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Form 1120-S Lines 23 to 28: Tax, Payments, Amount Owed (2025)

Updated October 18, 2026. Quick answer: Lines 23 to 28 are the tax and payments section of the S corporation’s page 1. Lines 23a to 23c total the taxes the corporation itself may owe, lines 24a to 24z total the payments and credits, line 25 is the estimated tax penalty, and the result is an amount owed on line 26 or an overpayment on line 27 that line 28 splits between next year’s estimated tax and a refund.

Line 23a: excess net passive income or LIFO recapture tax

The form’s caption is “Excess net passive income or LIFO recapture tax”. The instructions say “These taxes can apply if the corporation was previously a C corporation or if the corporation engaged in a tax-free reorganization with a C corporation.” On the passive income side: “If the corporation has AE&P at the close of its tax year and has passive investment income for the tax year that is in excess of 25% of gross receipts, the corporation must figure its excess net passive income and pay tax on it.” They continue “Enter the tax on Form 1120-S, page 1, line 23a, and attach the computation statement to Form 1120-S.” The instructions include an Excess Net Passive Income Tax Worksheet for Line 23a; this page does not reproduce it, so read the worksheet by name in the instructions.

On the LIFO side: “The corporation may be liable for the additional tax due to LIFO recapture under Regulations section 1.1363-2 if” the conditions listed in the instructions are met. The instructions also say “Include this year’s installment in the total amount to be entered on line 23a.”

Line 23b: tax from Schedule D

The caption is “Tax from Schedule D (Form 1120-S)”. The instructions say “Enter the built-in gains tax from line 23 of Part III of Schedule D.” They add “See the instructions for Part III of Schedule D to determine if the corporation is liable for the tax.”

Line 23c: total of lines 23a and 23b and additional taxes

The caption is “Add lines 23a and 23b”. The instructions say “Include the following in the total for line 23c.” The items are the Form 4255 amounts and the look-back interest amounts described in the instructions. For Form 4255 the instructions say “Attach Form 4255 to Form 1120-S.” For the look-back interest, “If the corporation owes this interest, attach Form 8697” applies to completed long-term contracts. The rest of the line 23c text is in the instructions themselves.

Line 24: payments and credits

The form’s captions are “Current year’s estimated tax payments and preceding year’s overpayment credited to the current year” for 24a, “Tax deposited with Form 7004” for 24b, “Credit for federal tax paid on fuels (attach Form 4136)” for 24c, and “Elective payment election amount from Form 3800” for 24d. Line 24z is captioned “Add lines 24a through 24d”. The instructions have no separate paragraph for lines 24a, 24b or 24c (checked in both extractions), so the captions are what the form gives you. For 24d the instructions say “Enter the total gross EPE amount from Form 3800, Part III, line 6, column (h).” For 24z they say “If the corporation is the beneficiary of a trust and the trust makes a section 643(g) election to credit its estimated tax payments to its beneficiaries, include the corporation’s share of the payment in the total for line 24z.” Form 7004 is explained at Form 7004.

Line 25: estimated tax penalty

The caption is “Estimated tax penalty (see instructions” followed by “Check if Form 2220 is attached”. The instructions say “If Form 2220 is attached, check the box on line 25 and enter the amount of any penalty on this line.”

Lines 26 and 27: amount owed or overpayment

The caption for line 26 is “Amount owed. If line 24z is smaller than the total of lines 23c and 25, enter amount owed”. The caption for line 27 is “Overpayment. If line 24z is larger than the total of lines 23c and 25, enter amount overpaid”. For line 26 the instructions say “Generally, the corporation must pay any tax due in full no later than the due date for filing its tax return (excluding extensions).” They add “Payment of the tax due must be made electronically.” The instructions for line 27 say “If there is an overpayment on line 27, enter the amount the corporation wants refunded on line 28b.” As a computed illustration, not an IRS example, lines 23c and 25 of $7,500 and $500 total $8,000. A line 24z of $10,000 less that $8,000 leaves a $2,000 overpayment for line 27. For due dates, see Form 1065 and 1120-S due dates.

Line 28: credited to estimated tax or refunded

The caption is “Enter amount from line 27” with line 28a captioned “Credited to 2026 estimated tax”. The instructions for 28a say “The corporation can elect to apply all or part of the corporation’s overpayment to next year’s estimated taxes.” And “This election to apply some or all of the overpayment amount to the corporation’s 2026 estimated tax cannot be changed at a later date.” For 28b they say “Enter the amount to be refunded to the corporation on line 28b.”

For direct deposit, line 28c says “The routing number must be nine digits.” Line 28d says “Check the appropriate box for the type of account.” and “Don’t check more than one box.” Line 28e says “The account number can be up to 17 characters (both numbers and letters).” If the request cannot be processed, “If the IRS is unable to process the request for a direct deposit, a refund by check will be generated instead.”

Where the number comes from

Line 23a comes from the passive income worksheet statement, line 23b from Part III of Schedule D, and line 23c from the Form 4255 and look-back interest forms when they apply. The payment lines come from the corporation’s estimated tax records, the Form 7004 deposit record and the attached credit forms. Lines 26 and 27 are arithmetic on those totals. The income and deduction lines that precede this section are on the lines 1a to 6, lines 7 to 12 and lines 13 to 22 pages.

Where it goes next

The amount owed on line 26 is paid with the return, and the amount on line 28b is the refund. After line 28 the form moves to the signature block, and the shareholder-level reporting begins on Schedules B and K; see the Schedule K lines 1 to 4 page for how Schedule K starts. The corporation’s return is explained at Form 1120-S.

Edition and line numbers

This page reads the 2025 Form 1120-S and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The form’s title line reads “U.S. Income Tax Return for an S Corporation” and the period line reads “For calendar year 2025 or tax year beginning”. Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently.

Common mistakes

  • Ignoring a possible entity-level tax. The instructions say “These taxes can apply if the corporation was previously a C corporation or if the corporation engaged in a tax-free reorganization with a C corporation.”
  • Forgetting the attachments for line 23a. The instructions say “Enter the tax on Form 1120-S, page 1, line 23a, and attach the computation statement to Form 1120-S.”
  • Changing a line 28a election later. The instructions say “This election to apply some or all of the overpayment amount to the corporation’s 2026 estimated tax cannot be changed at a later date.”

Related: Form 1120-S, Form 7004, Form 1065 and 1120-S due dates, and Form 2553.

Sources

Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.

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