# Form 1120-C: the federal income tax return for cooperatives and their patronage dividends

- **Canonical URL:** https://formspedia.com/us/form-1120-c/
- **Last updated:** 2026-11-11
- **Country & Language:** United States (`en-US`)
- **Form:** Form 1120-C
- **Revision:** 2025 (Cat. No. 47554F)
- **Issuing Agency:** Internal Revenue Service
- **Tax Area:** Business and corporate tax
- **Who Must File:** Corporations operating on a cooperative basis under section 1381 that allocate amounts to patrons
- **Filing Method:** Paper return by mail; e-filed only as a PDF inside a consolidated return
- **Legal Basis / Statute:** 26 U.S.C. 1381-1388 (subchapter T); 26 U.S.C. 6072(d)
- **Official Form PDF:** https://www.irs.gov/pub/irs-pdf/f1120c.pdf

Form 1120-C is the federal income tax return of a corporation that operates on a cooperative basis and allocates amounts to its patrons according to the business it does with them. What sets it apart from an ordinary corporate return is Schedule H on page 3: patronage dividends paid within the payment period come off taxable income on page 1, line 25b, and the remaining taxable income is taxed at 21% on Schedule J. This guide follows the 2025 form (Cat. No. 47554F, created 10/15/25) and the 2025 instructions dated January 15, 2026, which also cover fiscal years that begin in 2025 and end in 2026.

### Which cooperatives file Form 1120-C

The instructions require the return from any corporation operating on a cooperative basis under section 1381 that allocates amounts to patrons on the basis of business done with or for them. Farmers' cooperatives exempt under section 521 file it too, whether or not they have taxable income. Four kinds of organizations are left out:

- organizations exempt from income tax under chapter 1, other than section 521 farmers' cooperatives;

- mutual savings banks and similar institutions subject to part II of subchapter H (section 591 and following);

- insurance companies subject to subchapter L (section 801 and following);

- cooperatives that generate, transmit or otherwise furnish electric energy, or provide telephone service, to persons in rural areas.

Item C at the top right of page 1 records which type of cooperative is filing. "Farmers' tax exempt cooperative" is only for a farmers', fruit growers' or like association that applied for and received section 521 status. One that has sent Form 1028 but has no determination letter yet writes "Application Pending" at the top of page 1. Every other subchapter T cooperative checks "Nonexempt cooperative", and that includes farmers' cooperatives without section 521 status. A cooperative that checks the exempt box cannot file a consolidated return. If the cooperative filed Form 1120 in an earlier year as a subchapter T cooperative, it checks Item A, box 3.

### When the return is due: the September rule in section 6072(d)

The instructions give two deadlines and leave the line between them to the statute. A cooperative described in section 6072(d) files by the 15th day of the 9th month after its tax year ends. Any other cooperative files by the 15th day of the 4th month, except that a fiscal year ending June 30 (or a short year ending at any time in June) moves the date to the 15th day of the 3rd month. A due date on a Saturday, Sunday or legal holiday moves to the next business day.

Section 6072(d) covers two groups: section 521 exempt farmers' cooperatives, and other section 1381(a)(2) cooperatives that are obligated to pay patronage dividends of at least 50% of their net earnings from business done with or for patrons, or that paid that much out of patronage earnings in the most recent tax year in which they had such earnings. For a calendar-year 2025 return in either group, the statute sets the date at September 15, 2026. A calendar-year cooperative that pays out less than half of its patronage earnings falls under the 4th-month rule, which for 2025 meant April 15, 2026.

Form 7004 extends the time to file. It generally goes in by the regular due date with form code 34 entered on line 1, it needs no signature, and properly filing it gives the automatic extension without an approval notice; the IRS writes only if the request is disallowed. The Form 7004 instructions (Rev. December 2025) set that extension at generally 6 months and list a separate period for C corporations with tax years ending June 30, so a cooperative with that year end reads the exception there. A calendar-year cooperative under section 6072(d) that filed Form 7004 by September 15, 2026 therefore has until March 15, 2027. Paper Forms 7004 for Form 1120-C go to Ogden, UT 84201-0045, or to P.O. Box 409101, Ogden, UT 84409 when the principal business, office or agency is in a foreign country or U.S. territory. The extension covers filing only: tax is still due by the original date, and interest runs on late tax even when an extension was granted.

### Patronage dividends, per-unit retains and Schedule H

Schedule H, "Deductions and Adjustments Under Section 1382", collects what the cooperative paid to patrons, and its line 5 total goes to page 1, line 25b and to Schedule G, line 8. Lines 1 and 2 are open only to section 521 cooperatives: dividends paid on capital stock, retain certificates, revolving fund certificates, letters of advice and similar evidence of a proprietary interest (line 1), and nonpatronage income allocated to patrons (line 2). Line 3 is split by how the patronage dividend was paid: 3a money, 3b qualified written notices of allocation, 3c other property except nonqualified notices, and 3d money or property paid to redeem nonqualified notices. Line 4 shows, as a negative figure, the section 199A(g) deduction passed through to patrons, because agricultural and horticultural cooperatives must reduce the section 1382 deduction by that amount.

A patronage dividend is deductible only if paid within the payment period, which runs from the first day of the tax year in which the patronage occurs to the 15th day of the 9th month after that year ends. The amount must be based on the quantity or value of business done with or for the patron, paid under an obligation that existed beforehand, and figured from net earnings from patron business. The instructions name four payments that do not qualify: those made from earnings not from patron business, those made from business with other patrons who receive less or nothing for substantially identical transactions, redemptions of capital stock or certificates, and amounts paid without reference to net earnings from patron business.

A written notice of allocation (stock, a retain or revolving fund certificate, a letter of advice) is qualified when it is part of a patronage dividend paid at least 20% in money or by qualified check, and either the patron has at least 90 days to redeem it in cash and is told so in writing at the time, or the patron has consented to treat the allocation as received and reinvested. A nonqualified notice earns no deduction when issued. The deduction comes when it is redeemed in money or property, up to its stated dollar amount, and if deducting it in the issue year would have cost less tax, the reduction in those earlier years' tax goes on line 30g as a section 1383 adjustment, with a statement showing the computation.

Per-unit retain allocations follow a different rule. Section 1388(f) defines them as allocations for products marketed for a patron, fixed by agreement without reference to the cooperative's net earnings. Under section 1382(b), allocations paid within the payment period in money, qualified per-unit retain certificates or other property are treated as a deduction in arriving at gross income, while patronage dividends are treated as an item of gross income and a deduction from it. Schedule H has no line for per-unit retains paid, and the 2025 instructions do not say which page 1 line carries them; their only filing rule for the payer is a statement showing the part of the section 199A(g) deduction attributable to per-unit retain allocations. Before entering these amounts, ask the IRS which line to use: its business phone line is 800-829-4933, open 7 a.m. to 7 p.m. local time, Monday through Friday, or ask a tax adviser. Retains allocated in noncash form appear in the balance sheet, Schedule L, line 23, next to noncash patronage dividends on line 22.

On the receiving side, a cooperative that is itself a patron of another cooperative reports patronage dividends and per-unit retain allocations received on line 9, never on Schedule C. A statement must list each declaring association and the total received from it. Patronage dividends from purchases of capital assets or depreciable property generally reduce the basis of those assets instead of being reported as income.

### How to fill out Form 1120-C, line by line

Page 1 holds the identifying items and the income and deduction lines; page 2 carries taxable income, tax and payments down to the refund. The numbered markers in the image are added for this guide and match the first column of the table.

| Marker | Line or item | What goes there and where it comes from |
| --- | --- | --- |
| 1 | Item A, boxes 1 to 3 | Box 1 for a consolidated return, with Form 851 attached (and Form 1122 for each subsidiary in its first consolidated year). Box 2 when Schedule M-3 (Form 1120) is attached. Box 3 if Form 1120 was filed in a prior year as a subchapter T cooperative. |
|  | Name, address, Item B | The name in the charter, the principal office (not a registered agent's address) and the EIN. Without an EIN by the due date, write "Applied for" and the application date. |
| 2 | Item C | Farmers' tax exempt cooperative (section 521 status received) or nonexempt cooperative. |
|  | Item D | Initial, final, name change, address change or amended return. |
|  | Lines 1a to 3 | Gross receipts less returns, minus cost of goods sold from Form 1125-A, line 8. |
|  | Line 4 | Schedule C, line 23, column (a). Patronage dividends received do not belong here. |
| 3 | Line 9 | Other income, including patronage dividends and per-unit retain allocations received, with the statement of declaring associations. |
|  | Line 11 | Officers' compensation; Form 1125-E is required when total receipts (line 1a plus lines 4 to 9) reach $500,000. |
|  | Line 22 | Section 199A(g) deduction of specified agricultural or horticultural cooperatives: generally 9% of the lesser of qualified production activities income or taxable income, figured on Form 8903 with "Specified Cooperative Section 199A(g) deduction" written across the top, or on a similar schedule. |
| 4 | Line 25b | Schedule H, line 5. |
|  | Lines 26a and 26b | NOL deduction, with a statement separating patronage and nonpatronage losses; special deductions from Schedule C, line 24. |
|  | Line 27 | Taxable income. It cannot be less than nonpatronage taxable income on Schedule G, line 10, column (b). |
|  | Lines 28 and 29 | Total tax from Schedule J, line 11; line 29 is the first installment of a section 1062 deferral from Form 1062, line 15. |
|  | Lines 30a to 30z | Payments and credits, including tax deposited with Form 7004 (30d) and the section 1383 adjustment (30g). |
|  | Lines 32 to 35 | Estimated tax penalty (box checked if Form 2220 is attached), amount owed or overpayment, and the direct deposit fields 35c to 35e. |
| 5 | Signature | An authorized officer signs and dates; a paid preparer adds a signature and PTIN below. |

Losses from patronage business cannot reduce nonpatronage income, which is why Schedule K, item 13 asks for NOL carryovers in two amounts. A cooperative whose bylaws allow it may net earnings and losses of different allocation units under section 1388(j)(1), but only for patron business and with the written notice to patrons that section 1388(j)(3) describes.

### The schedules on pages 2 to 5

Schedule C (page 2) lists dividends received with deduction percentages from 23.3% to 100% depending on ownership and source, and feeds line 4 and line 26b. Schedule G (page 3) splits gross receipts, deductions and taxable income into a patronage column (a) and a nonpatronage column (b); only section 521 cooperatives may deduct nonpatronage distributions in column (b) of line 8. Schedule J computes the tax: 21% of line 27 on line 1a, corporate alternative minimum tax from Form 4626 on line 3, then credits and other taxes. A cooperative can elect to pass certain fuel and energy credits to patrons with a written notice mailed before the return's due date; credits it allocates that way are left off line 5c, and the election cannot be revoked.

Schedule K (page 4) asks questions found only on this return: the method (book, tax or other) used to figure distributable patronage (question 3), the number of foreign patrons and the patronage distributions paid or allocated to them (11a and 11b), and outstanding nonqualified notices of allocation (15). Question 14 decides how much of the rest is needed. Where total receipts (line 1a plus lines 4 to 9) and total assets at year end are both under $250,000, a "Yes" answer removes Schedules G, L, M-1 and M-2; the cooperative instead enters its cash distributions and the book value of property distributions for the year.

Schedule L is the balance sheet per books, and Schedules M-1 and M-2 reconcile book income and unappropriated retained earnings. Total assets of $10 million or more at year end (consolidated, if filing that way) require Schedule M-3 (Form 1120) instead of Schedule M-1. A cooperative that must file Schedule M-3 with under $50 million in assets, or one filing it voluntarily, may complete Part I of Schedule M-3 and then use Schedule M-1 in place of Parts II and III; Schedule M-1, line 1 must then equal Schedule M-3, Part I, line 11. Gross receipts of at least $500 million in any of the 3 preceding years bring Form 8991 and the base erosion minimum tax (question 16).

### Paying the tax and what late filing costs

Tax shown on line 33 is due in full by the original due date, and the instructions require the payment to be made electronically: through EFTPS, the cooperative's IRS business tax account, a same-day wire, or a third party such as a bank or payroll service. Estimated tax is required when the cooperative expects $500 or more in tax for the year, in installments due on the 15th day of the 4th, 6th, 9th and 12th months of the tax year, also by electronic funds transfer. Form 2220 figures any underpayment penalty.

- Late filing: 5% of the unpaid tax for each month or part of a month, up to 25%. For a return required to be filed in 2026 that is more than 60 days late, the minimum is the smaller of the tax due or $525.

- Late payment: 1/2 of 1% of the unpaid tax per month or part of a month, up to 25%.

- Interest: charged at the section 6621 rate on late tax and on certain penalties, even when the filing deadline was extended.

- Installment agreement: available online when the cooperative cannot pay line 33 in full, owes $25,000 or less and can pay within 24 months; a fee applies and penalties and interest keep running.

A reasonable-cause explanation is not attached to the return. The instructions ask the cooperative to send it after a penalty notice arrives, and the IRS then decides whether the criteria are met.

### What the 2025 instructions list as new

The 2025 instructions for Form 1120-C open with a "What's New" section of four items:

- Late filing penalty: for returns required to be filed in 2026, the minimum penalty for a return more than 60 days late is the smaller of the tax due or $525.

- Farmland sales under section 1062: P.L. 119-21 added section 1062, which lets a taxpayer elect to pay the net income tax on gain from selling or exchanging qualified farmland property to a qualified farmer in four equal annual installments. The election covers sales and exchanges in tax years beginning after July 4, 2025. The full section 1062 applicable net tax liability goes on line 30i, and the first installment due in tax year 2025 on line 29.

- Estimated tax relief for section 1062 elections: the IRS waives part of the section 6655 penalty for missed estimated payments attributable to such a sale, and Notice 2026-3 explains how to compute the required payments.

- Corporate alternative minimum tax: for tax year 2025, the IRS continues to waive the section 6655 penalty for estimated payments not made that are attributable to a CAMT liability (Notice 2025-27; see the line 32 instructions).

### Where to file Form 1120-C on paper and the official PDF

A cooperative whose principal business, office or agency is in the United States mails the return to: Department of the Treasury, Internal Revenue Service, Ogden, UT 84201-0012. From a foreign country or a U.S. territory, the address is: Internal Revenue Service, P.O. Box 409101, Ogden, UT 84409. An IRS-designated private delivery service can meet the "timely mailing as timely filing" rule, but cannot deliver to the P.O. box.

The return goes on paper. IRS Publication 4164 (Rev. 12-2025), the Modernized e-File guide, states that MeF does not process Form 1120-C. The single exception is a Form 1120-C that forms part of a consolidated return: it then has to be e-filed as a PDF attached at the top level of that return.

The current form is the [2025 Form 1120-C PDF](https://www.irs.gov/pub/irs-pdf/f1120c.pdf), with the [2025 instructions](https://www.irs.gov/pub/irs-pdf/i1120c.pdf); the IRS "About Form 1120-C" page lists both as the current revision. An amended return is a complete new Form 1120-C, on the revision for the year being changed, with Item D box 5 checked and every required entry filled in, not just the corrected ones. A change of address or responsible party after filing is reported on [Form 8822-B](/us/form-8822-b/).

### Before the return is mailed

- Signed and dated by the president, vice president, treasurer, assistant treasurer, chief accounting officer or another officer authorized to sign. A receiver, trustee or assignee signs instead when filing for the cooperative, and a bankruptcy receiver or trustee attaches the court order authorizing the signature.

- The "Yes" box beside the signature checked only if the IRS may discuss the return with the paid preparer; that authorization ends no later than the due date, without extensions, of the 2026 return.

- Schedules and forms placed behind page 5 in the order the instructions set, starting with Schedule N (Form 1120), Schedule O (Form 1120) and Form 4626 and ending with other schedules in alphabetical order, other forms in numerical order and supporting statements.

- No entry space filled with "See Attached" or "Available Upon Request", and the cooperative's name and EIN on every supporting statement.

- The line 9 statement of declaring associations, the line 26a statement separating patronage and nonpatronage NOLs, and Form 851 if Item A, box 1 is checked.

### Official sources

- Internal Revenue Service, [Form 1120-C, U.S. Income Tax Return for Cooperative Associations, 2025 (Cat. No. 47554F)](https://www.irs.gov/pub/irs-pdf/f1120c.pdf)

- Internal Revenue Service, [Instructions for Form 1120-C (2025), dated January 15, 2026](https://www.irs.gov/pub/irs-pdf/i1120c.pdf)

- Internal Revenue Service, [Instructions for Form 1120-C (2025), web version](https://www.irs.gov/instructions/i1120c)

- Internal Revenue Service, [About Form 1120-C](https://www.irs.gov/forms-pubs/about-form-1120-c)

- Internal Revenue Service, [Instructions for Form 7004 (Rev. December 2025)](https://www.irs.gov/pub/irs-pdf/i7004.pdf)

- Internal Revenue Service, [Form 7004 (Rev. December 2025)](https://www.irs.gov/pub/irs-pdf/f7004.pdf)

- Internal Revenue Service, [Publication 4164, Modernized e-File Guide for Software Developers and Transmitters (Rev. 12-2025)](https://www.irs.gov/pub/irs-pdf/p4164.pdf)

- Internal Revenue Service, [Let us help you (IRS telephone assistance)](https://www.irs.gov/help/let-us-help-you)

- U.S. Government Publishing Office, [26 U.S.C. 6072, time for filing income tax returns](https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleF-chap61-subchapA-partV-sec6072.htm)

- U.S. Government Publishing Office, [26 U.S.C. 1381, organizations to which subchapter T applies](https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleA-chap1-subchapT-partI-sec1381.htm)

- U.S. Government Publishing Office, [26 U.S.C. 1382, taxable income of cooperatives](https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleA-chap1-subchapT-partI-sec1382.htm)

- U.S. Government Publishing Office, [26 U.S.C. 1388, definitions](https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleA-chap1-subchapT-partIII-sec1388.htm)