Corporate tax returns may be requested for income verification when a customer is self-employed and the business is a corporation or Subchapter S corporation. Along with the customer’s personal tax returns (1040s), IRS Form 1120 are requested for corporations and IRS Form 1120S and schedule K-1 are requested for S corporations.
If utilizing income from Corporation (1120):
If the borrower needs additional income from the corporation to qualify, the underwriter must verify the following:
- Borrower has the legal right to withdraw income from the corporation, per corporate resolution or comparable document.
- Withdrawal of additional income will not impact the business operations, based on careful analysis of the corporate financial statements.
- The business has positive sales and earnings trends.
Avoid delays in processing your application
For all documents:
- Make sure the copies you send are legible.
- Do not include documents that have been altered with correction fluid or by other means.
- Submit the entire requested document and include all pages (even blank ones).
For this document
- Provide signed returns.
- Include all applicable schedules.