Form 1122 Instructions: Filing, Deadline, and Consent Rules

Form 1122 is the one-page consent a subsidiary corporation signs the first year it is included in a consolidated federal income tax return. The subsidiary does not mail it to the IRS. It hands the signed form to the common parent, and the parent attaches it to the group’s consolidated Form 1120. Getting it right matters: a missing or defective Form 1122 gives the IRS grounds to challenge the consolidated election for the whole affiliated group.

When a Subsidiary Has to File Form 1122

The form is required from each subsidiary the first time it is included in a consolidated return. If the group filed consolidated last year and the subsidiary was already in it, no new Form 1122 is needed this year.¹ It applies only to a subsidiary’s first year in the group, whether the group is brand new or has been filing consolidated returns for decades.

To qualify, the subsidiary must belong to an “affiliated group” under IRC Section 1504. That means the common parent (directly or through other group members) owns stock representing at least 80 percent of the total voting power and at least 80 percent of the total value of the subsidiary’s stock.² Both prongs. A parent holding 90 percent of the vote but only 75 percent of the value does not meet the threshold.

The right to file a consolidated return belongs to the group, and it is conditioned on every member consenting to the consolidated return regulations.³ Form 1122 is how each subsidiary formally gives that consent.

Corporations That Cannot Join

Only domestic “includible corporations” can be part of a consolidated group. Section 1504(b) bars several categories outright:

Tax-exempt corporations under Section 501
Insurance companies taxed under Section 801
Foreign corporations
Regulated investment companies and real estate investment trusts
DISCs
S corporations

The S corporation exclusion catches groups off guard. A parent can own 100 percent of an S corp subsidiary and still cannot fold it into the consolidated return. Insurance companies get a limited exception: two or more domestic insurance companies taxed under Section 801 can file a consolidated return among themselves, and the parent of a broader affiliated group can elect to pull insurance subsidiaries into the main consolidated return, but only after the insurance company has been a group member for at least five consecutive tax years.²

What Goes on the Form

The form is short. Every field still has to be right:

Subsidiary’s full legal name as registered with its state of incorporation
Subsidiary’s EIN (a wrong digit here can cause the IRS to fail to match the form to the subsidiary’s records)
Subsidiary’s street address, city, state, and ZIP
Tax year, either the calendar year or the beginning and ending dates of the fiscal year, matching the parent’s consolidated return period
Parent corporation’s name and EIN, which links the consent to the correct consolidated return

The body of the form is a pre-printed authorization statement. By signing, the subsidiary authorizes the parent to include it in the consolidated return for the indicated tax year and every subsequent year the group is required to file consolidated returns.⁴ That language matters. The consent is not a one-year arrangement.

Who Can Sign

The form must be signed by an officer of the subsidiary who is authorized to sign tax returns on its behalf. The regulations point to IRC Section 6062, which identifies the eligible signatories: the president, vice president, treasurer, assistant treasurer, chief accounting officer, or any other officer duly authorized to act.⁵ The signatory’s name and title must be printed below the signature. Before signing, confirm the officer’s authority through corporate resolutions or charter documents. A signature from someone outside the authorized group is far easier to prevent than to fix after the return is filed.

How Form 1122 Gets Filed

The subsidiary does not send the form to the IRS. It delivers the completed, signed form to the common parent, and the parent attaches it to the group’s consolidated Form 1120.⁶ A separate Form 1122 must be attached for each subsidiary joining the group for the first time that year.

For groups with many new subsidiaries, the regulations offer a practical shortcut. The parent may attach either signed originals or unsigned copies. If unsigned copies go with the return, the parent must retain the signed originals in its records under the record-retention requirements of Section 1.6001-1(e).¹ For electronic filers, the unsigned version is typically attached as a PDF to the electronic Form 1120 submission while the wet-ink originals stay in the parent’s files.

Deadline

Form 1122’s deadline is the due date of the parent’s consolidated return. For a calendar-year C corporation, IRC Section 6072 sets that date at April 15 following the close of the tax year.⁷ Fiscal-year filers have until the 15th day of the fourth month after year-end. If the parent files Form 7004 for an automatic six-month extension, the deadline for the consolidated return and every attached Form 1122 shifts with it, moving a calendar-year group to October 15.⁸

Don’t Forget Form 851

Form 1122 does not travel alone. Every consolidated return must also include Form 851, the Affiliations Schedule. Form 1122 captures each new subsidiary’s consent; Form 851 maps the entire group structure, identifies the common parent, lists every member, reports how estimated tax payments and overpayment credits are allocated among members, and confirms that each subsidiary meets the ownership requirements.⁹ The Form 1120 instructions require both.⁶

What the Subsidiary Is Agreeing To

Signing Form 1122 does more than check an administrative box. It binds the subsidiary to all consolidated return regulations for the current year and every subsequent year the group is required to file consolidated returns. The group is treated as a single taxpayer, so profits and losses among members are netted together.

The intercompany transaction rules give a sense of the trade-off. Under Treasury Regulation 1.1502-13, when one group member sells property to another, the seller’s gain is deferred until the buyer disposes of the property outside the group. The two corporations are treated as divisions of a single entity for timing and character purposes, even as they calculate gain or loss separately.¹⁰ The deferral is often a benefit, but it also means the subsidiary surrenders control over the timing of its own gains and losses.

The consent is not a year-to-year election. Once given, the subsidiary cannot unilaterally file a separate return the next year. The group continues filing consolidated returns unless a termination event occurs or the IRS grants permission to stop.

If Form 1122 Was Missed

A missing Form 1122 is not automatically fatal to the consolidated election, but it creates real risk. The regulations provide two safety valves.

The first is a facts-and-circumstances test. If the subsidiary failed to file Form 1122 but its income and deductions were included in the consolidated return, it did not file a separate return, and it appeared on Form 851, the Commissioner may determine that the subsidiary effectively consented despite the missing form.¹

The second covers mistake or inadvertence. If the failure to consent was due to a mistake of law, mistake of fact, or inadvertence, the common parent can demonstrate that to the Commissioner’s satisfaction. If accepted, the subsidiary is treated as though it had filed Form 1122 all along.¹

Neither path is guaranteed. The safer approach is to build Form 1122 into every acquisition closing checklist so the signed consent exists before the consolidated return is even being prepared. Discovering the omission during an IRS exam is a far worse time to test the relief provisions.

When Consent Ends and the Five-Year Bar

A subsidiary’s inclusion in the consolidated return terminates when it leaves the affiliated group. Common triggers:

Sale or disposition of enough subsidiary stock that ownership falls below the 80 percent voting power or value threshold
A spin-off or reorganization that removes the subsidiary from the parent’s ownership chain
Termination of the group itself, such as when the common parent merges into a corporation outside the group

A subsidiary that leaves mid-year files a separate return for the portion of the tax year after its departure.²

Rejoining is not immediate. IRC Section 1504(a)(3) blocks a departed subsidiary (and any successor) from being included in any consolidated return filed by the same affiliated group, or by another group with the same common parent, until the 61st month after the first tax year in which it left.² Roughly five years. The Secretary of the Treasury can waive the restriction, but the waiver is discretionary and subject to conditions the Secretary prescribes. Groups considering selling and later reacquiring a subsidiary need to plan around this window well in advance.

1
eCFR. 26 CFR 1.1502-75 – Filing of Consolidated Returns
2
Office of the Law Revision Counsel. 26 US Code 1504 – Definitions
3
Office of the Law Revision Counsel. 26 USC 1501 – Privilege to File Consolidated Returns
4
Internal Revenue Service. IRS Form 1122 – Authorization and Consent of Subsidiary Corporation To Be Included in a Consolidated Income Tax Return
5
Office of the Law Revision Counsel. 26 US Code 6062 – Signing of Corporation Returns
6
Internal Revenue Service. Instructions for Form 1120 (2025)
7
Office of the Law Revision Counsel. 26 USC 6072 – Time for Filing Income Tax Returns
8
Internal Revenue Service. About Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns
9
Internal Revenue Service. About Form 851, Affiliations Schedule
10
eCFR. 26 CFR 1.1502-13 – Intercompany Transactions