How to Fill Out and File Form 4626, Schedule A: Columns and Carryover

Schedule A of Form 4626 reports an applicable corporation’s pro-rata share of adjusted net income or loss from each controlled foreign corporation (CFC) it owns, under Section 56A(c)(3) of the corporate alternative minimum tax (CAMT). You complete one row per CFC, total the pro-rata shares, reduce the total by any available CFC adjustment carryover, and carry the result to Part I of Form 4626. The schedule is filed with Form 4626 as an attachment to Form 1120.

If the corporation has no CFCs, Schedule A stays blank and the CFC lines on Form 4626 are zero. Everyone else fills it out.

Who Files Schedule A

Schedule A only matters if the corporation is an “applicable corporation” under Section 59(k) and holds interests in one or more CFCs. A corporation is applicable when its average annual adjusted financial statement income (AFSI) for the prior three tax years exceeds $1 billion, counting every member of its controlled group.¹ S corporations, RICs, and REITs are excluded.²

Foreign-parented multinational groups (FPMGs) use a two-part test: combined group AFSI over $1 billion, and U.S. member AFSI of at least $100 million. Both prongs must be met.²

Two safe harbors let corporations near the threshold skip Form 4626 without running the full AFSI computation. The interim simplified method in Notice 2025-27 substitutes $800 million (and $80 million for the FPMG U.S.-member prong). The simplified method in the proposed regulations uses $500 million (and $50 million). A corporation whose average AFSI falls below the applicable safe harbor threshold — and that was not an applicable corporation in a prior year — does not have to file Form 4626 or Schedule A.²

Completing Schedule A Column by Column

Schedule A is titled “Pro-Rata Share of Adjusted Net Income or Loss of CFCs Described in Section 56A(c)(3).” Each CFC gets one row. The columns run as follows.²

Column (a) — Name of the CFC. Enter the legal name as it appears on the CFC’s financial statement.
Column (b) — EIN or reference ID number. Use the EIN if the CFC has one; otherwise the reference ID number used consistently on other international information returns.
Column (c) — Country code. The two-letter code for the CFC’s country of incorporation.
Column (d) — Current-year net income or loss. The CFC’s net income or loss for the year, translated into U.S. dollars.
Column (e) — Section 56A(c)(3) adjustments. The statutory modifications that convert the CFC’s financial statement income into its adjusted amount for CAMT purposes, in U.S. dollars.
Column (f) — Sum of (d) and (e). The CFC’s adjusted net income or loss before applying your ownership percentage.
Columns (g) and (h) — Reserved. Leave blank.
Column (i) — Pro-rata share. Your corporation’s pro-rata share of the column (f) amount for that CFC.

List each CFC on its own row. If the corporation owns many CFCs, attach continuation pages using the same column layout.

Getting Column (i) Right

The pro-rata share in column (i) is determined under rules similar to Section 951(a)(2), which allocates CFC income based on ownership percentage and holding period during the CFC’s tax year. Tiered ownership, mid-year acquisitions, and multiple classes of stock all affect the allocation, and an error in column (i) flows through the rest of Form 4626. Trace the ownership chain carefully and document your calculation before entering the number.

Totaling and the CFC Adjustment Carryover

Add column (i) across all rows to get the aggregate pro-rata share. Then reduce that total by any CFC adjustment carryover available for the year. Attach a supporting statement showing, for each prior year, the carryover generated, the amount used in prior years, and the amount still available.²

The reduced total flows into Part I, line 2c of Form 4626. FPMG members carry it to line 11b instead.²

Filing Schedule A With Form 1120

Schedule A is not filed on its own. Attach it to Form 4626, and attach Form 4626 to the corporation’s Form 1120.³ For calendar-year filers, the due date is April 15. Form 7004 filed by that date extends the filing deadline six months, to October 15, but does not extend the deadline to pay. Estimated CAMT should be paid by the original due date to stop interest from running.⁴

Corporations with $10 million or more in total assets that file at least 250 returns annually must e-file Form 1120 and every attached schedule.⁵ Because CAMT targets corporations with average AFSI over $1 billion, essentially every filer of Schedule A will meet the e-file mandate. The e-file system validates that Form 4626 and Schedule A are attached before accepting the return.

Penalties for Errors and Late Filing

A substantial understatement of income tax carries a 20% accuracy-related penalty. For corporations other than S corporations or personal holding companies, an understatement is substantial if it exceeds the lesser of 10% of the tax that should have been shown (or $10,000, whichever is greater) and $10 million.⁶ At CAMT scale, small percentage errors can clear that threshold.

A late return draws a failure-to-file penalty of 5% of the unpaid tax for each month or partial month the return is overdue, up to 25%. If the return is more than 60 days late, the minimum penalty for returns due in 2026 is the lesser of $525 or 100% of the tax owed.⁷

Interest runs from the original due date. For 2026, the standard corporate underpayment rate is 7% in Q1 and 6% in Q2. Large corporate underpayments — those over $100,000 — face 9% in Q1 and 8% in Q2. Rates reset quarterly.⁸

Records to Keep

Keep Form 4626, Schedule A, and the supporting CFC financial statements for at least three years from the later of the filing date or the due date. The window extends to six years if unreported income exceeds 25% of gross income, and to seven years for a worthless securities or bad debt claim.⁹

For Schedule A specifically, retain each CFC’s applicable financial statement, the U.S. dollar translation workpapers, the Section 56A(c)(3) adjustment calculations, ownership documentation supporting the column (i) pro-rata share, and the CFC adjustment carryover schedule. If the IRS challenges the numbers, the corporation carries the burden of producing them.¹⁰

Not the Old ACE Schedule A

Older references to Schedule A of Form 4626 describe the Adjusted Current Earnings (ACE) adjustment under former Section 56(g), which required corporations to add 75% of the spread between ACE and pre-adjustment AMTI. The Tax Cuts and Jobs Act repealed the old corporate AMT for tax years beginning after 2017. The Inflation Reduction Act of 2022 then created the current CAMT for tax years after December 31, 2022.¹¹ Today’s Schedule A reports CFC adjustments, not ACE. Pre-2018 instructions for the form do not apply.

1
Office of the Law Revision Counsel. 26 U.S. Code 55 – Alternative Minimum Tax Imposed
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Internal Revenue Service. Instructions for Form 4626 (2025)
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Internal Revenue Service. About Form 4626, Alternative Minimum Tax – Corporations
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Internal Revenue Service. About Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns
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Internal Revenue Service. E-file for Large Business and International (LB&I)
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Office of the Law Revision Counsel. 26 U.S. Code 6662 – Imposition of Accuracy-Related Penalty on Underpayments
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Internal Revenue Service. Topic No. 653, IRS Notices and Bills, Penalties and Interest Charges
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Internal Revenue Service. Quarterly Interest Rates
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Internal Revenue Service. How Long Should I Keep Records?
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Internal Revenue Service. Topic No. 305, Recordkeeping
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Internal Revenue Service. Corporate Alternative Minimum Tax