GENERAL INSTRUCTIONS - Louisiana
Page 14 • Department of Revenue CIFT-620 Instructions REPORT OF FEDERAL ADJUSTMENTS La. R.S. 47:287.614C requires every taxpayer whose federal return is adjusted to furnish a statement disclosing the nature and amounts of such adjustments within 60 days after the adjustments have been made and accepted. This statement should accompany the amended return. DECLARATION OF ESTIMATED TAX La. R.S. 47:287.654 requires every corporation that can reasonably expect its estimated income tax for the year to be $1,000 or more to make installment payments of its liability. The term “estimated tax” means the amount the taxpayer estimates to be the Louisiana income tax imposed for the period less the amount it estimates to be the sum of any credits allowable against the tax. See the instructions pertaining to Form CIFT-620ES for further information, including the addition to the tax for underpayment or nonpayment of estimated income tax. ROUNDING TO WHOLE DOLLARS Round cents to the nearest whole dollar on Page 1 of Form CIFT-620. Total prepayments, including any credit carried forward from last year, should also be rounded to the nearest whole dollar. ALLOCATION AND APPORTIONMENT OF NET INCOME AND FRANCHISE TAXABLE BASE The Louisiana income tax is imposed only upon that part of the net income of a corporation that is derived from sources within Louisiana. Corporations that do business outside of Louisiana must complete Form CIFT-620A, which provides schedules for the apportionment and allocation of net income. When a corporation does business within and without Louisiana, the Louisiana franchise tax is imposed only on that part of the total taxable capital that is employed in Louisiana. Such corporations must also complete Form CIFT-620A, which provides schedules for the allocation of the franchise taxable base. INSTRUCTIONS FOR COMPLETING FORM CIFT-620 ALL TAXPAYERS ARE REQUIRED TO ANSWER LINES A-I. LINE 1A – LOUISIANA NET INCOME Information regarding the computation of Louisiana net income is provided in the instructions for Schedule D of Form CIFT-620 and Schedule P of Form CIFT-620A. Enter on this line the amount from Schedule D, Line 14 or Schedule P, Line 33. LINE 1B – S CORPORATION EXCLUSION La. R.S. 47:287.732.B provides an S corporation with an exclusion of its Louisiana net income. The exclusion is determined by multiplying Louisiana net income by a ratio calculated by dividing the number of issued and outstanding shares of the S corporation’s capital stock owned by Louisiana residents on the last day of the S corporation’s taxable year by the total number of issued and outstanding shares of capital stock on the last day of the S corporation’s taxable year. A Louisiana “resident” includes resident estates and trusts and resident and nonresident individual shareholders who have filed a correct and complete Louisiana income tax return and paid the tax due. This ratio is also applicable to a Louisiana net loss to exclude a percentage of the loss from carryback or carryforward treatment. A SCHEDULE SHOWING THE CALCULATION OF THE EXCLUSION MUST BE ATTACHED TO THE RETURN. This schedule must include a list of all shareholders of the corporation, designating those who report the S corporation income on a Louisiana tax return. The shareholder information must include the address and Social Security Number, the number of shares held on the last day of the taxable year, and the amount of the distributive share of S corporation net income for each shareholder. LINES 1C and 1D – NET OPERATING LOSS CARRYFORWARD OR CARRYBACK To apply for a tentative refund resulting from the carryback of a net operating loss, use Form R-6701, CIT-624 (Request for a Tentative Refund Resulting from the Election to Carryback a Net Operating Loss). The amount of net loss may be carried back to each of the three taxable years that precede the taxable year of such loss and/or forward 15 years immediately following the year in which the loss occurred. A net operating loss generated after a reorganization cannot be carried back to a corporation that does not survive the reorganization. See R.S. 47:287.86(I). In the case where a federal tax refund or credit arises from the carryback or carryforward of a federal net operating loss, the Louisiana net operating loss must be reduced by the amount of the federal tax refund or credit that applies to the federal income tax deducted on the prior Louisiana return. In calculating the federal tax refund applicable to the loss, consideration must be given to the total federal refund or credit received from all prior periods, including the refund or credit resulting from the investment tax credit carryback. The amount of the refund or credit applicable to Louisiana is determined by multiplying the total refund or credit by a ratio obtained by dividing the federal tax deducted on the original Louisiana return by the total federal tax on the original federal tax return. In the event that there is no carryback or carryforward of a net operating loss for federal purposes, then as provided in La. R.S. 47:287.83, the federal income tax deduction should be recomputed to reflect the carryback or carryforward of the net operating loss. The net operating loss carryback or carryforward should be used to reduce the Louisiana taxable income prior to the calculation of the ratio of Louisiana net income on a federal basis to federal net income in the computation of the federal income tax deduction. A SCHEDULE SHOWING THE CALCULATION OF THE LOSS CARRYFORWARD OR LOSS CARRYBACK MUST BE ATTACHED TO THE RETURN. LINE 1E – FEDERAL INCOME TAX DEDUCTION The amount of federal income tax to be deducted is that portion levied on the income derived from sources in this state. To compute the federal income tax deduction allowable on the Louisiana return, refer to the worksheet and instructions provided on Page 23. LINE 2 – LOUISIANA INCOME TAX The amount of Louisiana income tax is computed on Schedule E on Page 3 of Form CIFT-620. In the case of a return for part of the year, other than the initial or final return, for purposes of computing the tax due, Louisiana taxable income shall be placed on an annual basis by multiplying the amount thereof by twelve and dividing by the number of months included in the period for which the short period return is required or permitted. The tax on this annualized income is then computed and multiplied by a fraction. The numerator of the fraction is equal to the number of months included in the period for which the short period return is being filed, and the denominator is twelve. This tax is then entered on Line 2 of Page 1 of Form CIFT-620. LINE 3 – NON REFUNDABLE CREDITS See Nonrefundable Tax Credits, Page 15.
CIFT-620 (01-03) Department of Revenue • Page 15 Non-refundable Tax Credit Index Please view complete document at: www.rev.state.la.us/upforms/TaxCreditsExemptionandExclu.pdf Description/Legal Citation Corporation Franchise Income Tax Tax Credit for contributions of tangible property of a sophisticated and technological nature to educational institutions R.S. 47:287.34 & 47:287.755 Credit for converting vehicles to alternative fuels usage R.S. 47:287.757 Bone marrow donor expenses credit R.S. 47:287.758 Credit for the employment of certain first-time drug offenders R.S. 47:287.34 & 47:287.752 Credit for employment in a qualified motion picture production R.S. 47:1125.1 Credit for employment of the previously unemployed R.S. 47:6004 Credit for the purchase of qualified recycling equipment R.S. 47:6005 Credit for investments in state certified motion picture productions R.S. 47:6007 Credit for donations to assist qualified playgrounds R.S. 47:6008 Louisiana basic skills training tax credit R.S. 47:6009 Research and development credit R.S. 47:6015 New markets credit R.S. 47:6016 Credit for debt issuance costs R.S. 47:6017 Credit for rehabilitation of historic structures R.S. 47:6019 Louisiana capital companies credit R.S. 51:1924 Credit for cash donations to the dedicated research investment fund R.S. 51:2203 Credit for insurance company premium tax R.S. 47:227 Credit for new jobs R.S. 47:34, 47:287.34 & 47:287.749. A schedule showing the calculation of the credit must be attached to the return and must include the following information: 1. Name, address, and Social Security Number of each new employee; 2. Highest number of full-time and qualified part-time employees during the previous year; 3. Highest number of full-time and qualified part-time employees during the current year; • • • • • • • • • • • • • • • • • • • • • • • • • • • 4. Number of new employees hired for new jobs created during this taxable year; and 5. Amount of credit carried forward from the previous year. Credit for neighborhood assistance R.S. 47:35, 47:287.34 & 47:287.753 Credit for refunds by utilities R.S. 47:265 & 47:287.664 Credit for hiring eligible re-entrants R.S. 47:287.748 Credit for donations to public schools R.S. 47:6013 Atchafalaya trace heritage area development zone tax exemption R.S. 25:1226.4 Biomedical Research and Development Park* R.S. 46:813.1 & 17:3389 Tax Equalization* R.S. 47:3202 Manufacturing Establishments* R.S. 47:4305 Enterprise Zone* R.S. 51:1787 Quality Jobs Program* R.S. 51:2455 • • • • • • • • • • • • • • • • * Tax exemption contracts. The Department of Economic Development with the approval of the Governor may enter into contracts that provide certain tax credits or exemptions. The specific benefit depends on the contract.