# C Corporation Tax Return (Form 1120)

> A C corporation pays US federal income tax at 21% on its profits by filing Form 1120, generally due on the 15th day of the fourth month after year-end (15 April for calendar years), plus state income or franchise taxes where it does business. A corporation that is 25% or more foreign-owned also files Form 5472 for related-party transactions, and dealings with an Indian parent or affiliate must be priced at arm's length in both countries.

Practice: US Tax Services — https://www.industax.com/services/us-tax/

For Delaware corporations, the annual franchise tax is separate from income tax and is often overstated when calculated using the default authorised shares method; the assumed par value capital method usually gives a much lower figure.

We prepare federal and state returns, Delaware franchise tax, Form 5472 and the transfer pricing documentation that keeps US and Indian positions consistent.

## Key facts

| Item | Detail |
| --- | --- |
| Federal rate | 21% |
| Due | 15 April (calendar year); 6-month extension via Form 7004 |
| Foreign ownership 25%+ | Form 5472 |
| Delaware | Annual franchise tax and report by 1 March |
| Related-party pricing | Arm's length in US and India |

## Who needs this

- Delaware C corps of Indian startups
- US subsidiaries of Indian companies
- Flipped startups with Indian operations

## What's included

- Form 1120 and state returns
- Delaware franchise tax optimisation
- Form 5472
- Transfer pricing coordination

## Documents

- Financial statements
- Cap table and share details
- Intercompany agreements

## Process

1. **Close** — Books finalised in US GAAP format.
2. **Prepare** — Federal, state and Delaware filings.
3. **Align** — Transfer pricing with India.

Work that legally requires a US enrolled agent or CPA is signed by a partner professional; Indus Tax coordinates it.

## FAQs

### Why is my Delaware franchise tax bill so high?

Delaware's default notice uses the authorised shares method, which can produce very large figures for startups with millions of authorised shares. Recalculating under the assumed par value capital method usually reduces it sharply.

### Does a loss-making C corp need to file?

Yes. Form 1120 is required every year regardless of profit, and losses can be carried forward.

### Are dividends from a US subsidiary taxed in India?

Yes, in the hands of the Indian parent, with credit for US withholding tax (15% under the treaty for 10%+ corporate shareholders).

## Official sources

- IRS — Internal Revenue Service: https://www.irs.gov/

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Canonical page: https://www.industax.com/services/us-tax/c-corp-tax-return-1120
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.