www.intax.in.gov SP 259 (R7/9-08) American LegalNet, Inc. www.FormsWorkflow.com Contents Page What’s New for 2008?......................................................................................................................................................... 3 . Legislative Changes to Adjusted Gross Income Tax for 2008........................................................................................ 3 Legislative Changes to Tax Liability Credits for 2008.................................................................................................... 4 . Other Changes to Adjusted Gross Income Tax Starting in 2008.................................................................................. 4 Administrative Highlights.................................................................................................................................................. 4 Introduction to Corporate Taxation ................................................................................................................................ 4 How do I register?............................................................................................................................................................... 6 Business Entities.................................................................................................................................................................. 6 Other Related Income Tax Filing Requirements of a Corporation............................................................................ 10 General Filing Requirements for Form IT-20............................................................................................................... 11 Instructions for Completing Form IT-20....................................................................................................................... 14 Computation of Adjusted Gross Income Tax................................................................................................................ 15 Specific Instructions for Completing IT-20 Schedule F............................................................................................... 19 Apportionment of Income for Entity with Multistate Activities................................................................................ 20 . Instructions for IT-20 Schedule E Apportionment of Adjusted Gross Income........................................................ 20 Addition of Allocated and Previously Apportioned Income to Indiana.................................................................... 23 Deduction from Indiana Adjusted Gross Income........................................................................................................ 23 . Tax Calculation.................................................................................................................................................................. 23 Nonrefundable Tax Liability Credits.............................................................................................................................. 23 Credit for Estimated Tax and Other Payments............................................................................................................. 24 Balance of Tax Due or Overpayment.............................................................................................................................. 25 Certification of Signatures and Authorization Section................................................................................................ 26 Personal Representative Information............................................................................................................................. 26 Paid Preparer Information............................................................................................................................................... 26 Mailing Options................................................................................................................................................................. 26 Schedule M - Alternate Adjusted Gross Income Tax Calculation.............................................................................. 27 Return Pages 1-2 Form IT-20 - Indiana Corporate Adjusted Gross Income Tax Return Page 3 IT-20 Schedule E - Apportionment of Income for Indiana Return Page 4 IT-20 Schedule PIC - Disclosure of Intangible Expense and Directly Related Intangible Interest Expense Schedule H - Additional Explanation or Adjustment of Items Elsewhere on Return Foreign Source Dividends Deduction Worksheet IT-20 Schedule CC-20 - College and University Contribution Credit Return Pages 5-6 IT-20 Schedule F - Allocation of Non-business Income and Indiana Non-unitary Partnership Income Schedule IT-2220 - Penalty for Underpayment of Corporate Income Tax Instructions for Schedule IT-2220 for 2008 Sales/Use Tax Worksheet.................................................................................................................................................. 36 Instructions for Schedule IT-20NOL.............................................................................................................................. 37 Schedule IT-20NOL - Corporate Income Tax - Indiana Net Operating Loss Deduction Other Credits..................................................................................................................................................................... 41 About Other Tax Liability Credits.................................................................................................................................. 42 . Special Reminders............................................................................................................................................................. 48 2 American LegalNet, Inc. www.FormsWorkflow.com What’s New for 2008? Legislative Changes to Adjusted Gross Income Tax for 2008 Qualified Patents Income Exemption PL 223-2007 SECTIONS 1, 2 and 11 amends IC 6-3-1-3.5 and adds IC 6-3-2-21.7, effective Jan. 1, 2008. Income from qualified patents included in federal taxable income is exempt from the adjusted gross income of corporations and insurance companies for taxable years beginning after Dec. 31, 2007. References to the Internal Revenue Code Public Law (PL) 131-2008, SEC. 12 amended Indiana Code (IC) 6-3-1-11. The definition of adjusted gross income is updated to correspond to the federal definition of adjusted gross income contained in the Internal Revenue Code (IRC). A qualified patent is a utility patent or a plant patent issued after Dec. 31, 2007, for an invention resulting from a development process conducted in Indiana. The term does not include a design patent. A qualified taxpayer is either a nonprofit organization that is domiciled in Indiana or an individual or a corporation with fewer than 500 employees that is domiciled in Indiana. The exemption from income includes licensing fees or other income received for the use of the patent, royalties received for the infringement, receipts from the sale of a qualified patent, and income from the taxpayer’s own use of the patent to produce the claimed invention. For tax year 2008, any reference to the IRC and subsequent regulations means the Internal Revenue Code of 1986, as amended and in effect on Jan. 1, 2008. Second Year Phase-in of Single-Factor Sales Formula for Apportionment of Income PL 162-2006 amended IC 6-3-2-2 to transition to a singlefactor formula based on sales for apportioning business income of corporations and nonresident persons. The total value of the property and payroll factors shall be gradually diminished in each of the succeeding taxable years until 2011. The total amount of exemptions claimed by a taxpayer in a taxable year may not exceed $5 million. The exemption may not be claimed for more than 10 years. For the first 5 years, 50 percent of the amount of income received from the patent is exempt; the percentage declines by 10 percent each year starting in the sixth year that the exemption is claimed (the percentage for both year 9 and year 10 is 10 percent). Get Income Tax Information Bulletin #104 at www.in.gov/dor/3650.htm for more information. For taxable years beginning in 2008, the numerator of the apportionment formula shall be the sum of the property factor plus the payroll factor plus the product of the sales factor multiplied by 4.67 and the denominator shall be 6.67. For more information, get Income Tax Information Bulletin #12 at www.in.gov/dor/3650.htm Add Back Dividends from Captive Real Estate Investment Trust Changes to Estimated Tax Filing Requirements PL 211-2007 SECTIONS 19, 20 and 55 amended IC 6-3-1-3.5 and added IC 6-3-1-34.5, effective Jan. 1, 2008. Corporations are required to add back any deduction for dividends paid to shareholders of a captive real estate investment trust for taxable years beginning after Dec. 31, 2007. For taxable years beginning after Dec. 15, 2007, a corporation is not required to file quarterly estimated payments if its annual unpaid liability is less than $2,500. The previous limitation was $1,000. A captive real estate investment trust is defined as a corporation, a trust, or an association that: • Is considered a real estate investment trust under Section 856 of the Internal Revenue Code; • Is not regularly traded on an established securities market; and • In which more than 50 percent of the voting power, beneficial interests, or shares is owned or controlled by a single entity. PL 211-2007 SECTIONS 24 and 53 amended IC 6-3-4-4.1, effective Dec. 16, 2007, changes a corporation’s filing requirements for making estimated tax payments. Corporations required to make quarterly estimated payments are permitted to use the annualized income installment method calculated in the manner provided by IRC Section 6655(e) as applied to the corporation’s adjusted gross income tax liability. If you use the annualization method, enclose your calculations with your return for our review. The term does not include a corporation, a trust, or an association in which more than 50 percent of the entity’s voting power, beneficial interests, or shares is owned by a single entity that is owned or controlled, directly or constructively, by: The threshold for making electronic file transfer (EFT) payments for corporate estimated taxes is reduced from $10,000 to $5,000. Go to www.in.gov/dor/3650.htm to get Income Tax Information Bulletin #11 for more information. • A corporation, a trust, or an association that is considered a real estate investment trust under Section 856 of the Internal Revenue Code; • A person exempt from taxation under Section 501 of the Internal Revenue Code; or 3 American LegalNet, Inc. www.FormsWorkflow.com  • A real estate investment trust that: • Is intended to become regularly traded on an established securities market; and • Satisfies the requirements of Section 856(a)(5) and Section 856(a)(6) of the Internal Revenue Code under Section 856(h) of the Internal Revenue Code. Please have the following information available: • Name • Taxpayer Federal Tax ID or Employer Identification Number (EIN) • Current street address • Last payment amount Legislative Changes to Tax Liability Credits for 2008 View by clicking on Begin using IN e-pay at: www.in.gov/dor/epay/3727.htm If you have any questions, please call the Department at (317) 233-4017. Other Changes to Adjusted Gross Income Tax Starting in 2008 For a complete summary of new legislation regarding taxation, please see the 2008 Summary of State Legislation Affecting the Department of Revenue at www.in.gov/dor/3656.htm Voluntary Compliance Program If you discover that you have an unmet filing requirement with Indiana and want to know more about the Department’s Voluntary Disclosure Program, contact us at: Ethanol Production Tax Credit to Include Credit for Cellulosic Ethanol PL 175-2007 SECTION 3 and 23 amended IC 6-3.1-28-11, effective for tax years beginning after Dec. 31, 2007. It allows an additional ethanol production tax credit to taxpayers who produce at least 20 million gallons of cellulosic ethanol in a taxable year. The credit may be applied only against the state tax liability attributable to business activity taking place at the Indiana facility at which the cellulosic ethanol was produced. Get Income Tax Information Bulletin #93 for more information (www.in.gov/dor/3650.htm). Indiana Department of Revenue IGCN Room 203 - VCP Office 100 N. Senate Ave. Indianapolis, IN 46204 Revised Forms for 2008 • • The application for Ethanol Credit Certification is through the Indiana Economic Development Corporation, One North Capitol, Suite 700, Indianapolis, IN 46204, or visit their Web site at: www.in.gov/iedc/ for additional information. Form IT-20 Schedule E, Schedule E-7 and EZ Schedule 1, 2, 3 are revised to continue the phase-in of the singlefactor apportionment. The Other Credits section for nonrefundable tax liability credits is reorganized with a specific identifying three-digit code for each credit. Introduction to Corporate Taxation Indiana has three kinds of corporate income tax: Administrative Highlights • • In accordance with the Indiana Taxpayer Bill of Rights, the Department will conduct an annual public hearing on Tuesday, June 2, 2009. Please come and share your ideas on how the Department of Revenue can better administer Indiana tax laws. The hearing will be held from 9 to 10 a.m. in the Indiana Government Center South, Conference Center - Room 32, 402 W. Washington St., Indianapolis, IN. If you can’t attend, please submit your concerns in writing to: Indiana Department of Revenue, Commissioner’s Office, 100 N. Senate Ave., Indianapolis, IN 46204. View Estimated Payments Online and Make Payments by ePay Indiana imposes a franchise tax on income of an entity transacting the business of a financial institution in this state. Taxpayers subject to the financial institution tax are exempt from the adjusted gross income tax. • Annual Public Hearing A corporation doing business in Indiana is subject to the adjusted gross income tax. Any corporation deriving income from Indiana sources is subject to the adjusted gross tax. Any corporation providing utility services in Indiana is subject to the utility receipts tax. Tax is imposed on the gross receipts received from selling utility services. Indiana recognizes a variety of business organizations. How the business is organized determines the type of tax return(s) it must file. It is important you know the tax-related requirements before setting up operations in Indiana. Corporate taxpayers may verify their state estimated tax payments and balances online. This feature saves time, helps to avoid delayed refunds, and identifies estimated discrepancies prior to filing. Visit www.in.gov/dor/epay/ to access your estimated tax information. 4 American LegalNet, Inc. www.FormsWorkflow.com General Filing Requirements Doing business by a corporate entity that is transacting the business of a financial institution in Indiana is similarly defined under IC 6-5.5-3-1. All types of corporations, business corporations, professional corporations, C corporations, and S corporations have essentially the same filing requirements. They may have different tax responsibilities, but they are still corporations. Any corporation doing business and having gross income in Indiana is required to file a corporation income tax return. It must file an income tax return regardless of whether it has taxable income, unless it’s exempt under IRC section 501. Deriving Income from Indiana Sources If a corporation has business income from both within and outside Indiana, the entity, other than a financial institution or domestic insurance company, must apportion its income by means of the three-factor formula under IC 6-3-2-2. Business income is all income that arises from the conduct of trade or business operations of the taxpayer. The nonbusiness income of a corporation is specifically allocated under IC 6-3-2-2(g) through (k). Nonprofit entities can be organized formally or informally. Contact the Internal Revenue Service for federal requirements to obtain nonprofit (commonly known as 501(c)(3)) status. The IRS publishes an information booklet titled “Tax Exempt Status for Your Organization,” Publication 557. Contact: Starting a New Business Indiana Formal business organizations require some filing with the Secretary of State, Corporations Division. It is strongly suggested that individuals consult an attorney before forming a formal business entity. Internal Revenue Service: (800) 829-1040 Publications: (800) 829-3676 www.irs.gov/ After a business entity has formed or been granted authority to do business in the state of Indiana, it has an ongoing responsibility to file regular business entity reports. These reports must be filed every year by nonprofit organizations and every two years by for-profit businesses. The filings are due during the anniversary month of the organization’s formation. To register your nonprofit status with the state, you must submit a Nonprofit Organization Application for Sales Tax Exemption (NP-20A). Contact: Indiana Department of Revenue Tax Administration 100 N. Senate Ave. Indianapolis, IN 46204-2253 (317) 232-2045 All organizational filings and reports for formal business entities should be sent to: Taxable Period Doing Business in Indiana Information Line and Front Desk Hours: 8:00 a.m. to 5:30 p.m., Monday through Friday (except state holidays) Indiana tax law requires all corporations to adopt their federal tax year for reporting income to Indiana. A federal entity election or default classification is recognized for state adjusted gross income tax. For Indiana adjusted gross income 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: 1. Maintenance of an office, warehouse, construction site or other place of business in Indiana. 2. Maintenance of an inventory of merchandise or material for sale, distribution or manufacture. 3. The sale or distribution of merchandise to customers in Indiana 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. 4. The rendering of a service to customers in Indiana. 5. The ownership, rental, or operation of business or property (real or personal) in Indiana. 6. Acceptance of orders in Indiana with no right of approval or rejection in another state. 7. Interstate transportation. 8. Maintenance of a public utility. Indiana Secretary of State, Business Services Division 302 W. Washington St., Room E018 Indianapolis, IN 46204 (317)-232-6576 www.in.gov/sos/business/corporations.html Need more detailed information pertaining to new businesses? Check out the general requirements for starting your own business in the Business Owner’s Guide to State Government. Registering with the Indiana Department of Revenue If you are starting a new business in Indiana, you may need to register with the Indiana Department of Revenue (IDOR). Registration is required if you will have employees and intend to engage in selling (retail or wholesale) and/or renting/leasing tangible personal property, etc. Companies registering for Indiana Withholding Tax must provide their Federal Employer Identification Number (EIN). If you indicate on your Business Tax Application (BT-1) that you will be collecting Indiana Gross Retail Sales Tax, you will be issued a Registered Retail Merchants Certificate (RRMC). An RRMC must be displayed at each location at which you are doing business. 5 American LegalNet, Inc. www.FormsWorkflow.com Register Multiple Locations: A company providing a service but that has no employees may not need to register. If you are unsure, please contact the Department at (317) 233-4015 for additional information. You must complete a separate BT-1 for each location you need to register. If you want to consolidate tax filings for all or some of your locations, you can complete Form BT-1C (Authorization for Consolidated Sales Tax Filing Number) within the BT-1 Packet. Sales Tax Exemption Certificates Registered retail merchants must assess Indiana sales tax on the sale of tangible personal property unless the customer presents the merchant with a valid exemption certificate. The exemption certificate is kept by the seller as part of its business records and sales invoices. It must be legible, be signed, and include the tax exempt number of the customer. Important Reminders: • To avoid delays in processing applications, please make sure all the applicable information is complete and the form is signed. • Please note that the application will be delayed if the business itself has any outstanding tax liabilities. • When you close your business, you are responsible for notifying the Department of the closure. Failure to do this can result in billings being issued for failure to file returns. The business registered as a retail merchant may issue an exemption certificate and purchase tangible personal property exempt from sales tax when the property is: • Purchased for resale; • Made into property being resold; • Directly used in the manufacturing of tangible personal property to be sold; or • Exempt by law. Business Entities (in General) Which Indiana Income Tax Form(s) to File? The type of form to file varies depending on how the corporation is organized and what type of income it earns. An organization filing a federal return and doing business in this state must also file the comparable Indiana return. The name of the corporation (which must include “Corporation,” “Company,” “Incorporated,” “Limited,” or an abbreviation thereof) must be included on all the returns. When filing your Indiana corporate forms, use your Federal Employer Identification Number (EIN) to identify your return. The IRS assigns this number to business entities who register for a federal identification number (EIN). How do I register? A single application (Form BT-1) is used to register with the Department for alcohol & tobacco tax, sales tax, withholding tax, food & beverage tax, county innkeeper’s tax, motor vehicle rental excise tax, and prepaid sales tax on gasoline. A separate application is required for each business location. Internet: If you need to register your business with the Department, you can register online using the Department’s Online BT-1 Application. Visit https://secure.in.gov/apps/dor/bt1 For Indiana tax purposes, a corporation tax filing includes other less formal organizations and unincorporated entities such as general partnerships and nonprofit associations. To find which return to file, use the following list that describes your organization. File the specified state form(s) to report the income, gains, losses, deductions, and credits and to figure your entity’s corporate income tax liability. INtax: Use Indiana’s free online business tax filing program to directly manage your sales and withholding tax accounts. Once your business is registered, you can use INtax to complete the registration process. With INtax, you can file and pay your business taxes and much more. At this time, you can manage your obligations for Indiana retail sales, out-of-state sales, prepaid and metered pump sales, tire fee sales, and payroll withholding taxes. The state returns are due 30 days after the due date for the filing of the federal return. Unless otherwise specified, the state tax returns are due on the 15th day of the fourth month following the close of the corporation’s taxable year. Paper: A corporation or entity doing business in Indiana is subject to the corporate adjusted gross income tax (AGIT). The corporate AGIT rate of tax is 8.5 percent. Certain entities are exempt from the tax. See IC 6-3-2-2.8 and 6-3-2-3.1. A brief explanation of the tax treatment for each type follows. You can complete the Form BT-1 application online and then print and sign your registration. Mail the completed application to: Indiana Department of Revenue Systems Services P.O. Box 6197 Indianapolis, IN 46206-6197 If you elect to mail Form BT-1, please allow approximately 4-6 weeks to complete the registration process. Request Form BT-1 to receive a blank application through the mail. Types of Corporate Entities & Returns to File For-Profit Corporations (Domestic and Foreign) A corporation can be formed for profit or nonprofit purposes. Forming a corporation creates a specific legal entity. An organization incorporated in this state (a domestic corporation) must have on file Articles of Incorporation 4159 with the Corporations Division of the Secretary of State. In Person: Visit our Taxpayer Service Center in the Indiana Government Complex or at any of the IDOR District Offices. Simply bring your completed BT-1 application for same-day service. 6 American LegalNet, Inc. www.FormsWorkflow.com An organization incorporated in another state or foreign government must have on file an Application for Certificate of Authority 38784 with the Indiana Secretary of State. This allows a foreign (outside Indiana) corporation to do business in Indiana. General or Regular Corporations Filing federal Form 1120, file: If meeting 80 percent income test as a financial institution: If a utility service provider, also file: State Return(s) to File Form IT-20, or Corporation (engaged in farming) Filing federal Form 1120, file: If a utility service provider, also file: State Return(s) to File Form IT-20 Form URT-1 A corporation that engages in farming and is reporting its income and deductions on federal Form 1120 or 1120-A must file Form IT-20. Form FIT-20; Form URT-1 The state tax return(s) is due on the 15th day of the fourth month following the close of the corporation’s tax year. Bank holding companies, regulated financial corporations, and subsidiaries of these entities (as defined in IC 6-5.5-1-17) are subject to the financial institutions tax (FIT). In addition, if 80 percent or more of the taxpayer’s gross income comes from extending credit, servicing loans, or a credit card operation, the FIT applies. See IC 6-5.5-1-17(d) and 45 IAC 17-2-4. You can also get Commissioner’s Directive #14 at www.in.gov/dor/3617.htm for more information. Domestic Corporation State Return(s) to File Form IT-20 Form URT-1; Filing federal Form 1120, file: If a utility service provider, also file: If a financial institution (80 percent income test), file: Form FIT-20 The FIT rate of tax is the same as the AGIT rate of 8.5 percent. If the taxpayer is subject to the FIT, it is exempt from the AGIT (IC 6-5.5-9-4). It must instead file on Form FIT-20. An organization incorporated in this state is known as a domestic corporation for tax purposes. It is required to file an Indiana return to report taxable income if it is not otherwise exempt. Utility Service Provider: Are you in the business as a utility service? If so, you may also be subject to the utility receipts tax (URT) on those gross receipts. “Gross receipts” are defined as the value received for the retail sale of utility services. The state tax return(s) is due on the 15th day of the fourth month following the close of the corporation’s tax year. Exempt Organizations: (Refer to the section on Nonprofit Corporations) You will owe this tax if you furnish any electrical energy, natural gas, water, steam, sewage, or telecommunications services. The URT is due on the retail sale of these services in Indiana. The URT rate of tax is 1.4 percent. Refer to Commissioner’s Directive #18 for more information. Entities subject to this tax must also file Form URT-1. Forms for Specific Organizations Foreign Corporation Filing federal Form 1120, file: If a utility service provider, also file: If a financial institution (80 percent income test), file: State Return(s) to File Form IT-20 Form URT-1; Form FIT-20 State Return(s) to File Form IT-20 Form URT-1 An organization incorporated in another state or foreign government is known as a foreign corporation for Indiana tax purposes. It must have a Certificate of Authority to do business in Indiana. An Application for a Certificate of Authority is available from the Indiana Secretary of State or State Information Center. A cooperative association (including a subchapter T cooperative) that engages in farming and is reporting its income and deductions on federal Form 1120-C must file Form IT-20. If this applies to you, check box J-5 in the taxpayer identification section on the front of the return. A foreign corporation with authority to operate in Indiana (other than a life and property and casualty insurance company) generally must file its Indiana tax return on the Corporation Income Tax Return, Form IT-20. Cooperative Association Filing federal Form 1120-C, file: If a utility service provider, also file: The state tax return(s) is due on the 15th day of the fourth month following the close of the corporation’s tax year. If the cooperative is in the business of providing a utility service, it must also file Form URT-1 to report any retail sales of utility services to its nonmembers. Note: The utility receipts tax return is due on the 15th day of the fourth month following the close of the cooperative association’s taxable year. Foreign Sales Corporation (IRC section 922) Filing federal Form 1120-FSC, file: If a utility service provider, also file: The corporate adjusted gross return, Form IT-20, is due on the 15th day of the 10th month following the close of the cooperative association’s taxable year. The utility receipts return, Form URT-1, is due on the 15th day of the fourth month following the close of the association’s tax year. State Return(s) to to File Form IT-20 Form URT-1 A foreign corporation with authority to operate in Indiana generally must file its Indiana tax return on the Corporation Income Tax Return, Form IT-20. 7 American LegalNet, Inc. www.FormsWorkflow.com The state tax return(s) is due on the 15th day of the fourth month following the close of the corporation’s tax year. Homeowner’s Association (IRC section 831) Filing federal Form 1120-H, file: Organization 49459. An LLC based outside of Indiana must file an Application for Certificate of Authority of a Foreign Limited Liability Company to do business in Indiana, similar to what foreign corporations file. If the LLC qualifies under IRS guidelines to be treated as an association taxable as a corporation, it must file Form IT-20 or Form FIT-20, as appropriate. State Return(s) to File Form IT-20 The state tax return(s) is due on the 15th day of the fourth month following the close of the entity’s tax year. A condominium management, residential real estate management, or timeshare association is subject to tax as a corporation if it elects to be treated as a homeowners association. It is not considered a nonprofit organization for Indiana tax purposes. Therefore, it must file as a for-profit corporation using Form IT-20. Limited Liability Partnership (Domestic and Foreign) Filing federal Form 1065 or 1065B, file: Interstate Charge Domestic International Sales Corporation (IRC section 922) Filing federal Form 1120-FSC, file: If a utility service provider, also file: State Return(s) to File Form IT-20 Form URT-1 An LLP can be formed under state law by filing Articles of Registration of a Limited Liability Partnership with the Secretary of State. An LLP based outside of Indiana must file a Certificate of Authority or Notice of Foreign Limited Liability Partnership to do business in Indiana, similar to what foreign corporations file. State Return(s) to File Form IT-20 A domestic insurance company (organized under the laws of the state of Indiana) that elects to file the corporation income tax return, instead of the premium insurance tax return, must file on Form IT-20. It will be exempt from the insurance premium tax if it elects to pay the adjusted gross income tax. If this applies to you, check box J-4 in the taxpayer identification section on the front of the return. The state tax return(s) is due on the 15th day of the fourth month following the close of the entity’s tax year. Limited Partnership (Domestic and Foreign) Filing federal Form 1065 or 1065B, file: State Return(s) to File Form IT-65 Form IT-20 Form URT-1 Form FIT-20 Filing federal Form 1065 or 1065B, file: Filing federal Form1120, file: If a utility service provider, also file: If a financial institution, file: State Return(s) to File Form IT-65 Filing federal Form1120, file: If a utility service provider, also file: If a financial institution, file: The state corporate income tax return is due on the 15th day of the fourth month following the close of the corporation’s tax year. Limited Liability Companies (Domestic and Foreign) Form IT-20 Form URT-1 Form FIT-20 A Limited Liability Partnership (LLP) may be classified for federal income tax purposes as a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in Treas. Reg. 301.7701-3. The income of an LLP is taxed in the same manner as a general partnership is. The state tax return is due on the 15th day of the fourth month following the close of the corporation’s tax year. Life Insurance Company (Domestic) (IRC section 922) Filing federal Form 1120-H, file: Form IT-65 Filing federal Form1120, file: If a utility service provider, also file: If a financial institution, file: The state tax return is due on the 15th day of the fourth month following the close of the entity’s tax year. State Return(s) to File Form IT-20 Form URT-1 Form FIT-20 A limited partnership (LP) must have at least one general partner and one limited partner. The income is generally taxed in the same manner as a general partnership. An LP can be classified for federal income tax purposes as a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in Treas. Reg. 301.7701-3. A Limited Liability Company (LLC) may be classified for federal income tax purposes as a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in Treas. Reg. section 301.7701-3. An LLC has members rather than shareholders. If an entity with more than one member was formed as an LLC, it generally is treated as a partnership for federal income tax purposes and files Form 1065. A single-member LLC can elect to report its income and deductions as a corporate entity instead. The LLC can file a Form 1120 or Form 1120-A only if it has filed federal Form 8832, Entity Classification Election, to be treated as a corporation. An LLC may be formed under state law by filing Articles of The LP may be formed under state law by filing a Certificate of Limited Partnership with the Secretary of State. An LP based outside of Indiana must file a Certificate of Authority or Application of Registration to do business in Indiana, similar to what foreign corporations file. The state tax return(s) is due on the 15th day of the fourth month following the close of the entity’s tax year. 8 American LegalNet, Inc. www.FormsWorkflow.com  Nuclear Decommissioning Funds (IRC section 468A) Filing federal Form 1120-ND, file: If a financial institution, file: State Return(s) to File Form IT-20 Form FIT-20 The state tax return is due on the 15th day of the fourth month following the close of the fund’s taxable year. Personal Service Corporation (Domestic and Foreign) Filing federal Form 1120, file: Real Estate Investment Trust (IRC section 856) Filing federal Form 1120-REIT, file: If a financial institution, file: State Return(s) to File Form IT-20 Form FIT-20 A corporation, a trust, or an association that meets certain conditions under IRC section 856 can elect to be treated as a real estate investment trust (REIT) for the tax year by figuring its taxable income as a REIT on federal Form 1120-REIT. An entity filing as a REIT files Form IT-20 or FIT-20 to report business activity income in Indiana. State Return(s) to File Form IT-20 The state tax return for a personal service corporation, also known as a “professional corporation,” is due on the 15th day of the fourth month following the close of the corporation’s tax year. However, the deduction for dividends paid is not an allowable exclusion for the state return. A deduction for dividends included in federal taxable income is an add back on the state tax return effective for tax years beginning in 2008. Political Organization (IRC section 527) Filing federal Form 1120-POL, file: The state tax return is due on the 15th day of the fourth month following the close of the tax year. State Return(s) to File Form IT-20 The state tax return is due on the 15th day of the fourth month following the close of the organization’s tax year. Property and Casualty Insurance Company (Domestic) (IRC section 831) Filing federal Form 1120-PC, file: State Return(s) to File Form IT-20 The state corporate income tax return is due on the 15th day of the fourth month following the close of the corporation’s tax year. The state tax return is due on the 15th day of the fifth month following the close of the entity’s tax year. The entity’s final state return is due 30 days from the filing due date of Form 1066 following the date the REMIC ceased to exist. State Return(s) to File Form IT-65 Filing federal Form1120, file: If a utility service provider, also file: If a financial institution, file: State Return(s) to File Form IT-20 Form FIT-20 A corporation, partnership, trust, or entity that meets certain conditions under IRC section 860D may elect to be treated as a real estate mortgage investment conduit (REMIC) for the tax year by figuring its taxable income as a REMIC on federal Form 1066. An entity filing as a real estate investment trust (REIT) files either Form IT-20 or FIT-20 to report total federal taxable income, deductions, gains, and losses from the operation of a REMIC Indiana. In addition, the REMIC must report and pay the taxes on net income from foreclosure property and contributions after a startup day. If this applies to you, check box J-6 in the taxpayer identification section on the front of the return. A domestic insurance company (organized under the laws of the state of Indiana) that elects to file the corporation income tax return, instead of the premium insurance tax return, must file on Form IT20. It is exempt from the insurance premium tax if it elects to pay the adjusted gross income tax. If this applies to you, check box J-4 in the taxpayer identification section on the front of the return. Publicly Traded Partnership (Domestic and Foreign) Filing federal Form 1065 or 1065B, file: Real Estate Mortgage Investment Conduit (IRC section 806D) Filing federal Form 1066, file: If a financial institution, file: Form IT-20 Form URT-1 Form FIT-20 A publicly traded partnership (PTP) that is treated as a partnership and not as a corporation for federal income tax purposes must file on Form IT-65. A PTP that is treated as a corporation for federal income tax purposes under IRC section 7704 must file on Form IT-20. Regulated Investment Company (IRC section 851) Filing federal Form 1120-RIC, file: If a financial institution, file: State Return(s) to File Form IT-20 Form FIT-20 A regulated financial corporation, subsidiary of a holding company, or regulated financial corporation can elect to be treated as a regulated investment company (RIC) by filing Form 1120-RIC. For state purposes, the RIC must use Form IT-20 or FIT-20 to report federal taxable income, deductions, gains, and losses from the operation of a RIC in Indiana. A PTP based utside of Indiana must file a Certificate of Authority to do business in Indiana, similar to what foreign corporations file. The state return is due on the 15th day of the fourth month following the close of the corporation’s tax year. The tax return(s) is due on the 15th day of the fourth month following the close of the entity’s tax year. 9 American LegalNet, Inc. www.FormsWorkflow.com  S Corporation (IRC section 1361) Filing federal Form 1120S, file: If a utility service provider, file: To register your nonprofit status with the state, you must submit a Nonprofit Organization Application for Sales Tax Exemption (NP-20A). Contact: State Return(s) to File Form IT-20S Form URT-1 A corporation incorporated in the U.S. may elect S corporation treatment. The corporation must submit IRS Form 2553 to the IRS for recognition of its status. This is a separate legal and taxable entity and can have no more than 100 owners. An S corporation is exempt from federal income tax except on certain capital gains and passive income. Any income taxed at the corporate level is subject to the Indiana corporate AGIT. After nonprofit status is granted, the organization files the annual report NP-20 to maintain state recognition of its sales tax exemption. If the organization has unrelated business income over $1,000 during the tax year, it must also file Form IT-20NP with the Department. For information about nonprofit filing requirements, obtain Income Tax Information Bulletin #17. A corporation that has permission to file as an S corporation return must file its Indiana return on the Indiana S Corporation Income Tax Return, Form IT-20S. The Annual Report and income tax return are due on the 15th day of the fifth month following the close of the organization’s tax year. The state tax return(s) is due on the 15th day of the fourth month following the close of the corporation’s tax year. Settlement Fund (IRC section 468B) Filing federal Form 1020-SF, file: If a financial institution, file: Forms for Specific Nonprofit Organizations State Return(s) to File Form IT-20 Form FIT-20 Nonprofit Organization Filing federal Form 990 or 990T, file: If a utility service provider, also file: The state tax return is due on the 15th day of the fourth month following the close of the fund’s tax year. State Return(s) to File Form IT-20NP and Form NP-20 Form URT-1 A nonprofit organization or corporation must file Form IT-20NP and/or Form NP-20. The Department recognizes the exempt status determined by the IRS. A nonprofit organization registered as a nonprofit registration is subject to the adjusted gross income tax, unless the income is specifically exempt from taxation under the provisions of the Adjusted Gross Income Tax Act (IC 6-3-22.8 and 6-3-2-3.1). The nonprofit organization is subject to both federal and state tax on income derived from an unrelated trade or business as defined in IRS section 513. Nonprofit Corporations (Domestic and Foreign) A corporation can be formed for profit or nonprofit purposes. A nonprofit organization is an association whose purpose is to engage in activities that do not provide financial profit to the benefit of its members. Such corporations must obtain nonprofit or tax exempt status from the IRS and Indiana Department of Revenue to be free from certain tax burdens. The tax return on unrelated business income (Form IT-20NP) and annual report (Form NP-20) are due on the 15th day of the fifth month following the close of the organization’s tax year. The URT-1 tax return is due on the 15th day of the fourth month following the close of the organization’s tax year. Formation of Nonprofit Corporation Nonprofit entities can be organized formally or informally. Forming a corporation creates a specific legal entity. A nonprofit organization incorporated in this state (a domestic corporation) must have on file Articles of Incorporation 4162 with the Corporations Division of the Indiana Secretary of State. An organization incorporated in another state or foreign government must have on file an Application for Certificate of Authority 37035 with the Secretary of State. This allows a foreign (outside Indiana) corporation to do business in Indiana. Religious or Apolstolic Organization (Exempt Under Section 501(d)) Filing federal Form 1065, file: State Return(s) to File Form IT-65 The state partnership return is due on the 15th day of the fourth month following the close of the organization’s tax year. Application for Nonprofit Status and Registration Other Related Income Tax Filing Requirements of a Corporation Contact the Internal Revenue Service for federal requirements to obtain nonprofit (commonly known as 501(c)(3)) status. The IRS publishes an information booklet titled “Tax Exempt Status for Your Organization,” Publication 557. Contact: Indiana Department of Revenue Tax Administration 100 N. Senate Ave. Indianapolis, IN 46204-2253 (317) 232-2045 State Return(s) to File Forms for Other Corporate Entities Financial Institution Franchise Tax Form FIT-20 Financial institutions are subject to a franchise tax under IC 6-5.5. Indiana imposes a financial institution franchise tax (FIT) of 8.5 percent on the adjusted gross income of a taxpayer that is carrying on the business of a financial institution within Internal Revenue Service: (800) 829-1040 Publications: (800) 829-3676 www.irs.ustreas.gov/ 10 American LegalNet, Inc. www.FormsWorkflow.com Indiana. “Financial institution” means a holding company registered under the Bank Holding Act of 1956 or registered as a savings and loan holding company; a regulated financial corporation, including a state chartered credit union; and any subsidiary of the above. seller. The person who consumes the utility service in Indiana is liable for the USUT. Unless the seller of the utility service is registered with the Department to collect the USUT on your behalf, you must pay the tax on Form USU-103. For more information, refer to Commissioner’s Directive #32, available at www.in.gov/dor/3617.htm The franchise tax also extends to all other corporate entities when 80 percent or more of their gross income is derived from activities that constitute the business of a financial institution. The “business of a financial institution” is defined as activities authorized by the Federal Reserve Board; the making, acquiring, selling, or servicing of loans or extensions of credit; acting as an agent broker or advisor in connection with leasing that is the economic equivalent of an extension of credit; or operating a credit card, debit card, or charge card business. See 45 IAC 17-2-4. The USU-103 return is due monthly by the 30th day following the end of each month. General Filing Requirements for Form IT-20 What to Enclose with Your State Corporate Return To complete your state income tax return, you must enclose copies of pages 1 through 4 of the completed U.S. Corporation Income Tax Return (Form 1120) or comparable federal return you are filing. You must include federal Schedule M-3 and any confirmation of an extension of time to file the return. Taxpayers subject to the FIT under IC 6-5.5-2-1 are exempt from Indiana’s corporate adjusted gross income tax. Entities subject to this tax should not file Form IT-20; instead, they should file Form FIT-20, Indiana Financial Institution Tax Return. For information, obtain Commissioner’s Directive #14 or contact Corporate Taxpayer Assistance by calling (317) 233-4015. Adjusted Gross Income Tax The Indiana adjusted gross income tax is generally calculated using federal taxable income from federal Form 1120 or a comparable return and making Indiana modifications as required by IC 6-3-1-3.5(b). If income is derived from sources both within and outside Indiana, the adjusted gross income attributed to Indiana is determined by the use of an apportionment and allocation formula detailed on IT-20 Schedule E. The adjusted gross income tax rate is 8.5 percent. The FIT-20 return is due on the 15th day of the fourth month following the close of the corporation’s tax year. Premium (Privilege) Insurance Tax State Form 6135, or State Form 6136 Insurance companies must file federal Form 1120-L or 1120-PC. A foreign insurance company (organized under the laws of a state other than Indiana) is required by IC 27-1-18-2 to pay the insurance premium tax to the Indiana Department of Insurance. However, a domestic (Indiana) insurance company may elect to file the premium insurance tax return or the corporation income tax return (see life, property, and casualty insurance companies). Paying the premium tax exempts the insurance company from the adjusted gross income tax. Due Dates The corporation’s tax return is due by the 15th day of the fourth month following the close of the tax year. However, a farmer’s cooperative described in Section 1381 of the Internal Revenue Code has until the 15th day of the 10th month following the end of its taxable year to file its annual Indiana Adjusted Gross Income Return. And a real estate mortgage investment conduit’s (REMIC’s) return is due by the 15th day of the fifth month following the close of its taxable tax year. The entity’s final state return is due 30 days from the filing due date of Form 1066 following the date the REMIC ceased to exist. The state insurance return is filed with the Indiana Department of Insurance. It is due on March 1 following the close of the tax year ending Dec. 31. Utility Receipts Tax Form URT-1 IC 6-2.3-2-1 imposes a utility receipts tax of 1.4 percent on the gross receipts from the retail sale of utility services. The utility services subject to tax include electrical energy, natural gas, water, steam, sewage, and telecommunications. Gross receipts are defined as the value received for the retail sale of utility services. Extensions for Filing Return The Department accepts the federal extension of time application (Form 7004) or the federal electronic extension. If you have one, you do not need to contact the Department prior to filing the annual return. Returns postmarked within 30 days after the last date indicated on the federal extension are considered timely filed. When a corporation does not need a federal extension of time but needs one for filing the state return, a letter requesting such an extension should be submitted to the Department prior to the due date of the annual return. Entities subject to this tax must file Form URT-1 (Utility Receipts Tax Return) in addition to the annual corporate adjusted gross income or financial institution income tax return. Refer to Commissioner’s Directive #18 at www.in.gov/dor/3617.htm for further information. To request an Indiana extension of time to file, contact the Indiana Department of Revenue, Data Control Business Tax, Returns Processing Center, 100 N. Senate Ave., Indianapolis, IN 46204-2253. The URT-1 return is due on the 15th day of the fourth month following the close of the taxpayer’s tax year. Utility Services Use Tax Form USU-103 Your business may be subject to an excise tax of 1.4 percent on the consumption of utility services. A utility services use tax (USUT) is due if the utility receipts tax is not payable by the An extension of time granted under IC 6-8.1-6-1 waives the late payment penalty for the extension period on the balance of tax due, provided 90 percent of the current year’s total tax liability 11 American LegalNet, Inc. www.FormsWorkflow.com is paid on or prior to the original due date. Form IT-6 should be used to make an extension payment for your taxable year. This payment is processed as a “fifth” estimated payment. (See Income Tax Bulletin #15 for more details.) Any tax paid after the original due date must include interest. If the group wants to revoke the election in a subsequent tax year, it must prove good cause and receive written permission from the Department. You must make your request to discontinue filing consolidated at least 90 days before the due date of the return. Unitary (Combined) Filing Status Interest on the balance of tax due must be included with the return when it is filed. Interest is computed from the original due date until the date of payment. Each October the Department establishes the interest rate for the next calendar year. See Departmental Notice #22 for interest rates. A taxpayer can petition the Department for permission to file a combined income tax return for a unitary group. You must file the petition with the Department on or before 30 days after the end of the tax year for which permission is sought. If you have a valid extension of time or a federal electronic extension to file, you must check box V1,on the front of the return. If applicable, enclose a copy of the federal extension of time to the return when filing your state return. Permission will be granted if combined reporting will more fairly reflect the unitary group’s Indiana source income. The petition should be sent to: Indiana Department of Revenue, Tax Policy Division, 100 N. Senate Ave., N-280, Indianapolis, IN 46204. Accounting Methods and Taxable Year Caution: After permission has been granted to file on a combined basis, a taxpayer must continue to file returns on this basis until permission is granted by the Department for use of an alternative method. The taxpayer filing the combined return must petition the Department within 30 days after the end of the tax year for permission to discontinue the filing of a combined return. The Department requires that you use the same method of accounting that you used for federal income tax purposes. The taxable year for the adjusted gross income tax must be the same as the accounting period adopted for federal income tax purposes. If the apportionment provisions do not fairly reflect your corporation’s Indiana income, you must petition the Department for permission to use an alternative method. IT-20 Unitary Schedule 1, Combined Profit and Loss Statement of Indiana Unitary Group, must be completed detailing the federal taxable income, inter-company eliminations, and adjusted gross income tax of the members. You must attach to the return a list of the corporations involved in the apportionment factor of the unitary filer, including their federal identification numbers. The computation of apportionment for members of the combined group must be included. Each taxable member will be assigned a share of business income according to its relative share (its percentage share without considering any nontaxable member’s share) of the unitary group’s Indiana property, payroll, and (adjusted) sales factors. For an overview of corporate taxation, refer to Income Tax Information Bulletin #12. Consolidated Reporting Under the Adjusted Gross Income Tax Act, affiliated corporations have the privilege of filing a consolidated return as provided in IRC Section 1502 for those affiliates as defined in IRC Section 1504. The Indiana consolidated return must include any member of the affiliated group under IRC Section 1504 having income or loss attributable to Indiana during the year. To file a consolidated return for adjusted gross income tax purposes, the parent corporation must own at least 80 percent of the voting stock of each subsidiary. Each corporation in the affiliated group electing to file consolidated must either be incorporated in Indiana or be registered with the Secretary of State to do business in Indiana. The affiliated group may not include any corporation that does not have taxable income or loss derived from Indiana sources. Additional information concerning unitary requirements can be obtained from the Tax Policy Division, (317) 232-7282. Refer to Tax Policy Directive #6 at www.in.gov/dor/3661.htm Treatment of Partnership Income If the corporate partner’s and the partnership’s activities constitute a unitary business under established standards (disregarding ownership requirements), the business income of the unitary business attributable to Indiana is determined by a three-factor apportionment formula. The formula consists of the property, payroll, and sales of the corporate partner and its share of the partnership’s factors for any partnership year ending within or with the corporate partner’s income year. The partner’s proportionate share of all of the partnership’s (un-apportioned) state income taxes and charitable contributions are added back in, determining adjusted gross income. An election to file a consolidated return for Indiana purposes can be made by filing the consolidated return by the due date or extended due date. If such an election is made, you should notify the Department by completing Schedule 8-D, Schedule of Indiana Affiliated Group Members, indicating the affiliated corporations included in the consolidated return. An election to file a consolidated return cannot be made on a retroactive basis. After an affiliated group elects to file consolidated for Indiana purposes, the group must follow that election for all subsequent years of filing. In addition, a worksheet must accompany the annual return supporting the consolidated adjusted gross income or loss of each of the participating affiliates. Schedule 8-D is available separately from the Department. If the corporate partner’s activities and the partnership’s activities do not constitute a unitary business under established standards, the corporate partner’s share of the partnership income attributable to Indiana shall be determined at the partnership level as follows: (1) If the partnership derives income from sources within and outside Indiana, the income derived from sources within 12 American LegalNet, Inc. www.FormsWorkflow.com Indiana is determined by a three-factor formula consisting of the property, payroll, and sales of the partnership; (2) If the partnership derives income from sources entirely within Indiana, or entirely outside Indiana, such income is not subject to formula apportionment. Refer to 45 IAC 3.1-1-153. For non-unitary partners, taxable partnership distributions included in federal adjusted gross income are deducted on line 13 of the return. Non-unitary partnership income attributed to Indiana, including any apportioned pro rata modifications, is added back on line 17. Questions relating to EFT payments should be directed to (317) 232-5500. Corporations required to make quarterly estimated payments are permitted to use the annualized income installment method calculated in the manner provided by IRC Section 6655(e) as applied to the corporation’s adjusted gross income tax liability. If you need to establish an estimated account, contact the Department to remit the initial payment and to request preprinted quarterly estimated IT-6 returns. For more instructions, refer to Income Tax Information Bulletin #11. Refer to the instructions for Schedule F for more information. Losses are treated the same as income; however, losses cannot exceed the limits imposed by IRC Section 704. Penalty for Underpayment of Estimated Tax Quarterly Estimated Payments Corporations required to pay estimated tax are subject to a 10 percent underpayment penalty if they fail to file estimated tax payments or fail to remit a sufficient amount. The required estimate should exceed the annualized income installment calculated in the manner provided by IRC Section 6655(e) as applied to the corporation’s liability (effective Dec. 16, 2007), or 25 percent of the final tax liability for the prior taxable year. If either one of these conditions is met, no penalty will be assessed for the estimated period. A corporation whose estimated adjusted gross income tax liability exceeds $2,500 for a taxable year must file quarterly estimated tax payments. The previous threshold in effect was $1,000 through Dec. 15, 2007. The quarterly estimated tax payments are submitted with an appropriate Indiana voucher, Form IT-6, or by electronic funds transfer (EFT), depending on the amount of the payment due. The quarterly due dates for estimated income tax payments for calendar year corporate taxpayers are April 20, June 22, Sept. 21, and Dec. 21, 2009. Fiscal year and short tax year corporate filers must remit by the 20th day of the fourth, sixth, ninth, and twelfth months of their tax period. Use the federal identification number of the reporting taxpayer. Use Schedule IT-2220 to show an exception to the penalty if the corporation underpaid its income tax for any quarter. If an exception to the penalty is not met, payment of the computed penalty must be included with the return. The penalty for the underpayment of estimated tax is assessed on the difference between the actual amount paid by the corporation for each quarter and 25 percent of the corporation’s final income tax liability for the current tax year. Refer to the instructions for completing Schedule IT-2220, Penalty for the Underpayment of Corporate Income Tax. Estimated taxes may be paid at: www.in.gov/dor/epay To make an estimated tax installment payment or to view payment history, you need to know the following information: • Taxpayer name; • Federal tax ID or employer identification number (EIN); • Current street address; and • Last payment amount Electronic Funds Transfer Requirements Corporate quarterly estimated tax must be remitted by EFT if the amount of the corporate adjusted gross income tax imposed on a corporation exceeds an average liability of $5,000 per quarter (or $20,000 annually), effective Jan. 1, 2008. Previously, the threshold in effect was $10,000 per quarter through Dec. 15, 2007. If the Department is unable to obtain payment on the EFT, a penalty of 10 percent of the unpaid tax or the amount of the EFT, whichever is less, will be assessed. Because there is no minimum amount of payment, the Department encourages all corporate taxpayers not required to remit by EFT to participate voluntarily in our EFT program. Claim credit for all your estimated payments on lines 34 - 36 of Form IT-20. Taxpayers should note that refunds reflected on the annual corporate income tax return can be applied to the next taxable year’s estimated liability by entering the amount to be credited on the line 47 of the IT-20 return. An overpayment of estimated payments must be claimed on the annual return to obtain a refund. After a check is remitted for the remainder of a year’s estimated income tax liability, no further estimated returns should be filed with the Department after the date of payment. All checks remitted to the Department should be accompanied by a return or a complete explanation for the payment. If you have a zero liability for a quarter, you do not have to file Form IT-6. Note: Taxpayers remitting by EFT should not file quarterly IT-6 coupons. The amounts are reconciled when the annual income tax return is filed. Effective for 2008, the quarterly estimated payment must be equal to the lesser of 25 percent of the adjusted gross income tax liability for the taxable year, or the annualized income installment calculated in the manner provided by IRC Section 6655(e) as applied to the corporation’s liability for adjusted gross income tax. Also, as of Jan. 1, 2008, if a taxpayer’s estimated liability exceeds $5,000 per quarter, the taxpayer must remit the tax by electronic funds transfer (EFT). If the estimated payment is made by EFT, the taxpayer is not required to file Form IT-6. If the Department notifies a corporation of its requirement to remit by EFT, the corporation must do the following: 1. Complete and submit the EFT Authorization Agreement (Form EFT-1); and 2. Begin remitting tax payments by EFT by the date/tax period specified by the Department. Failure to comply will result in a 10 percent penalty on each quarterly estimated income tax liability not sent by EFT. 13 American LegalNet, Inc. www.FormsWorkflow.com Note: The Indiana Code does not require the extension of time to file payment or final payment due with the annual return to be paid by EFT. You should be sure to claim any EFT payment as an extension or estimated payment credit when filing your annual income tax return. from the date the refund claim is filed. The refund claim includes an amended return that indicates an overpayment of tax. The rate of interest is established by the Commissioner as published in Departmental Notice 22. The rate is updated on or before Nov. 1 to take effect on Jan. 1 for the coming year. An appr