Form 8404, Interest Charge on DISC-Related Deferred Tax Liability, is the Internal Revenue Service (IRS) form on which shareholders of an Interest Charge Domestic International Sales Corporation (IC-DISC) figure the interest they owe on deferred DISC income. It is filed separately from your income tax return, and the 2025 edition is the one on this page. On FillingPDF you can fill out the form online and download or print the completed PDF; the original PDF and the latest information are published by the IRS at www.irs.gov/Form8404.
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What is 8404?
Form 8404, Interest Charge on DISC-Related Deferred Tax Liability, is the IRS form that shareholders of Interest Charge Domestic International Sales Corporations (IC-DISCs) use to figure and report the interest they owe on DISC-related deferred tax liability.
The form works from your own return and from the IC-DISC's Schedule K (Form 1120-IC-DISC). You enter your taxable income or loss (line 1), the deferred DISC income from line 10, Part III, of Schedule K (line 2) and any section 995(f)(2)(B) adjustments (line 3). The form then compares the tax liability with and without that deferred income (lines 5 and 6). The difference is the DISC-related deferred tax liability on line 7. Multiplying it by the base period T-bill rate factor on line 8 gives the interest charge due on line 9.
Form 8404 is issued under OMB No. 1545-0939. It is not a tax return and is not attached to one: the form says to file it separately from your income tax return. The interest charge is not an estimated tax payment, and the instructions say estimated tax is not required for it.
Partnerships and S corporations do not complete the form for their owners. They attribute their share of deferred DISC income to partners and shareholders, and those partners and shareholders complete Form 8404.
Who needs to file 8404?
You must file Form 8404 if all three of these apply:
- You are a shareholder of an IC-DISC (or a former IC-DISC).
- The IC-DISC reports deferred DISC income to you on line 10, Part III, of Schedule K (Form 1120-IC-DISC).
- Adding that income would increase the taxable income on your tax return for the tax year.
Individuals, corporations, trusts and decedents' estates all file it; item A has a box for each type of taxpayer. Individuals enter their social security number in item B, and other filers enter their employer identification number.
If you receive income from more than one IC-DISC, you still file one form and report the combined income on line 2.
Do not file the form if the total on line 4 is zero or less. Partners and shareholders of a partnership or S corporation file it themselves for their attributed share. The form does not describe filing for someone else, so see the IRS instructions at www.irs.gov/Form8404 for any other situation.
When to file 8404
File Form 8404 by the due date of your federal income tax return, not counting extensions, for your tax year that ends with or includes the IC-DISC's tax year end.
The instructions give an example. A fiscal-year corporation has a tax year of August 1, 2025, to July 31, 2026, and is a shareholder in an IC-DISC with the same tax year. Its Form 8404 is due on or before November 16, 2026.
The interest charge is paid by the date your federal income tax for the year must be paid. For individuals and corporations that is generally the 15th day of the 4th month after the tax year closes. Corporations with a tax year ending June 30 should see section 2006(a)(3)(B) of P.L. 114-41. Unpaid interest is charged additional interest, compounded daily at the section 6621 rate, from the due date until it is paid.
You file an amended Form 8404 only if line 7 changes because of audit adjustments, because of changes you make on an amended return, or because you used estimates that later changed when you filed your return.
Documents you need
- A statement listing each section 995(f)(2)(B) adjustment and showing how the net amount on line 3 was computed, only if more than one adjustment is involved.
- A statement of the IC-DISCs' names and respective identifying numbers, only if income is reported to you from more than one IC-DISC and you write "See attached" for items C and E.
How to fill out 8404
Check the type of taxpayer
In item A, check the box for Corporation, Individual, Trust or Decedent's estate. Enter your name and address as shown on the tax return that supplies the line 1 income, and add your spouse's name as on Form 1040 or 1040-SR if the return is joint.
Enter identifying numbers
Item B: individuals enter a social security number; other filers enter an employer identification number. Item C: enter the IC-DISC's identifying number from the Schedule K (Form 1120-IC-DISC) that reported the income to you.
Enter the tax year and IC-DISC name
Item D: enter the calendar year, or the beginning and ending dates, of the tax year on your return for which the interest charge is figured. Item E: enter the name of the IC-DISC, or "See attached" for items C and E if there are several.
Enter taxable income or loss
Line 1: enter the taxable income or loss from your federal return for the tax year that ends with or includes the IC-DISC's tax year end. If you have not filed yet, estimate it from all available information.
Enter deferred DISC income
Line 2: enter the deferred DISC income from line 10, Part III, of Schedule K (Form 1120-IC-DISC) for the IC-DISC tax year that ends with or within your tax year.
Enter section 995(f)(2)(B) adjustments
Line 3: enter the net of all section 995(f)(2)(B) adjustments to taxable income, applying the Special Computation Rules. If more than one adjustment applies, attach a statement listing each and showing the computation.
Combine lines 1, 2 and 3
Line 4: combine the three lines. If the result is zero or less, do not file the form.
Figure the tax liability
Line 5: enter the tax liability on the line 4 amount. Line 6: enter the tax liability per your return, actual or estimated. Both follow the instructions' definition of tax liability, including the listed taxes and credits to leave out.
Compute the deferred tax liability
Line 7: subtract line 6 from line 5 to get the DISC-related deferred tax liability.
Enter the factor and interest due
Line 8: enter the base period T-bill rate factor from the instructions for your tax year. Line 9: multiply line 7 by line 8 to get the interest charge due.
Sign the form
Sign and date under the penalties of perjury declaration. A paid preparer other than you completes the Paid Preparer Use Only block with name, signature, date, PTIN, firm's name, firm's EIN, address and phone.
Review and download the completed PDF
Check each line, especially the line 4 test and the attached statements, then download or print the completed PDF from FillingPDF and send it as described under How to submit.
How to submit 8404
Form 8404 is mailed to the IRS using the U.S. Postal Service, and the interest charge is paid separately, preferably by an electronic method.
- By mail: the address depends on where you live and your filer type. Go to www.irs.gov/wheretofile, click 8 under "Find forms that begin with numbers", then look for the form number 8404.
- Payment: the IRS recommends paying electronically when you have access to U.S. banking services or electronic payment systems. Options are listed at www.irs.gov/payments.
- Separate filing: the form says to file it separately from your income tax return.
- Not to the forms office: do not send the form to the Tax Forms and Publications address printed in the instructions for comments.
FillingPDF lets you fill out and download the PDF; submission follows the IRS channels above.
Common mistakes to avoid
- Filing Form 8404 when line 4 is zero or less; the form says not to file in that case.
- Attaching Form 8404 to your income tax return instead of filing it separately, as the form directs.
- Entering the deferred DISC income on line 2 from a Schedule K line other than line 10, Part III, of Schedule K (Form 1120-IC-DISC).
- Reporting multiple adjustments on line 3 without attaching a statement that lists each item and shows the computation.
- Listing only one IC-DISC in items C and E when income comes from several, instead of listing each or writing "See attached" and attaching a statement.
- Using a social security number in item B when you are not an individual; other filers must enter an employer identification number.
- Using the 365-day factor on line 8 for a short or 52-53 week tax year; the instructions refer those years to Rev. Rul. 2025-23.
- Waiting for the extended return due date to pay; extensions are excluded from the filing date, and unpaid interest accrues at the section 6621 rate from the due date.
Frequently asked questions
What is Form 8404 used for?
Form 8404 is the IRS form IC-DISC shareholders use to figure and report the interest they owe on DISC-related deferred tax liability. The interest comes from deferred DISC income reported to you on Schedule K (Form 1120-IC-DISC), and line 9 shows the interest charge due.
Who has to file Form 8404?
A shareholder of an IC-DISC (or former IC-DISC) must file it when the IC-DISC reports deferred DISC income to them on line 10, Part III, of Schedule K (Form 1120-IC-DISC), and adding it would increase their taxable income. If line 4 is zero or less, do not file.
When is Form 8404 due?
By the due date of your federal income tax return, excluding extensions, for your tax year that ends with or includes the IC-DISC's tax year end. The interest itself is generally due on the 15th day of the 4th month after the tax year closes.
Do I attach Form 8404 to my tax return?
No. The form states that you file it separately from your income tax return. To find the mailing address, go to www.irs.gov/wheretofile, click 8 under forms that begin with numbers, and look for the form number 8404.
What happens if I don't pay the interest charge on time?
Interest is imposed on the unpaid interest from the due date until it is paid. It is compounded daily at the rate specified under section 6621, according to the form's instructions. Estimated tax payments are not required for this charge.
Is the Form 8404 interest charge deductible?
For corporations other than S corporations, the annual interest charge is deductible as an interest expense for the tax year it is paid or accrued. For other filers the instructions say the interest is not deductible.
When do I file an amended Form 8404?
Only if the DISC-related deferred tax liability on line 7 changes because of audit adjustments, because of changes you make by filing an amended return, or because estimates used on your original Form 8404 changed when you filed your return.
Can I fill out Form 8404 online on FillingPDF?
Yes. You can fill out the PDF online on FillingPDF and download or print it. FillingPDF is an independent service and does not file the form or pay the interest for you; you submit it to the IRS by mail.
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