How do I account for federal income tax refund on 1120

[Andy431]

Hi - I am filing form 1120.   In 2020 I received federal income taxes I paid for 2019.   I know it is not taxable income.   But, how do I account for this refund on form1120 so everything ties in?   In QBD I have entered a refund for Federal Income Tax as an Expense account.

Any help will be appreciated. 

Andy

[M-MTax]

federal tax refunds are not entered anywhere on a federal income tax return unless they're going to be distributed at some time on K-1s and C corps don't issue those.

[Andy431]

Thank you for your reply.   This is not about distribution.  I am trying to do the Income Reconciliation, Retained Earnings, and Balance Sheet in TurboTax to file my 1120.    I had a $2000 Federal Income Tax refund on my 2019 form 1120.  I am trying to enter this refund as either -$2000 or +$2000 and neither works.   Entering it as -2000 fixes the Income Reconciliation, but messes up Retained Earning.  Entering it as +2000 does vice versa.

Thanks.

[M-MTax]

If you're doing a balance sheet you need to put the cash back in so debit your cash account.

[Andy431 · Accepted solution]

Thank you for your help.  Somehow it nudged me to the right solution.  I just read in TurboTax's fine print "Note: for best results, we recommend you enter data on Schedule M-1 or on the worksheet, but not both. "   I deleted the worksheet and entered data directly on the schedules.   It's all fine now.