Form 8752 Instructions: Line-by-Line Walkthrough and Filing

Form 8752, “Required Payment or Refund Under Section 7519,” is filed each year by partnerships and S corporations that made a Section 444 election to use a fiscal tax year instead of a calendar year. The form calculates a deposit with the Treasury that offsets the tax deferral owners get from the fiscal year. For applicable election years beginning in 2025, the form and any payment are due by May 15, 2026.¹ These Form 8752 instructions walk through who files, how each line works, and what happens if you miss the deadline.

Who Has to File

Any partnership or S corporation that filed Form 8716 to elect a Section 444 fiscal year must file Form 8752 for every year the election is in effect.¹ That obligation stands even when the math produces no payment. If Line 9a comes in at $500 or less and no prior year’s required payment exceeded $500, you enter zero on Line 9b and send no money, but you still file the form.²

An entity that terminates its Section 444 election or liquidates files a final Form 8752 to recover the accumulated deposit balance.¹ Skipping the form is dangerous. A willful failure to comply with the payment rules terminates the election permanently.

What You Need Before You Start

Two concepts control the whole calculation: the base year and the deferral period.

The base year is generally the fiscal year immediately before the applicable election year. Lines 1, 2, and 6 all pull figures from that year.

The deferral period is the number of months between the start of the entity’s fiscal year and the end of the first calendar year within that fiscal year. In plain terms, it’s the gap between the fiscal year end and December 31. A September 30 year end has a three-month deferral period; an October 31 year end has two months. Section 444 generally caps this at three months for most new elections.³

Line-by-Line Walkthrough

Line 1: Net Income for the Base Year

This is not the ordinary taxable income figure from your entity return. For a partnership, net income means total income and expense items other than tax-exempt income, nondeductible expenses, and guaranteed payments under Section 707(c).¹ Guaranteed payments are the common trap. They’re prominent on the partnership return but stripped out here; Section 7519 handles them separately.⁴

If the base year was shorter than 12 months, annualize. Add the applicable payments from Line 2 to the short-year net income, then multiply by 12 divided by the number of months in the short year. Enter zero if net income is zero or negative.

Line 2: Applicable Payments

Applicable payments are amounts the entity paid to owners during the base year that those owners must include in gross income. Officer compensation to S corporation shareholder-employees is the classic example. Gains from property sales between the entity and an owner, dividends paid by an S corporation, and guaranteed payments to partners are all excluded.⁴

Many partnerships enter zero here because their owners receive only distributions and guaranteed payments. S corporations paying W-2 wages to owner-employees usually have a real number to report.

Line 3: Deferral Ratio

Divide the months in the deferral period by 12 and enter the result as a percentage, carried to at least the nearest tenth of a percent.² Three months yields 25.0%. Two months yields 16.7%.

Lines 4 Through 8: Building Net Base Year Income

Line 4: Line 1 times Line 3. This isolates the portion of net income attributable to the deferral period.
Line 5: Line 2 times Line 3. This is the pro-rata share of applicable payments for the deferral period.
Line 6: The actual applicable payments made during the deferral months of the base year.
Line 7: For a 12-month base year, subtract Line 6 from Line 5; if zero or negative, enter zero. For a short base year, enter the applicable payments made during the deferral period of the applicable election year instead.
Line 8: For a 12-month base year, add Line 4 and Line 7 to get net base year income. For a short base year, subtract Line 7 from Line 4, entering zero if negative.²

The Line 5–7 mechanic gives the entity credit when it actually paid owners more during the deferral months than its pro-rata share would predict. Front-loading those payments already accelerated income recognition on the owners’ side, so the calculation doesn’t demand a deposit for deferral that didn’t really happen.⁵

Line 9: The Required Payment

Line 9a multiplies Line 8 by 38%. That rate equals the highest individual income tax rate (currently 37%) plus one percentage point, per Section 7519, and is printed on the December 2025 form revision.² It applies flat regardless of any owner’s actual bracket.

Line 9b applies the $500 threshold. If Line 9a exceeds $500, or any prior year’s required payment exceeded $500, carry the full Line 9a amount to Line 9b. Otherwise, enter zero.²

Line 10: Net Required Payment Balance

This is the running total of all prior deposits minus any refunds already received.² It sits with Treasury as a deposit, not as a credit against income tax. Pull the balance from last year’s Form 8752 carefully.

Lines 11 and 12: Amount Due or Refund

If Line 9b is greater than Line 10, subtract Line 10 from Line 9b. That’s the additional payment due this year on Line 11. A growing business typically owes more each year as net income climbs.

If Line 10 is greater than Line 9b, subtract Line 9b from Line 10 and enter the difference as a refund on Line 12a. This happens when net base year income drops and the accumulated deposit now exceeds what Section 7519 requires. The December 2025 revision added Lines 12b through 12d for direct deposit information, so refunds no longer have to come as a paper check.¹

A Worked Example

A partnership with a September 30 fiscal year end has a three-month deferral period and a 25.0% deferral ratio. Base year net income (Line 1) is $400,000. Applicable payments for the full base year (Line 2) are $60,000. Applicable payments made during the three deferral months (Line 6) are $20,000.

Line 4: $400,000 × 25.0% = $100,000
Line 5: $60,000 × 25.0% = $15,000
Line 7: $15,000 − $20,000 is negative, so enter $0
Line 8: $100,000 + $0 = $100,000
Line 9a: $100,000 × 38% = $38,000
Line 9b: $38,000

If Line 10 (prior deposits net of refunds) is $30,000, Line 11 shows $8,000 due with the form. Line 7 landed at zero because the partnership paid more during the deferral months than the pro-rata share predicted, which the form credits back.

Where and How to File

For applicable election years beginning in 2025, the form and payment are due by May 15, 2026.¹ The deadline is a fixed cycle date, not tied to each entity’s fiscal year end.

The IRS prefers electronic payments and direct deposit for refunds.¹ Businesses can pay through EFTPS, the Treasury’s free payment system.⁶ For a check or money order, make it payable to the U.S. Treasury and write the entity’s name, taxpayer identification number, and “Form 8752” on the payment.

The form itself goes to one of two service centers depending on the entity’s principal place of business: Kansas City, MO 64999 for eastern states, or Ogden, UT 84201 for western and southern states. Check the IRS mailing chart for the exact split.⁷

What Happens If You File Late

An underpayment triggers a 10% penalty on the shortfall between the required payment and whatever was paid by the due date. The IRS can waive the penalty for reasonable cause when the failure was not willful.⁵

The bigger risk is losing the election. A willful failure to comply with Section 7519 terminates the Section 444 election, and once terminated, the entity can never make another Section 444 election.¹ That forces a permanent switch to a calendar year end.

Ending the Election and Getting the Deposit Back

An entity can voluntarily end its Section 444 election by switching to its required tax year, generally a calendar year, without needing IRS consent. Termination also happens automatically if the entity joins a tiered pass-through structure unless every entity in the tier shares the same tax year.³ For S corporations, the election also ends when S status ends, unless the entity immediately becomes a personal service corporation.¹

When the election terminates or the entity liquidates, file a final Form 8752 and check the box at Item C to claim a refund of the full Line 10 balance.¹ The IRS will not issue the refund before the later of April 15 of the following calendar year or 90 days after the claim is filed. Because the accumulated amount is a deposit rather than a tax, you get the entire balance back, but no interest accrues on the refund.⁵

1
Internal Revenue Service. Instructions for Form 8752 (12/2025)
2
Internal Revenue Service. Form 8752 (Rev. December 2025)
3
Office of the Law Revision Counsel. 26 USC 444 – Election of Taxable Year Other Than Required Taxable Year
4
Legal Information Institute. 26 USC 7519 – Required Payments for Entities Electing Not to Have Required Taxable Year
5
Office of the Law Revision Counsel. 26 U.S. Code 7519 – Required Payments for Entities Electing Not to Have Required Taxable Year
6
Internal Revenue Service. EFTPS: The Electronic Federal Tax Payment System
7
Internal Revenue Service. Where to File Your Taxes (for Form 8752)