Wisconsin ~ Corporate, Personal Income Taxes: Composite Return E-Filing, Partnership Apportionment, Other Topics Discussed

CCH Tax Day Report

The Wisconsin Department of Revenue has issued a tax bulletin that discusses a variety of personal income and corporation franchise and income tax topics, including the electronic filing requirement for composite returns and apportionment for partnerships and partners. The bulletin also discusses previously reported legislation that changed the state’s partnership and corporation franchise and income tax return due dates (TAXDAY, 2017/03/13, S.22) and includes a private letter ruling that addresses how commission expenses paid to, and dividend income received from, an Interest Charge-Domestic International Sales Corporation (IC-DISC) are treated when computing the manufacturing and agriculture credit.

Electronic filing for composite returns: For tax years beginning on or after January 1, 2017, Form 1CNP and Form 1CNS are no longer accepted if filed on paper. These forms must be filed electronically (e.g., using My Tax Account or Modernized e-File (MeF)).

Apportionment for partnerships and partners: A multistate partnership will generally use Form A-1 or Form A-2 to determine the portion of income attributable to Wisconsin. The information the partnership provides to its partners on Schedule 3K-1 to report their share of income will depend on the type of partner.

A partner that is a nonresident individual reports his or her share of the partnership income after apportionment. The partnership reports this amount in column (e) on Schedule 3K-1.

A partner that is a C corporation reports its share of income, before apportionment, from the partnership. The partnership reports this amount in column (d) of Schedule 3K-1. The partnership must also report the corporation’s share of the partnership’s apportionment factors in Part IV of Schedule 3K-1. The corporation combines the amounts from Part IV with its own apportionment factors on its Form A-1 or Form A-2.

A partner that is a partnership or S corporation reports its share of income, before apportionment, from the partnership. The partnership reports this amount in column (d) of Schedule 3K-1. The partnership must also report the partner’s share of the partnership’s apportionment factors in Part IV of Schedule 3K-1. The partnership or S corporation partner combines the amounts from Part IV with its own apportionment factors on its Form A-1 or Form A-2.

Subscribers can view the bulletin.

Tax Bulletin 197

Tax Bulletin 197, Wisconsin Department of Revenue, April 2017

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