of your federal income tax return.
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IRS Form 8404 - Interest Charge on DISC-Related Deferred Tax Liability
IRS Form 8404 is used by shareholders of Interest Charge Domestic International Sales Corporations (IC-DISCs) to report their interest owed on DISC-related deferred tax liability; the interest charge must be paid by the due date of your federal income tax return.
Risk Radar
Scan points- 1Do not file if Line 4 (the combined taxable income/loss amount) is zero or less.
- 2Failing to file if Line 4 equals zero or less.
- 3Not including all IC-DISCs when multiple report income.
- 4Entering the wrong identifying number for the Shareholder in Item B.
- 5Using a tax year date different from what is on your return.
Plain English
This form calculates and reports the amount of interest a shareholder owes because of deferred taxes related to an IC-DISC. If you are a shareholder, you use this form to tell the IRS how much interest is due based on that deferred liability. This ensures the correct interest charge is paid with your return.
Submission Date
- Filing date: 2026-01-12 17:10:44
- 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 you are a shareholder of an Interest Charge Domestic International Sales Corporation (IC-DISC) or former IC-DISC, the IC-DISC reports deferred DISC income to you on line 10, Part III, of Schedule K (Form 1120-IC-DISC), and including that income would increase your taxable income.
- Do not use this form when you are a shareholder but the addition of the reported DISC income would result in no change or a decrease to your taxable income.
- Check Form 1120-IC-DISC instead when the IC-DISC reports deferred DISC income to you on line 10, Part III, of Schedule K.
Form selector
Use this form or another form?
Shareholder is a Corporation
The corporation must file this form separately from its income tax return.
✓ Check the applicable box in Item A.
Income reported from multiple IC-DISCs
You must enter each IC-DISC’s identifying number in Item C and name in Item E (or attach a statement).
✓ Ensure all related entries are complete before proceeding to Line 2.
Interest charge is not paid by the due date
Interest, compounded daily at the rate specified under section 6621, will be imposed on unpaid interest.
✓ Verify payment method and date against your tax return deadline.
Deadline or filing window
The deadline for filing Form 8404 is tied directly to your federal income tax return due date. For a specific example, if the IC-DISC’s tax year ends July 31, 2026, the form must be filed on or before November 16, 2026 (which is 3 1/2 months after that tax year end).
Checklist
What you need before filling it out
Shareholder's identifying number
Your SSN (if Individual) or EIN (if other filer) · Item B, Page 1/2
IC-DISC’s identifying number
The number from Schedule K (Form 1120-IC-DISC) · Item C, Page 1/2
Taxable income or loss
Your actual or estimated taxable income/loss · Line 1, Page 1
Due Date for Payment
The date your federal income tax is required to be paid · General Instructions, Page 1
Payment Method Recommendation
Electronic payment options are recommended by the IRS · Section references, Page 1
Before you submit
- 1Check that you have checked the appropriate box in Item A to show your type of taxpayer.
- 2Confirm you have accurately entered your Shareholder’s identifying number in Item B.
- 3Verify that the IC-DISC's identifying number is correctly listed in Item C.
- 4Ensure the Tax year entered in Item D matches the tax year for which the interest charge is required.
- 5Confirm Line 1 reflects your actual or estimated taxable income/loss.
- 6Check that you have signed and dated the return under penalties of perjury.
- 7Verify that all necessary preparer information (Name, Signature, Date) is completed.
How to file this form
- 1Complete Item A through Item D by filling in your shareholder details, IC-DISC number, and tax year.
- 2Enter the actual or estimated taxable income/loss on Line 1.
- 3Calculate and record the required interest charge on Line 9 (this value is derived from other calculations not detailed here).
- 4Pay the total interest charge shown on Line 9 by your federal income tax due date, preferably electronically.
- 5Sign and date the return under penalties of perjury.
- 6File Form 8404 separately from your main income tax return.
Known limitations
- 1The form applies to shareholders of an Interest Charge Domestic International Sales Corporation (IC-DISC) or a former IC-DISC.
- 2Filing is required only if the IC-DISC reports deferred DISC income to the shareholder on line 10, Part III, of Schedule K (Form 1120-IC-DISC).
- 3The interest charge must result in increased taxable income when included on the filer's tax return for the specific tax year.
- 4For corporations other than S corporations, the annual interest charge is deductible as an interest expense only for the tax year it is paid or accrued.
- 5For filers other than corporations (other than S corporations), the interest reported on Form 8404 is not deductible.
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 20/25, and users can find the latest information regarding Form 8404 at www.irs.gov/Form8404.
What changed or needs a fresh check
- Edition date — confirm the revision reads 20/25.
- Payment due date — confirm the general rule is the 15th day of the 4th month following the close of the tax year (or check for specific corporate rules).
- Mailing address — verify the primary mailing address is 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.
- Signature — confirm you or the preparer signs and dates the return under penalties of perjury.
- Form purpose — confirm this form reports interest owed on DISC-related deferred tax liability.
Quick Facts
Downloads
After you file
- 1Keep a copy of the filed Form 8404 for recordkeeping purposes.
- 2If an amended Form 8404 is required, it must be filed if the amount on line 7 changes due to audit adjustments or changes made when filing an amended return.
- 3If estimates were used on the original Form 8404, check that any subsequent changes to those estimates are reflected when filing the tax return.
- 4The interest charge is deductible for corporations (other than S corporations) in the tax year it is paid or accrued; consult Proposed Regulations section 1.995(f)-1(j)(2) for details on the deduction tax year.
Sources
- SRCPurpose of form: Shareholders of Interest Charge Domestic International Sales Corporations (IC-DISCs) use Form 8404 to figure and report their interest owed on DISC-related deferred tax liability. [Instructions p.1]
- SRCWho must file: You must file if you are an IC-DISC shareholder AND the IC-DISC reports deferred DISC income on line 10, Part III of Schedule K (Form 1120-IC-DISC) AND that income increases taxable income. [Instructions p.1]
- SRCWhen to file: File by the due date of your federal income tax return for the year ending with or including the IC-DISC’s tax year end. [Instructions p.1]
- SRCDeductibility (Corporations): For corporations (other than S corps), the interest charge is deductible as an interest expense for the tax year it is paid or accrued. [Instructions p.1]
- SRCAmended Form 8404: File if line 7 changes due to audit adjustments, changes on amended return, or changes to original estimates. [Instructions p.1]
- SRCLine 1 Instruction: Enter taxable income or loss from your federal income tax return for the relevant tax year (actual or estimated). [Form p.2]
- SRCLine 2 Instruction: Enter the deferred DISC income from line 10, Part III, of Schedule K (Form 1120-IC-DISC) for the IC-DISC tax year ending within your tax year. [Form p.2]
Common confusion points
When must I file Form 8404?
You must file by the due date of your federal income tax return (excluding extensions) for the tax year that ends with or includes the IC-DISC’s tax year end.
→ Confirm the filing deadline based on your specific tax year end date.
What do I put on Line 1?
Enter the taxable income or loss from your federal income tax return for the relevant tax year; if you haven't filed, use an estimate.
→ Verify that the amount matches the income/loss reported on your main tax return.
When is the interest charge deductible?
For corporations (other than S corps), it is deductible in the tax year paid or accrued; for other filers, it isn't deductible.
→ Check if you are an S corporation shareholder or a non-corporate filer to determine deductibility.
Do I need to file an amended Form 8404?
You must file one only if the deferred tax liability amount (line 7) changes due to audit adjustments, changes made on an amended return, or changes to original estimates.
→ Review Line 7 of your current filing against any recent updates or amendments.
What happens if my tax year and IC-DISC tax year are different?
You must still file Form 8404 by the due date of *your* federal income tax return, provided it includes the relevant IC-DISC tax year end.
→ Ensure your filing deadline aligns with your entity's required submission date.
What if my tax return is a joint return?
Enter both your name and your spouse’s name on Form 8404, as shown on Form 1040 or 1040-SR.
→ Check that the names listed match the documentation of the primary filing entity.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Use an Amended Form 8404 when the DISC-related deferred tax liability (line 7) changes after initial filing.
Questions about IRS Form 8404
What is IRS Form 8404 used for?
This form calculates and reports the amount of interest a shareholder owes because of deferred taxes related to an IC-DISC. If you are a shareholder, you use this form to tell the IRS how much interest is due based on that deferred liability. This ensures the correct interest charge is paid with your return.
Who must file IRS Form 8404?
Shareholders of Interest Charge Domestic International Sales Corporations (IC-DISCs) or former IC-DISCs must file Form 8404 if the IC-DISC reports deferred DISC income to them and including that income increases their taxable income.
What information does IRS Form 8404 require?
The form collects shareholder information via Item A, along with identifying numbers for both the shareholder (Item B) and the IC-DISC (Item C). It details the tax year in Item D and lists the name of the IC-DISC in Item E. The calculation itself uses data from lines 1 through 9.
When is IRS Form 8404 due?
Form 8404 must be filed by the due date of your federal income tax return for the relevant tax year. For example, if your tax year ends July 31, 2026, you must file on or before November 16, 2026.
Where do I file IRS Form 8404?
If using the U.S. Postal Service, filing instructions are available at www.irs.gov/wheretofile. The specific address is found by going to Examples for returns beginning with a number, then clicking '8' under Find forms that begin with numbers.
How do I complete IRS Form 8404?
First, complete Items A through E with your specific details. Then, calculate the required figures across lines 1 through 9, ensuring line 4 is greater than zero before filing. Finally, sign and date the form under penalties of perjury to declare its accuracy.
What happens if IRS Form 8404 is filed incorrectly?
If the interest charge shown on line 9 isn’t paid by the due date, interest, compounded daily, at the rate specified under section 6621, will be imposed on the unpaid amount from the due date until payment.
When must I file Form 8404?
You must file by the due date of your federal income tax return (excluding extensions) for the tax year that ends with or includes the IC-DISC’s tax year end. Confirm the filing deadline based on your specific tax year end date.
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