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Form 8902: Alternative Tax on Qualifying Shipping Activities
IRS Form 8902 is the Alternative Tax on Qualifying Shipping Activities used by qualifying vessel operators to elect or terminate the alternative tax and report related shipping income. The election must be made on or before the due date of the corporation’s income tax return.
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IRS Form 8902 - Alternative Tax on Qualifying Shipping Activities
IRS Form 8902 is the Alternative Tax on Qualifying Shipping Activities used by qualifying vessel operators to elect or terminate the alternative tax and report related shipping income. The election must be made on or before the due date of the corporation’s income tax return.
Risk Radar
Scan points- 1Failing to attach Form 8902 to the corporate tax return invalidates the election.
- 2Missing the attachment of Form 8902 to the corporation’s Form 1120 or 1120‑F.
- 3Submitting the election after the corporate return’s due date, missing the on‑or‑before deadline.
- 4Omitting the required schedule that details calculations for lines G(3)(a) and G(3)(b).
- 5Leaving the type of ownership (O, L, or CL) blank in Part III for a vessel.
Plain English
This form lets a company that runs qualifying vessels choose to pay a special alternative tax instead of the regular corporate tax. It also reports the income from those shipping activities and shows any election or termination of the tax.
Submission Date
- Filing date: 2018-04-13 23:00:11
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when a qualifying vessel operator is making, continuing, or revoking an alternative tax election under section 1354(a) or reporting related shipping income.
- Do not use it when you are not a qualifying vessel operator.
- Check Form 1120 instead when filing a domestic corporation’s income tax return.
Form selector
Use this form or another form?
Corporation filing a domestic income tax return
Form 8902 must be attached to the corporate return
✓ Confirm the return is Form 1120 before attaching Form 8902
Corporation filing a foreign income tax return
Form 8902 must be attached to the foreign corporate return
✓ Verify the filing entity uses Form 1120-F
Electing group filing as a single entity
Group election is treated as one corporation for Form 8902 purposes
✓ Ensure the group consolidates on a single Form 1120
Deadline or filing window
The filing trigger is the corporation’s decision to make, continue, or revoke the alternative tax election. The election must be filed on or before the due date of the corporation’s Form 1120 or Form 1120‑F for that tax year, and extensions of time to file for the return also extend the deadline for Form 8902. No separate deadline is provided beyond the return’s due date.
Checklist
What you need before filling it out
Name of corporation
Corporation's legal name · Form 8902 top of page
Employer identification number
Corporation's EIN · Form 8902 top of page
Section 1354 election (Part I, line A)
Election details with tax year dates · Part I of Form 8902
Gross Income From Qualifying Shipping Activities (Line H)
Sum of lines G(1), G(2)(a), and G(3)(a) · Instructions p.3
Amount exceeding 0.1% limit (Line G(3)(b))
Schedule showing computations · Instructions p.3
Before you submit
- 1Verify the form revision date reads April 2018.
- 2Enter the corporation’s legal name exactly as registered.
- 3Enter the correct employer identification number.
- 4Select the appropriate election option (A, B, or C) for the current tax year.
- 5Calculate and enter the amounts for lines G(1), G(2)(a), G(3)(a), and line H as instructed.
- 6Attach schedules for lines G(3)(a) and G(3)(b) calculations.
- 7Attach Form 8902 to the corporation’s Form 1120 or Form 1120-F.
- 8Ensure amounts on lines G(2)(b) and G(3)(b) are also reported on Form 1120/1120-F.
- 9Confirm the OMB number 1545-0123 is present on the form.
How to file this form
- 1Determine eligibility as a qualifying vessel operator — retain eligibility documentation.
- 2Complete Part I to elect, continue, or revoke the Section 1354 election — keep the completed Part I page.
- 3Calculate gross income and limits for lines G and H per the instructions — save calculation worksheets.
- 4Attach required schedules for lines G(3)(a) and G(3)(b) — verify attachments are included.
- 5Attach Form 8902 to the corporation’s Form 1120 or Form 1120-F — ensure the combined package is assembled.
- 6File the combined return by the corporation’s tax return due date — obtain filing receipt as proof.
- 7Retain a copy of Form 8902 and all supporting documents — store for record‑keeping.
Known limitations
- 1The form does not apply to entities that are not qualifying vessel operators.
- 2Partnerships and other pass‑through entities do not file Form 8902 directly; they follow partner rules.
- 3Individuals and non‑corporate taxpayers are excluded from using Form 8902.
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
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Fillable formOpen in Editor->Form 8902 is the Rev. April 2018 edition; the instructions direct users to the latest information page at IRS.gov/Form8902, and note that Public Law 115-97 reduced the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017.
What changed or needs a fresh check
- Edition date — confirm the revision reads April 2018
- Fee — Not stated in the official source
- Mailing address — Not stated in the official source
- Signature — Not stated in the official source
- OMB number — confirm OMB No. 1545-0123 appears on the form
Quick Facts
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After you file
- 1Keep the filed Form 8902 and all schedules for as long as the records may become material in tax administration.
- 2Expect no immediate acknowledgment; the IRS will process the attached corporate return.
- 3If the IRS issues a notice, review it for any required corrections.
- 4File an amended corporate return with a corrected Form 8902 if errors are discovered.
- 5Update internal records to reflect the election status for future tax years.
Sources
- SRCInstructions p.1 — purpose of Form 8902 is for qualifying vessel operators making or terminating a section 1354 election.
- SRCInstructions p.1 — who must file: a qualifying vessel operator making an election or reporting termination.
- SRCInstructions p.1 — filing method: attach Form 8902 to the corporation's Form 1120 or Form 1120-F.
- SRCInstructions p.1 — Public Law 115-97 reduced the corporate tax rate from 35% to 21% for tax years after Dec 31 2017.
- SRCInstructions p.1 — blending of 35% and 21% rates for fiscal years spanning the change date.
- SRCInstructions p.3 — line G(3)(b) requires a schedule showing computations.
- SRCInstructions p.3 — line H amount must be excluded from gross income on Form 1120 or 1120-F.
- SRCForm p.1 — revision date is April 2018 and OMB No. 1545-0123 is displayed.
- SRCNot stated in the official source — verify on the agency site
Common confusion points
Do I need to file Form 8902 if I am a partnership?
Partnerships are not required to file Form 8902 directly; partners follow the rules in the instructions.
→ Verify the filing entity is a corporation, not a partnership.
Which tax rate applies for my fiscal year that spans 2017 and 2018?
The instructions require blending the 35% rate before Jan 1 2018 with the 21% rate after that date.
→ Check the fiscal year dates and apply the appropriate blended rates.
Should the income on line H be included on my Form 1120?
Line H income is excluded from gross income on Form 1120.
→ Confirm line H amount is omitted from the Form 1120 gross income section.
Do I need to attach a schedule for lines G(3)(a) and G(3)(b)?
The instructions explicitly require a schedule showing those computations.
→ Attach the schedule before filing.
Is there a signature line on Form 8902?
The source does not display a signature field.
→ Review the actual form to see if a signature is required.
What is the 0.1% limitation referring to?
It limits incidental activity income; any excess must be reported on line G(3)(b).
→ Calculate 0.1% of line G(1) and compare to incidental income.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Form 1120 – file an amended return to correct errors on Form 8902.
Questions about IRS Form 8902
What is IRS Form 8902 used for?
This form lets a company that runs qualifying vessels choose to pay a special alternative tax instead of the regular corporate tax. It also reports the income from those shipping activities and shows any election or termination of the tax.
Who must file IRS Form 8902?
A qualifying vessel operator – any corporation that operates one or more qualifying vessels and meets the shipping activity requirement – must file Form 8902 when making or reporting an alternative tax election.
What information does IRS Form 8902 require?
Form 8902 collects the election or termination decision (Part I), vessel details such as name, IMO number, ownership type and percentage (Part III), and calculates notional shipping income (Part IV) including lines G and H.
When is IRS Form 8902 due?
The corporation must make the alternative tax election on or before the due date (including extensions) of its Form 1120 or Form 1120‑F for the tax year.
Where do I file IRS Form 8902?
Attach Form 8902 to the corporation’s Form 1120 or Form 1120‑F when filing.
How do I complete IRS Form 8902?
First, determine whether the corporation is making a new election, continuing an existing one, or revoking it, and complete Part I with the appropriate election or termination date. Next, fill Part III for each qualifying vessel, entering vessel name, IMO number, flag, date flagged, ownership type, ownership percentage, and type of vessel use. Then calculate the notional shipping income in Part IV using the prescribed formulas and attach any required schedules for lines G(3)(a) and G(3)(b). Finally, attach the completed Form 8902 to the corporation’s Form 1120 or Form 1120‑F and file the combined return.
Do I need to file Form 8902 if I am a partnership?
Partnerships are not required to file Form 8902 directly; partners follow the rules in the instructions. Verify the filing entity is a corporation, not a partnership.
Which tax rate applies for my fiscal year that spans 2017 and 2018?
The instructions require blending the 35% rate before Jan 1 2018 with the 21% rate after that date. Check the fiscal year dates and apply the appropriate blended rates.
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