Indiana Current Year S Corporation Income Tax Booklet with Forms and Schedules
Extracted from PDF file 2019-indiana-it-20s-booklet.pdf, last modified November 2019
Current Year S Corporation Income Tax Booklet with Forms and SchedulesINDIANA 2 0 1 9 IT-20S S Corporation Income Tax Booklet www.intax.in.gov Indiana businesses must report and pay sales and withholding taxes electronically ALL businesses in Indiana must file and pay their sales and withholding taxes electronically. Businesses currently filing paper coupons will need to transition to filing via the state’s INtax program or use a third-party vendor to electronically transmit forms ST-103 and WH-1. This is required by Indiana law. Did you know? • Service providers can also use INtax. • We offer a range of sophisticated tutorials to help you learn how to use INtax. • We have a special hotline for questions specifically related to INtax. Call (317) 232-2337. To learn more and get started, visit www.intax.in.gov. INBiz: Your One-Stop Source for your Business INBiz is the state of Indiana’s one-stop resource for registering and managing your business and ensuring it complies with state laws and regulations. Visit this best-in-class portal at www.inbiz.in.gov 2 SP 261 (R22 / 12-19) Indiana Department of Revenue 2019 IT-20S Indiana S Corporation Income Tax Booklet What’s New for 2019 Add-backs • Online File and Pay Available through INTIME INTIME, Indiana’s new online tax portal was available for Corporate Customers as of September 3, 2019. INTIME provides the following functionality to customers: • Make payments using a bank account or credit card • View and respond to correspondence from DOR • Request and print return transcripts on-demand • Electronic delivery of correspondence • Online customer service support through secure messaging • Updates have been made to the Bonus Depreciation and Section 179 Expense add-back instructions. See page 8 for more information. The wagering taxes required to be added back as a tax based on or measured by income is being phased out. See page 8 for more information. Credits • • Increased Online Support for Tax Preparers In addition to the functionality listed above, INTIME provides increased access and functionality for tax preparers. INTIME provides the following functionality for tax preparers: • Gain access to view and manage multiple customers under one login • Ability to file returns, make payments, and view file and pay history for clients • Request electronic power of attorney (ePOA) authorization to view customer accounts • View and respond to correspondence for clients • Secured messaging • • Alternative Fuel Vehicle Manufacturer Tax Credit. This credit has been repealed. Any previously approved yet unused credit is available to be claimed. Headquarters Relocation Credit. Some or all of this credit may be refundable to the owners. See instructions on page 19 for more information. Industrial Recovery Credit. The timeline for claiming this credit has changed. See page 20 for more information. School Scholarship Tax Credit Contribution Ceiling Increased. The total of allowable net contributions to the program has increased to $15 million for the program’s fiscal year of July 1, 2019 through June 30, 2020. Annual Public Hearing In accordance with the Indiana Taxpayer Bill of Rights, the department will conduct an annual public hearing in Indianapolis in June of 2020. Event details will be listed at www.in.gov/dor/4877.htm. Please come and share feedback or comments about how the department can better administer Indiana tax laws. If you cannot attend, please submit feedback or comments in writing to: Indiana Department of Revenue, Commissioner’s Office, MS# 101, 100 N. Senate Avenue, Indianapolis, IN 46204. References to the Internal Revenue Code Public Law (PL) 234-2019, Sec. 8, amended Indiana Code (IC) 6-3-1-11. The definition of adjusted gross income (AGI) is updated to correspond to the federal definition of adjusted gross income contained in the Internal Revenue Code (IRC). Any reference to the IRC and subsequent regulations means the Internal Revenue Code of 1986, as amended and in effect on January 1, 2019. For a complete summary of new legislation regarding taxation, please see the Synopsis of 2019 Legislation Affecting the Indiana Department of Revenue at www.in.gov/dor/3656.htm. Who Must File and When Any S corporation doing business in Indiana and deriving gross income from sources within Indiana must file an annual return, Form IT-20S, with the department. It also must file information returns (Schedule IN K-1s) disclosing each shareholder’s distributive share of the S corporation’s income whether distributed or undistributed. These forms are due on or before the 15th day of the 4th month following the close of the S corporation’s tax year. If filing by paper, enclose the first five pages of the U.S. Income Tax Return for an S corporation (Form 1120S) and Schedule M-3. Federal Schedules K-1 should not be enclosed but must be made available for inspection upon request by the department. Schedule IN K-1 Electronic Filing Requirement Beginning with tax years ending after Dec. 31, 2019 (tax year 2019 fiscal year filers), a taxpayer that is required to file twenty-five or more Schedule IN K-1’s must file them in an electronic format. For taxpayers filing on a calendar year basis, this electronic filing requirement begins with tax year 2020. Schedule E Update Treatment of certain receipts, including those includable under IRC 965/951A that are treated as a foreign source dividend, are treated differently. See page 13 for information about this and additional updates. Schedule Composite Update Nonresident shareholders will need to file Form IT-40PNR if county tax is withheld for them on Schedule Composite. See page 15 for more information. 3 Doing Business in Indiana How to Determine the Tax Rate for Calendar-Year, Fiscal-Year, Short-period, and 52-53 Week tax year Taxpayers For Indiana adjusted gross income (AGI) tax purposes, the term doing business generally means the operation of any business enterprise or activity in Indiana, including but not limited to the following: • Maintenance of an office, a warehouse, a construction site, or another place of business in Indiana; • Maintenance of an inventory of merchandise or material for sale, distribution, or manufacture, or consigned goods; • The sale or distribution of merchandise to customers directly from company-owned or -operated vehicles when the title of merchandise is transferred from the seller or distributor to the customer at the time of sale or distribution; • The rendering of a service to customers in Indiana; • The ownership, rental, or operation of a business or property (real or personal) in Indiana; • Acceptance of orders in Indiana with no right of approval or rejection in another state; • Interstate transportation; and • Maintenance of a public utility. Pursuant to IC 6-3-2-1(c), the following steps must be used to determine the tax rate if a taxpayer is subject to different tax rates for a taxable period: • Multiply the tax rate in effect on June 30 of the taxable period by the number of days in the taxpayer’s taxable period that occurred before July 1 of the taxable year. • Multiply the tax rate in effect on July 1 of the taxable period by the number of days in the taxpayer’s taxable period that occurred after June 30 of the taxable year. • Add the amounts in Step 1 and Step 2, and then divide the sum by the total number of days in the taxpayer’s taxable year. • Round the rate determined in Step 3 to the nearest 0.01%. General Filing Instructions S Corporation Filing Requirements Liability of the S Corporation Corporations that are permitted to and do file in accordance with Section 1361(a)(1) of the Internal Revenue Code (IRC) are exempt from the Indiana adjusted gross income tax for any tax period for which the election is in effect, except on passive income and built-in gains. S corporations as entities generally are not subject to an income or financial institution tax. S corporations are considered to be the taxpayer with respect to the payment of amounts withheld on nonresident shareholders’ distributive shares. See the section titled “Withholding Tax Liabilities of S Corporations” for more information. Note: S elections cannot be made retroactively. Qualifications under Indiana law for filing S corporation returns are essentially the same as in the IRC. However, the corporation must file Form IT-20S and meet the withholding requirements for nonresident shareholders under Indiana Code (IC) 6-3-4-13. S corporations are subject to the use tax. Use tax is due on the storage, use, or consumption of tangible personal property purchased in a transaction in Indiana or elsewhere. The only exceptions are if; • The transaction is exempted from the sales and use tax by law; or • The sales tax due and paid on the transaction equals the use tax due. To the extent a qualified S corporation’s income is exempt for federal purposes, the AGI tax will not be assessed against the S corporation. An S corporation failing to withhold for nonresident shareholders will be subject to the penalty provided by IC 6-8.1-10-2.1(h), instead of losing its tax exemption. This penalty is 20% of the amount of tax required to be withheld and paid under IC 6-3-4-13. In addition, there is a penalty of $10 for each failure to timely file an information return, Schedule IN K-1. Corporations filing for the first time must enclose a copy of the approval letter from the Internal Revenue Service granting the S election. See the instructions for the Sales/Use Tax Worksheet on page 10. The apportionment Schedule E must be included with the return if the S corporation is doing business both within and outside Indiana and has any shareholders not domiciled in Indiana. See the instructions for Schedule E on page 13. Calculating Corporate Income Tax Rate The corporate AGI tax rate is as follows: After June 30, 2018, and before July 1, 2019................................... 5.75% After June 30, 2019, and before July 1, 2020................................... 5.5% After June 30, 2020, and before July 1, 2021................................... 5.25% After June 30, 2021............................................................................. 4.9% An S corporation that has nonresident shareholders must file a composite return for all its nonresident shareholders. A $500 penalty will be assessed to any S corporation that fails to file a composite return that includes all nonresident shareholders (PL 211-2007 SEC. 27, 44, 58). How to Determine the Tax Rate Any passive income and built-in gains of an S corporation that are subject to tax under provisions of the IRC will be subject to Indiana adjusted gross income tax. See the instructions for Form IT-20S Schedule B on page 9. For taxpayers whose taxable year begins when one rate is in effect and the taxable year ends when a different rate is in effect, compute the tax as provided below. This includes calendar-year taxpayers, fiscal-year taxpayers, short-period taxpayers, and 52-53 week tax year taxpayers. However, if your taxable year begins and ends during a period when the same rate is in effect (for instance, a fiscal year from July 1, 2018 to June 30, 2019), no proration is necessary. 4 A corporation is not required to file quarterly estimated payments if its annual unpaid liability is less than $2,500. Estimated tax payments must be submitted with the Indiana corporation’s quarterly income tax return or by electronic funds transfer (EFT). Corporations required to make quarterly estimated payments can use the annualized income installment method calculated in the manner provided by IRC Section 6655(e) as applied to the corporation’s AGI tax liability. Payments of amounts withheld must be remitted to the department via electronic method by the due date. If a filing and/or payment of the proper amount of tax withheld is not made by the due date, penalty and interest will be added. A person responsible for remitting payments is personally liable for the tax to be remitted, and may be subject to criminal prosecution if the failure to pay and/or file a withholding return is due to fraud or tax evasion. Businesses can file and remit withholding taxes through INtax (www.intax.in.gov) or a third-party vendor; they can also use INtax to file and remit sales tax. The threshold for required EFT payments for corporate estimated taxes is $5,000. Estimated payments of less than $5,000 can be made by EFT but are not required to be made by EFT. Estimated tax payments and withholding/composite tax payments may be paid online. Visit www.in.gov/dor. Withholding on Shareholders An S corporation must withhold state income tax at the individual income tax rate on the amount it pays or credits to any of its nonresident shareholders on the shareholder’s distributive share of the income derived from Indiana sources regardless of whether distributions were made. Corporate filers (whether filing on a calendar-year, fiscal-year, or short-tax-year basis) must remit by the 20th day of the 4th, 6th, 9th, and 12th months of the corporation’s tax periods. For more details, see Information Bulletin #11 at www.in.gov/dor/3650.htm. IC 6-3-4-13 provides that all nonresident shareholders must be included in a composite return schedule, and the S corporation must continue to withhold Indiana adjusted gross income tax for all nonresident shareholders. There is no provision for a shareholder to “opt out” of composite filing. Each nonresident shareholder’s composite tax is calculated at the relevant tax rate. The department has streamlined the procedure for making withholding payments for nonresidents; all withholding monies will be remitted with Form IT6WTH, and credit for the withholding/composite tax will be reflected on Schedule IN K-1 for each shareholder. Form IT-6WTH can be made electronically at www.in.gov/dor/4340.htm. Form IT-6WTH can also be made available by calling the Corporate Tax section at (317) 232-0129. For further information, consult Income Tax Information Bulletin #72 at www.in.gov/dor/3650.htm. To avoid costly penalty and interest charges for delinquent filing of returns, an S corporation should verify its tax status and withholding responsibilities before conducting business in Indiana. Withholding Tax Liabilities of S Corporations The following instances obligate the S corporation to register with the department and become an Indiana withholding agent on behalf of each of the following. Withholding on Employees S corporations making payments of salaries, wages, tips, fees, bonuses, and commissions that are subject to Indiana state and/or county income taxes and are required by the IRC to withhold federal taxes on those types of payments are also required to withhold on those payments for Indiana tax purposes. The withholding requirement does not apply to residents of reverse credit states and who are subject to and pay income taxes at rates equal to or greater than Indiana’s individual income tax rate to the resident states. The relevant reverse credit states are: • Arizona; • Oregon; and • Washington, D.C. Withholding on the compensation of nonresident team members of certain professional sports organizations is based on duty days performed in Indiana. Refer to Income Tax Information Bulletin #88 (www.in.gov/dor/3650.htm). If an employee resides in a state that has a reciprocal agreement with Indiana, the employee is exempt from Indiana state income tax but is subject to the relevant county tax. An S corporation with an employee withholding liability must register as an Indiana withholding agent. The department assigns an Indiana Taxpayer Identification Number (TID). S corporations must withhold at the county’s relevant tax rate on each Indiana nonresident shareholder whose principal place of business or employment on January 1 is located in an Indiana county. See Schedule CT-40, page 2, at www.in.gov/dor/6281.htm to get the county’s tax rate. The S corporation has two options in registering as an Indiana withholding agent: • Register with the department online using INBiz (www.inbiz.in.gov); or • Visit either the department’s downtown Indianapolis office or one of the district offices located throughout the state to use the department’s kiosks to register online. Trusts and Estates – S corporations must withhold on the amount it pays or credits as dividends or for the shareholder’s distributive share derived from Indiana sources to any of its nonresident shareholders that are trusts, estates, and nonprofit organizations not domiciled in Indiana. This amount must reflect the ultimate tax liability due Indiana by the respective member or beneficiary because of the S corporation’s activities. Note: The withholding provisions do not apply to nonresident shareholders who are nontaxable trust or estate entities. 5 Amended Returns An S corporation must withhold tax on the amount it pays or credits as dividends or for the shareholder’s distributive share derived from Indiana sources to any of its nonresidents that are fiduciaries. Then, a trust or estate must also withhold state income taxes for all its nonresident beneficiaries. Both the S corporation and the shareholders must file amended Indiana returns within 180 days after the filing of the amended federal return if: • The S corporation files an amended federal return; and • The change(s) affects the Indiana income or the taxable income reportable by the shareholders. Withholding Amounts on Nonresident Shareholders – Withholding amounts should be remitted by using Form IT-6WTH. An adjustment made by the Internal Revenue Service affecting the reportable Indiana income must be reported to Indiana with an amended S corporation return. This must be done within 180 days after the IRS adjustment becomes final. Check the box at the top of Form IT-20S if filing an amended return. A penalty will be assessed if an S corporation should have withheld but did not. The penalty is 20% of the amount required to be withheld. If the payment is late, it is also subject to interest in addition to the amount withheld or required to be withheld and paid to the department. If a distribution to nonresident shareholders is made with property other than money, or a gain is realized without the payment of money, the corporation may not release the property or credit the gain until it has funds sufficient to pay the withholding tax due. Instructions for Completing Form IT-20S Note: Shareholders not domiciled in Indiana must meet annual filing requirements and remit all unpaid tax, penalties, and interest. Filing Period and Identification Use Form IT-20S to file: • A 2019 corporation return for a tax year ending Dec. 31, 2019; • A short tax year beginning and ending in 2019; or • A fiscal year beginning in 2019 and ending in 2020. Accounting Periods and Methods The accounting period for Form IT-20S and the method of accounting adopted must be the same as used for federal income tax purposes Extended Filing Due Date For a fiscal or short tax year, provide both the beginning month, day, and year and the ending month, day, and year at the top of the form. The initial due date for filing is the 15th day of the 4th month following the close of the S corporation’s tax year. The department accepts the federal extension of time application (Form 7004) and the federal electronic extension. If a taxpayer has an extension, there is no need to contact the department before filing the annual return. Returns postmarked within 30 days after the last date indicated on the federal extension will be considered timely filed. Please use the corporation’s full legal name and present mailing address. For foreign addresses, please note the following: • Enter the name of the city, town, or village in the box labeled City; • Enter the name of the state or province in the box labeled State; and • Enter the postal code and the 2-digit county code in the box labeled Zip Code. Do not file a separate copy of this federal extension form with the department to request an Indiana extension at the time the extension is requested. Instead, enclose a copy of the federal extension of time when filing the state return and check box R on the front of Form IT-20S. Check the box at the top of the form if filing an amended return. For a name change, check the box at the top of the return. If filing by paper, enclose with the return copies of amended Articles of Incorporation or an Amended Certificate of Authority filed with the Indiana Secretary of State. If a federal extension is not requested, request a separate Indiana extension of time to file. Do this by writing to: Indiana Department of Revenue, Corporate Income Tax, Tax Administration, P.O. Box 7206, Indianapolis, IN 46207-7206. Extensions of time to file are applicable to the filing of the return only and not to any tax liability due. Any payments made after the original due date must include penalty and interest. The federal identification number shown in the box in the upper-right corner of the return must be accurate and the same as used on the U.S. Income Tax Return for an S Corporation. The reporting corporation with a Qualified Subchapter S Subsidiary (QSSS) must enclose a statement (or federal Form 8869) showing the name, address, and federal ID number of the owned S corporation(s) included in this return or enclose a completed Schedule 8-D. 6 County Code Number. List the two-digit county code number if filing a return for a corporate address in Indiana. See Departmental Notice #1 located at www.in.gov/dor/reference/files/dn01.pdf for a list of county codes. Enter “00” (two zeroes) in the county box D if corporate address lies outside of Indiana. Line 1. Enter the amount from the federal S Corporation Return Schedule K: • Net ordinary business income; • Net income from real estate activities from Form 882; • Other rental income activities; • Portfolio income and deductions; • Royalties; • Capital gains and losses; and • Other income. Enter the principal business activity code from the North American Industry Classification System (NAICS), in the designated block of the return. Use the six-digit activity code reported on the federal corporation income tax return. The amount should total the net income (loss) from Schedule K, line 1 through line 10, less line 11 and a portion of line 12 related to investment income (see below). Questions K through V and Other Fill-in Lines All corporations filing an Indiana corporation income tax return must complete the top portion of the form, including questions K through V. Check or complete all boxes that apply. K. Indicate the date and state of incorporation. L. Indicate the state of the corporation’s commercial domicile. M. Indicate the year the initial Indiana return was filed. N. Indicate the accounting method used. O. Indicate the date of election as an S corporation. P. Check the “final return” box only if the corporation is dissolved, liquidated, or has withdrawn from the state. File Form BC-100 to close out any sales and withholding accounts. Go to www.in.gov/dor/3731.htm to complete this form online. -If the corporation is undergoing bankruptcy, check the 3rd box. -Check “Composite Return” if filing and attach a Schedule Composite for nonresident shareholders. -Check the appropriate box on question P if completing Schedule M, Alternate Adjusted Gross Income Tax Calculation. Q. Enter the total number of shareholders of the corporation in field one of question Q. Enter the number of all shareholders who are nonresidents of Indiana in field two of question Q. R. Check this box if the corporation has a valid extension of time or an electronic federal extension of time to file the return. If applicable, enclose a copy of federal Form 7004 when filing the state return. S. Check this box if this corporation filed as a C corporation for the prior tax year. T. Check this box if this corporation is a member of any partnership. U. Check this box if income is reported from disregarded entities. If this box is checked, please enclose a list of the disregarded entities with the return. If filing electronically, please complete the disregarded entity portion of the federal recap schedule(s). V. Check this box if claiming a research expense credit, and enclose Schedule IT-20REC. The Section 179 deduction and that portion of investment expenses included in federal Schedule K, part of line 12, and line 17 relating to investment portfolio (royalty) income, flowing through to federal Schedule E, may be tentatively deducted. Do not deduct other expenses treated as federal itemized deductions. Use the Worksheet for S Corporation Distributive Share of Income, Deductions, and Credits to assist in this calculation. The income worksheet must be used if the corporation received any distributive income from an owned partnership interest, estate, or trust. See the worksheet on page 12. Indiana State Modifications, Lines 2a through 2f Enter any add-backs and deductions on lines 2a through 2f. Enter the name of the add-back/deduction, its 3-digit code, and its amount. Use a minus sign to denote negative amounts. Attach additional sheets if necessary. Adding Back Depreciation Expenses Several of the discontinued add-backs were created by timing differences between federal and Indiana allowable expenses. Following is an example of how to report a difference. Example. ABC Company has qualified restaurant equipment. For federal tax purposes, they use the accelerated 15-year recovery period for an asset placed in service in 2009. Since 2009, ABC Company has been adding back the depreciation expense taken for federal purposes that exceeded the amount allowable for Indiana purposes. The accumulated depreciation on such an asset through 2012 is, therefore, different for federal and state purposes. This difference will remain until the asset is fully depreciated or until the time of its disposition. So, in this example, the asset was acquired in January 2009 at a purchase price of $120,000. This normally would have a 25-year recovery period, but IRC Sec. 168 allows for a 15-year recovery period. Tax year 2012 is the last year ABC Company will have reported a qualified restaurant equipment add-back until the end of the 15-year recovery period. Schedule A — S Corporation Adjusted Gross Income Note: Please round all entries to the nearest whole dollar amount. Also, please do not use a comma in dollar amounts of four digits or more. For example, instead of entering “3,455” enter “3455.” If this asset was sold before being fully depreciated, the catch-up modification would be reflected in the year of the sale. However, if this property is held through 2023 (the 15th year of depreciation), ABC Company will report a negative $9,600 catch-up add-back on the 2023 state tax return. 7 The following add-backs and deductions should be entered on lines 2a through 2e: Indiana has adopted an expensing cap of $25,000. This modification affects the basis of the property if a higher Section 179 limit was applied. The federal increase to a $1,000,000 deduction was not allowed for purposes of calculating Indiana adjusted gross income. However, the $2,500,000 threshold for phase-out is allowed for purposes of calculating Indiana AGI. The depreciation allowances in the year of purchase and in later years must be adjusted to reflect the additional first-year depreciation deduction, including the special depreciation allowance for 100% bonus depreciation property, until the property is sold. Add-back for certain taxes deducted from federal AGI (3-digit code 100) All state taxes based on or measured by income levied by any state that were deducted on the federal return must be added back. Wagering taxes. The portion of wagering taxes required to be added back as a tax based on or measured by income is being reduced (phased out) each year for eight years. The percentage of taxes required to be added back is determined by the first date of the taxpayer’s taxable year, and is determined as follows: 2019 – 87.5% ; 2020 – 75%; 2021 – 62.5%; 2022 – 50%; 2023 – 37.5% 2024 – 25.0%; 2025 – 12.5%; 2026 and later – no add back required Note. The net amount determined for the net bonus depreciation or the IRC Section 179 add-back might be a negative figure (because of a higher depreciation basis in subsequent years). If it is, use a minus sign to denote that. (If the taxable income is a loss, this adjustment increases a loss when added back.) Enclose a statement to explain the adjustment. For example, Casino X remits $10,000,000 in riverboat wagering taxes in 2019. Individual owns 10% of Casino X. Individual’s share of Casino X’s income taxes is $1,000,000. Instead of individual adding back the full $1,000,000, Individual will add back $875,000. New. Special rules may apply if the Section 179 expensing is taken against property acquired in a like-kind exchange. See Information Bulletin #118 at www.in.gov/dor/3650.htm for additional information. Note. Income, losses and/or expenses from other schedules and forms may flow through to federal Schedules C, E and F. For example, partnership income from federal Schedule K-1 (Form 1065) may be included on federal Schedule E, while expenses from federal Form 8829 may be included on federal Schedule C. Make sure to check these schedules and forms for any deduction that needs to be added back. Deduction for interest on U.S. government obligations (3-digit code 610) Deduct interest income, less related expenses, from certain obligations of the U.S. government included as income on the federal return. A listing of eligible items is available in Information Bulletin #19 at www.in.gov/dor/3650.htm. Add-back for bonus depreciation (3-digit code 104) Add or subtract an amount attributable to bonus depreciation. Do this if it’s in excess of any regular depreciation allowed if the corporation did not elect under IRC Section 168(k) to have it applied to property in the year the property was placed into service. If property is owned, it is possible to have been allowed to take additional first-year special depreciation for qualified property in the current taxable year or an earlier taxable year. If this is the case, add or subtract an amount that makes the AGI equal the amount computed without applying any bonus depreciation. (The first-year special depreciation for qualified property includes 100% bonus depreciation.) Calculate the subsequent depreciation allowance on the state’s stepped-up basis until the property is disposed. Enclose a statement to explain the adjustment being made. Information Bulletin #118 (www. in.gov/dor/3650.htm) explains this initial required modification on the allowance of depreciation for state tax purposes. Note. Entries made on federal Form 8825 should also be considered when completing entries on line 2. Add-back for deferral of business indebtedness discharge and reacquisition (3-digit code 107) Add back the deduction for deferral of business indebtedness discharge and reacquisition. Enter an amount equal to the amount claimed as a deferral of income arising from business indebtedness discharged in connection with the reacquisition after Dec. 31, 2008, and before Jan. 1, 2011, of an applicable debt instrument (as provided in Section 108(i) of the IRC), for federal income tax purposes. If a deferred amount previously was added back, deduct the amount of deferred income recognized for federal purposes in the current period. Add-back of OOS municipal obligation interest (3-digit code 137) Interest earned from a direct obligation of a state or political subdivision other than Indiana (out of state, or OOS) is taxable by Indiana if the obligation is acquired after Dec. 31, 2011. Interest earned from obligations held or acquired before Jan. 1, 2012, is not subject to Indiana income tax and should not be reported as an addback. Note. Interest earned from obligations of Puerto Rico, Guam, Virgin Islands, American Samoa, or Northern Mariana is not included in federal gross income and is exempt under federal law. There is no add-back for interest earned on these obligations. For more information, see Information Bulletin #19 available at www.in.gov/dor/3650.htm. New. Special rules may apply if the bonus depreciation is taken against property acquired in a like-kind exchange. See Information Bulletin #118 at www.in.gov/dor/3650.htm for additional information. Add-back for Section 179 expense excess (3-digit code 105) Add or subtract the amount necessary to make the adjusted gross income of the taxpayer that placed any IRC Section 179 property in service in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed as if the federal limit for expensing under IRC section 179 was $25,000 as opposed to $1,000,000. 8 Federal Repatriated Dividend Deduction Add-Back (3-digit code: 139) Add back the deduction taken on the IRC 965 Transition Tax Statement, Line 3 using code 139. Line 4. Enter the Indiana apportionment percentage if the corporation has any multistate business activities. If apportioning income, enter the Indiana percentage (rounded to two decimal places) from line 9 of Schedule E, Apportionment of Income for Indiana. Do not enter 100%. See Schedule E instructions beginning on page 13. Report the addback to the beneficiaries using code 139 on Schedule IN K-1. For nonresident individuals, include only the apportioned amount of the addback. For more information, see Information Bulletin #12 available at www.in.gov/dor/3650.htm. Excess federal interest deduction modification (3-digit code 142) IRC Section 163(j) limits the federal interest deduction for most business interest to 30% of adjusted taxable income plus business interest. However, Indiana decoupled from this provision. Subtract an amount equal to the amount disallowed for federal purposes as a deduction for excess business interest in the year in which the interest was first paid or accrued. Add back any amount of excess taxable income (as defined in IRC Section 163(j)(4)(C)) determined at the entity level. Before continuing to lines 5 through 25, complete Schedule IN K-1 for each shareholder. Form IT-20S Schedule B — Tax on Excess Net Passive Income and Built-in Gains To the extent that the S corporation’s excess net passive income and built-in capital gains are subject to income tax under the Internal Revenue Code, the Indiana AGI tax is imposed on such income of the corporation derived from Indiana sources. Use the following guidelines to calculate the corporation’s tax liability. The corporation must make quarterly estimated tax payments if its Indiana tax liability exceeds $2,500. Government or Civic Group Capital Contribution Deduction (3-digit code: 633) Subtract any amount included in federal taxable income that are capital contributions from a government or civic group and not excluded under IRC Section 118. All references are from the federal forms. Use updated versions where applicable. Indiana Lottery Winnings Annuity Deduction (3-digit code 629) If a taxpayer receives proceeds from a winning Hoosier Lottery ticket for a lottery held prior to July 1, 2002, those proceeds may be deducted from the taxpayer’s Indiana adjusted gross income. This deduction applies only to prizes won from the Hoosier Lottery Commission; proceeds from other state lotteries or from other gambling sources, such as casinos, are not deductible. In addition, proceeds from winning Hoosier Lottery tickets for lotteries held after June 30, 2002, are not deductible. Line 5. Enter the excess net passive income or LIFO recapture tax reported on federal Form 1120S, line 22a. Line 6. Enter the tax from federal Schedule D reported on Form 1120S, line 22b. Line 7. Enter the lesser amount of the excess net passive income from line 7 or the taxable income from line 8, as calculated on the federal excess net passive income tax worksheet. Use the appropriate line from the latest federal update. Enclose the worksheet with the return. Note. Individuals or entities that have purchased Hoosier Lottery prizes from a winning ticket holder for valuable consideration are not eligible for this deduction. Line 8. Enter the net amount of line 18 from federal Schedule D, Part III, reduced by the portion of Section 1374 (b)(2) deduction, if any, from line 19 that is attributable to Indiana. If it is zero or less, enter 0 on line 8. Use the appropriate lines from the latest federal update. Enclose Schedule D (1120S) with the return. Infrastructure Fund Gift Deduction (3-digit code: 631) Shareholders or partners may be eligible to claim a deduction if a contribution has been made to a regional development infrastructure fund. Record the amount on lines 19 – 23 of the IN K-1. Filers should keep detailed records of the contribution as the department can ask filers to provide this information at a later date. Line 2f. Enter the total amount of add-backs and deductions from any additional sheets. If more than five add-backs and/or deductions are claimed, attach more sheets detailing them. Total the amounts from the additional sheets and enter it here. Use a minus sign to denote a negative amount. Line 10. If the taxable amount on line 9 is not or cannot be wholly allocated to Indiana, use the apportionment percentage from line 4 to attribute the business income to Indiana. Enclose Schedule E with the return. Multiply the amount on line 9 by the Indiana apportionment percentage on line 4. If apportionment of income is not applicable, enter the total amount from line 9. Line 12. Multiply the amount on line 10 by the corporate AGI tax rate, if not otherwise qualified for a reduced rate of tax. (Note: Refer to page 4 for information on how to calculate the tax rate for an entity whose tax year does not end on June 30.) 9 Qualified taxable income derived from a designated Indiana Military Base Enhancement Area (MBEA) is subject to tax at the rate of 5%. This tax rate is applicable to businesses that locate new operations in a completely or partially inactive or closed military base during the taxable year and the next succeeding four taxable years. Any property purchased free of tax using an exemption certificate or from out-of-state that is converted to a nonexempt use by the business is subject to the use tax at the time of conversion. Complete the Sales/ Use Tax Worksheet to compute any sales/use tax liability. For further information about use tax, call (317) 232-0129. If the S corporation qualifies as an MBEA taxpayer under IC 6-3-2-1.5, complete and enclose a copy of Schedule M, Alternate Adjusted Gross Income Tax Calculation. Note: A registered retail merchant for Indiana must report nonexempt purchases used in the Indiana business. This is reported on Form ST-103, ST103MP, or ST-103CAR, Indiana Annual, or Monthly Sales and Use Tax Voucher. If use tax is not paid by the original due date of the return, interest will be added to the amount due. A 10% penalty or $5, whichever is greater, is charged on each unpaid use tax liability. Also, check the appropriate box on question P if completing Schedule M, Alternate Adjusted Gross Income Tax Calculation. Schedule M is available in the IT-20 Indiana Corporate Income Tax Booklet found at www.in.gov/dor/6283.htm. On line 12, enter the total computed AGI tax based on the taxable income reported on line 10 of Schedule B. If the tax exceeds $2,500, enclose the completed Indiana Schedule IT-2220 to compute any underpayment of estimated tax penalty or to show an exception to the penalty. Caution: Do not report totals from Form ST-103 on this worksheet or on Form IT-20S. Line 13. Enter the use tax due from the Sales/Use Tax worksheet. Line 14. Enter the total tax liability of the nonresident members included in the Composite Adjusted Gross Income Tax Return, column F. Enclose Schedule Composite. Line 15. Add the tax shown on lines 12, 13, and 14. Summary of Calculations Sales/Use Tax IC 6-2.5-3-2 imposes a use tax at the rate of 7% on purchases of tangible personal property. This tax applies to the use, storage, or consumption of goods in Indiana that were purchased or rented in a retail transaction, wherever located, and sales tax was not paid. Examples of taxable items include: • Magazine subscriptions; • Office supplies; • Electronic components; and • Rental equipment. Line 16. Enter the total amount of pass-through withholding. (Enclose a copy of Schedule IN K-1 from the paying entity.) Do not take any credit for individual or separate estimated tax payments made by the shareholders. Line 17. Enter the total composite withholding payments from Form IT-6WTH. Amounts withheld from nonresident individual shareholders included in the composite return are remitted using Form IT-6WTH. Do not include the amount to be remitted with the filing of this return. Sales/Use Tax Worksheet List all purchases made during this year from out-of-state companies. Column B Column A Description of personal property purchased from out-of-state retailer Column C Date of purchase(s) Purchase Price Magazine subscriptions: Mail order purchases: Internet purchases: Other purchases: 1. Total purchase price of property subject to the sales/use tax .................................................................................... 1 2. Sales/use tax: Multiply line 1 by .07 (7%) .................................................................................................................. 2 3. Sales tax previously paid on the above items (up to 7% per item) ............................................................................ 3 4. Total amount due: Subtract line 3 from line 2. Carry to Form IT-20S, line 13. If the amount is negative, enter zero and put no entry on line 13 of Form IT-20S ............................................................................................................... 4 10 Line 18. Enter any other payments/credits belonging to the corporation. This may be estimated payments for passive income and built-in gains tax that was not otherwise passed through to the shareholders. A detailed explanation must be enclosed for any credits claimed on this line. If the corporation reported a liability on line 12 of the IT-20S and made a contribution eligible for the Indiana College Credit, check the “Corporation” box Form CC-40, Part I, and include the amount from Form CC-40, Part III, Line 5 as part of line 18. The corporation cannot pass the credit through to its shareholders and cannot use the credit to offset any part of its composite tax liability. Please include Form CC-40 with the IT-20S. Line 19. Enter the amount of Economic Development for a Growing Economy (EDGE) credit being claimed from line 19 of Schedule IN-EDGE. Enter only (1) the aggregate credit amounts from Schedule IN K-1s for the entity’s shareholders who are included on the composite return and (2) any credit amount that the corporation is claiming for itself as a refundable credit. The Schedule IN-EDGE must be completed and enclosed with the return. Otherwise, this credit will be denied. Line 20. Enter the amount of EDGE-R credit being claimed from line 19 of Schedule IN-EDGE-R. Enter only (1) the aggregate credit amounts from Schedule IN K-1s for the entity’s shareholders who are included on the composite return and (2) any credit amount that the corporation is claiming for itself as a refundable credit. The Schedule IN-EDGE-R must be completed and enclosed with the return. Otherwise, this credit will be denied. Line 21. Enter the total amount of credits claimed from Schedule IN-OCC, and enclose Schedule IN-OCC with the return. Otherwise, these credits will be denied. If filing this schedule with Form IT-20S, only reflect the credit amounts from Schedule IN K-1s on behalf of the entity’s shareholders who are included on the composite return. Do not include credits from Schedule IN K-1s that belong to shareholders who are not included on the composite return. Enter the combined pro rata credits on one line of the IN-OCC; do not enter a line for each composite member. The total amount of credit for the members on the composite return cannot exceed the entity’s total tax due. In addition, sales and use tax cannot be offset by these nonrefundable credits if included in the total tax due. If an income tax return is being filed by a shareholder included on the Schedule Composite, the member should use the 4-digit code provided on Schedule IN K-1 not the 3-digit code utilized on the S Corporation income tax return. Line 22. Subtract lines 16 through 21 from line 15. If a balance due remains, proceed to lines 23 through 25. Line 23. Enter the total interest due. Caution: Two separate calculations of interest and penalty may be required: • Interest is computed on the net amount of composite tax, on line 22, paid after the 15th day of the 4th month following the end of the corporation’s taxable year. Interest is calculated from the day following the due date for payment of the composite tax to the actual date the balance is paid with Form IT-20S. • Interest on the use tax and Schedule B tax is calculated on the remaining amount of tax on line 22 that is paid after the original due date of Form IT-20S. For the current rate, call the department at (317) 232-0129 or see Departmental Notice #3 available at www.in.gov/dor/3618.htm. Line 24. Enter the total penalty due. The penalty for late payment is 10% of the amount (but not less than $5) of any composite tax due on line 22 paid after the 15th day of the 4th month following the end of the corporation’s taxable year. If a composite tax is due because of a failure to withhold on income distributions to nonresident shareholders, a penalty of 20% is added. (See the previous caution for line 23.) The penalty is still due on those taxes paid after the original due date of the return. This penalty equals the greater of $5 or 10% of the amount of the use tax and the Schedule B tax on line 22. If a return showing no liability on line 15 is filed late, the penalty for failure to file by the due date is $10 per day the return is past due, up to a maximum of $250. If the tax on line 22 exceeds $2,500, add any underpayment of estimated tax penalty computed on Schedule IT-2220 or enclose a completed schedule to show exception to this penalty. In addition, a separate $10 penalty is assessed on each Schedule IN K-1 information return that is late. Note. No penalty is due on composite withholding tax if at least 80% of the withholding tax for the current year, or 100% of the prior year’s withholding tax is remitted by the 15th day of the 4th month following the end of the tax year. Penalty is applicable if all remaining tax and interest due is not paid by the extended due date. Line 25. A penalty of $500 is assessed to any S corporation that fails to file a composite return for all of its nonresident shareholders (PL 211-2007 SEC. 27, 44, 58). If the S corporation fails to include all nonresident shareholders on the composite return, remit that penalty here. Line 26. If line 22 is greater than zero, add lines 22 through 25 and enclose a separate remittance for the total amount owed for each Form IT-20S filed. Payment to the Indiana Department of Revenue must be made in U.S. funds. Line 27. If the total of lines 16 through 21 exceeds line 15, subtract lines 23 through 25 from line 22. If the result is less than zero, this is the net overpayment. Note. If penalties and interest are due because of delinquent filing or payment, the overpayment must be reduced by these charges. If the result is a balance due, enter the difference on line 26. An S corporation’s overpayment credit may not be carried over to the following year; any overpayment amount will be refunded. 11 Worksheet for S Corporation Distributive Share Income, Deductions, and Credits Use this worksheet to compute the entry for line 1 of Form IT-20S and to assist in computing amounts reportable on or for Schedule IN K-1. Enter the total distributive share of income from each item reportable on Form 1120S, Schedule K. Do not complete column B and C entry lines unless the corporation received distributive share or tiered income from other entities. A. B. C. S Corporation Distributions from Distributions Income Partnerships/ Attributed to All Sources Estates/Trusts Indiana Distributive Share Amounts: S Corporation's Distributive Share of Items 1. 2. 3. 4. 5a. 6. 7. 8. 9. 10. Ordinary business income (loss)...................................................... Net rental real estate income (loss) ................................................ Other net rental income (loss).......................................................... Interest income................................................................................. Ordinary dividends........................................................................... Royalties.......................................................................................... Net short-term capital gain (loss) .................................................... Net long-term capital gain (loss) ..................................................... Net IRC Section 1231 gain (loss) .................................................... Other income (loss).......................................................................... Less allowable deductions for state tax purposes: 11. IRC Section 179 expense deduction............................................ 12A. Portion of expenses related to investment portfolio income, including investment interest expense and other (federal non-itemized) deductions............................................................. Enter below for line 13B total distributive share income received by the corporation from all non-unitary partnerships, estates, and trusts. Enter for line 14B an amount equal to required state modifications for Indiana Adjusted Gross Income. (See page 7 for instructions.) Enter below for line 13C total distributive share income received by the corporation from partnerships, estates and trusts that were derived from or allocated to Indiana. Enter on line 14C an amount equal to the Indiana modifications for Adjusted Gross Income attributed to Indiana. 12B. Other information from line 17 of federal K-1 related to investment interest and expenses not listed elsewhere............... 13. Carry total on line 13A to Form IT-20S line 1 on front page of return....................................................................................... 13A 13B 13C 14. Total of Indiana state modifications to distributive share income (see line 2f, Form IT-20S)........................................................................................... 14B 14C 15. Net Indiana adjusted gross income distributions from partnerships, estates, and trusts (add lines 13C and 14C)........................................................................... 15C 16. Enter amount of Indiana pass-through credits attributed from partnerships, estates, and trusts, if any......................................................................................................... 16C 12 Certification of Signatures and Authorization Section Sign, date, and print the corporation name on the return. If a paid preparer completes the return, authorize the department to discuss the tax return with the preparer by checking the authorization box above the line for the name of the personal representative. Personal Representative Information Typically, the department contacts the S corporation if there are any questions or concerns about the tax return. If the department can discuss the tax return with someone else (e.g., the person who prepared it or a designated person), complete this area. First, check the “Yes” box that follows the sentence “I authorize the department to discuss my tax return with my personal representative.” Next, enter: • The name of the individual designated as the corporation’s personal representative; and • The individual’s email address. If this area is completed, the department is authorized to contact the personal representative, instead of the corporation, about this tax return. After the return is filed, the department will communicate primarily with the designated personal representative for any matters concerning this return. Note: The authorization for the department to be in contact with your personal representative can be revoked at any time. To do so, submit a signed statement to the department. The statement must include a name, Federal Identification Number of the S corporation, and the year of the tax return. Mail the statement to Indiana Department of Revenue, P.O. Box 7206, Indianapolis, IN 46207-7206. Officer Information An officer of the organization must sign and date the tax return and enter the officer’s name and title. Please provide a daytime telephone number the department may call if there are any questions about the tax return. Also, provide an email address if contact via email is desired. Paid Preparer Information Fill out this area if a paid preparer completed this tax return. The paid preparer must sign and date the return. In addition, please enter the following: • The paid preparer’s email address; • The name of the firm the paid preparer is employed by; • The paid preparer’s PTIN (personal tax identification number). This must be the paid preparer’s PTIN; do not enter an FID or Social Security number; • The paid preparer’s complete address. Note. Complete this area even if the paid preparer is the same individual designated as the personal representative. Mailing Options If taxes are owed, please mail the completed return to: Indiana Department of Revenue P.O. Box 7205 Indianapolis, IN 46207-7205 If taxes are not owed, please mail the completed return to: Indiana Department of Revenue P.O. Box 7147 Indianapolis, IN 46207-7147 Instructions for Schedule E, Apportionment of Income for Indiana Complete the apportionment of income schedule whenever the corporation: • Has income derived from sources both within and outside Indiana; and • Has any nonresident shareholders. Note: Interstate transportation corporations should consult Schedule E-7 for details on apportionment of income. This schedule is available at www.in.gov/dor/6283.htm. Part I - Apportionment of Adjusted Gross Income Sales/Receipts: The sales factor is a fraction. The numerator is the total receipts of the taxpayer in Indiana during the tax year. The denominator is the total receipts of the taxpayer in all jurisdictions during the tax year. In the case of certain receipts, all or a portion of the receipts are not included. • For receipts includible under IRC section 965 or GILTI (IRC Section 951A), the amount included as a receipt is the amount included in adjusted gross income minus any amount claimed as a foreign source dividend under IC 6-3-2-12. • Receipts do not include deemed foreign dividends under IRC section 965 or GILTI. • For receipts from the sale of securities, including stocks, bonds, options, and future and forward contracts, only the net gain from the sale is treated as a receipt. • For receipts from hedging or similar transactions, only the net gain resulting from both sets of transactions is treated as a receipt. The numerator of the receipts factor must include the following to the extent included in the receipts numerator: • All sales made in Indiana; • All sales made from Indiana to the U.S. government; • All receipts from sales of business property in Indiana; and • All interest, dividend, or other intangible income earned in Indiana. 13 The numerator contains intangible income attributed to Indiana, including interest from consumer and commercial loans, installment sales contracts, and credit and debit cards as prescribed under IC 6-32-2.2. Total receipts include gross sales of real and tangible personal property less returns and allowances. Sales of tangible personal property are in Indiana if the property is delivered or shipped to a purchaser within Indiana regardless of the f.o.b. point or other conditions of sale. For tax years beginning on or after Jan. 1, 2016, Indiana no longer requires the inclusion of “throwback” sales in the numerator of the receipts factor. Sales or receipts not specifically attributed above shall be attributed as follows: • Gross receipts from the sale, rental, or lease of real property are in Indiana if the real property is located in Indiana; • Gross receipts from the rental, lease, or licensing of the use of tangible personal property are in Indiana if the property is in Indiana. If property was both within and outside Indiana during the tax year, the gross receipts are considered in Indiana to the extent the property was used in Indiana; • Interest income and other receipts from loans or installment sales contracts that are primarily secured by or deal with real or tangible personal property are attributed to Indiana if the security or sale property is located in Indiana; consumer loans not secured by real or tangible personal property are attributed to Indiana if the loan is made to an Indiana resident; and commercial loans and installment obligations not secured by real or tangible personal property are attributed to Indiana if the proceeds of the loan are applied in Indiana. • Interest income, merchant discounts, travel and entertainment credit card receivables, and credit card holder’s fees are attributed to the state where the card charges and fees are regularly billed. • Receipts from the performance of fiduciary and other services are attributed to the state where the benefits of the services are consumed. Receipts from the issuance of traveler’s checks, money orders, or United States savings bonds are attributed to the state where those items are purchased. • Receipts from investments are attributed to Indiana if the taxpayer’s commercial domicile is in Indiana. • Gross receipts from the performance of certain telecommunications and broadcast services are attributed to Indiana if the income-producing activity is in Indiana. If such activities are conducted partly within and partly outside Indiana, the gross receipts from the services are attributable to Indiana if the direct costs incurred in Indiana related to those receipts are greater than the direct costs incurred in any other state, unless the activities are otherwise directly attributed to Indiana according to IC 6-3-2-2.2 or IC 6-3-2-2(f). • Receipts from other services and other intangibles are attributed to Indiana if the benefit of the service or intangible is received in Indiana. Please see [regulations] for further information on whether the receipts from a particular transaction are attributed to Indiana. Sales to the United States Government: The United States government is the purchaser when it makes direct payment to the seller. A sale to the United States government of tangible personal property is in Indiana if it is shipped from an office, a store, a warehouse, or another place of storage in Indiana. See the previous rules for sales other than tangible personal property if such sales are made to the United States government. Other Gross Receipts: On line 6, report other gross business receipts not included elsewhere and pro rata gross receipts from all unitary partnerships, excluding from the factors the portion of distributive share income derived from a non-unitary partnership [45 IAC 3.1-1153(b)]. On line 7, report direct premiums and annuity considerations received during the taxable year for insurance upon property or risks in Indiana. The terms direct premiums and annuity considerations mean the gross premiums received from direct business as reported in the corporation’s annual statement filed with the Department of Insurance. Total Receipts: Complete all lines as indicated. Add all the receipts in Column A (lines 1A through 7A), and enter the total on line 8A. In addition, enter the total receipts from all jurisdictions on line 8B. Apportionment of Income for Indiana Divide line 8A by line 8B. Multiply by 100 to arrive at a percentage rounded to the nearest second decimal place. This is the Indiana apportionment percentage; carry it to the apportionment entry line on the return, line 4 on Form IT-20S. The completed Schedule E, Apportionment of Income, must be enclosed with the return. Part II - Business/Other Income Questionnaire Complete all applicable questions in this section. If income is apportioned, enclose the completed Schedule E, Apportionment of Income, with Form IT-20S. Instructions for Schedule Composite An S corporation that has any shareholders who are nonresidents of Indiana must file a composite return and include all its nonresident shareholders. A penalty of $500 will be assessed to any S corporation that fails to file a composite return that includes all nonresident shareholders required to be included. However, if a nonresident shareholder’s distributive share of income after modifications is a negative amount, the shareholder should not be included on the Schedule Composite. The composite return must be filed with and has the same due date as the S corporation return. If the Internal Revenue Service allows the S corporation an extension to file its income tax return, the due date for its Indiana return is automatically extended for the same period, plus 30 days. 14 Composite income means each nonresident shareholder’s distributive share of income derived from sources within Indiana as determined by the use of the apportionment formula described in IC 6-3-2-2(b) plus Indiana modifications. • Filing Requirements for Schedule Composite The following limitations and conditions apply to each shareholder included as a member in the composite return: • No deduction is permitted for carryover of net operating losses or capital losses; • No personal exemption is permitted; • No deduction is allowed for charitable contributions allowed or allowable pursuant to IRC Section 170; • No credit is permitted for taxes paid to other states; • No credit carryovers are permitted (except for those on Schedule IN-OCC); and • All other credits that flow through to shareholders on a pro rata basis are limited to the shareholder’s state income tax liability. See the list of Pass-through Tax Credits for more information. An S corporation filing a composite return is liable not only for the tax shown on the return. It is also liable for any additional tax, interest, and penalty as a result of a subsequent audit or examination. The S corporation should send a copy of the general Indiana filing requirements to each nonresident shareholder. Instructions for Completing Schedule Composite List the name of each nonresident shareholder. Subject to the limitations and conditions specified in the filing requirements, separately compute the state tax liabilities on the composite return attributable to each nonresident shareholder. Note: The name of all nonresident individuals of reverse credit agreement states who are subject to and pay income taxes at rates equal to or greater than Indiana’s individual income tax rate to the resident states must be listed on the Schedule Composite, but with the amount of withholding tax/credit for these shareholders listed as zero. Column A. Enter the apportioned distributive income attributed to Indiana from Schedule IN K-1. Column B. Enter the Indiana modifications from Schedule IN K-1. Column C. The amount of adjusted gross income for each shareholder is the apportioned distributive income plus the Indiana modifications (column A + column B). Column D. Multiply the adjusted gross income by the individual tax rate. Second, the business must have income from the individual’s county of principal employment or business during that year. If a business has income from more than one Indiana county, only the portion derived from the individual’s county of principal employment or business is subject to Indiana county income tax. To determine what portion of the income is derived from a county, the business shall apportion its Indiana adjusted gross income across counties based on the receipts derived from each county. In the case of an individual whose only Indiana activity is owning an interest in the entity, do not enter an amount for county tax for that individual. New. Notwithstanding any other requirement, a nonresident individual who is subject to Indiana county income tax on Schedule Composite (Column E) is required to file a nonresident individual income tax return, Form IT-40PNR, to report all sources of Indiana income. Note. If the nonresident owner is also employed by the business, the business shall use the county reported on the owner/employee’s WH-4
More about the Indiana IT-20S Booklet Corporate Income Tax Tax Return
We last updated the Current Year S Corporation Income Tax Booklet with Forms and Schedules in March 2020, and the latest form we have available is for tax year 2019. This means that we don't yet have the updated form for the current tax year. Please check this page regularly, as we will post the updated form as soon as it is released by the Indiana Department of Revenue. You can print other Indiana tax forms here.
Related Indiana Corporate Income Tax Forms:
|Form Code||Form Name|
|IT-20S Form||Current Year S Corporation Income Tax Forms and Schedules|
Indiana usually releases forms for the current tax year between January and April. We last updated Indiana IT-20S Booklet from the Department of Revenue in March 2020.
IT-20S Booklet is an Indiana Corporate Income Tax form. Like the Federal Form 1040, states each provide a core tax return form on which most high-level income and tax calculations are performed. While some taxpayers with simple returns can complete their entire tax return on this single form, in most cases various other additional schedules and forms must be completed, depending on the taxpayer's individual situation, to create a complete income tax return package.
About the Corporate Income Tax
The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.
Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).
Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.
Historical Past-Year Versions of Indiana IT-20S Booklet
We have a total of nine past-year versions of IT-20S Booklet in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
While we do our best to keep our list of Indiana Income Tax Forms up to date and complete, we cannot be held liable for errors or omissions. Is the form on this page out-of-date or not working? Please let us know and we will fix it ASAP.