We prepare the Tennessee partnership returns, FAE 170 (partnerships other than general partnerships), FAE 174 (partnerships considered financial institutions for TN tax purposes) and INC 250, for calendar, fiscal and short year partnerships when "TN" is entered as the state code on
If the partnership is inactive in Tennessee, enter an "X"
Other than for footnotes, FS codes are ignored to prepare the Tennessee FAE 170 or FAE 174 return. All income and expenses included on the federal return carry to the Tennessee return.
On
Estimated Tax Payments, Total if Equal four Timely Installments Made and Prior Year Overpayment applied, are entered on Payments/penalties > State Tax Payments > State Tax Payments section. Prior Year Tax. Underpayment options (to force or suppress Form 2220, exclude interest and penalty from FAE 170 or FAE 174, etc) and prior year tax are entered on the Tennessee Estimates / Underpayments > Underpayments section.
Use State Tax payments > State Use fields with a quarter entry of 1, 2, 3 or 4 to override the quarter assigned by the date entry or if dates are left blank. If dates are left blank and the State Use fields are used the payment will be treated as having being made timely for the quarter entered in the State Use field.
A quarterly payment of estimated franchise and excise tax on any installment date shall be considered a payment of
any previous underpayment only to the extent such payment exceeds the amount of the installment payable for that date.
To apply the installment payment to a specific quarter, the following options are available:
Late payment interest and/or penalty is computed from your entries on Payments/Penalties > Penalties > State / City Late Interest and Penalty > Late Interest, Late Payment Penalty and the "Date Filed if after Due Date fields. If the filing date is not entered on the Penalties > the date entered in the "Date return to filed if after due date" field on the General > Basic Data > General section is used. The date entry also overrides the Tennessee filing date on the transmittal letter and filing instructions. If the Late Interest and the Late payment Penalty fields are not 'X'd, interest and penalty are not calculated.
Federal Payments/Penalties > Penalties > State Interest Override section is available to override the late payment interest rate for Tennessee Form INC 250. Be sure to enter the state code of "TN" in State/City Late Penalty and Interest > State or City Cote field. Enter the rate change only for the quarters needed in State Interest Override section. Also, enter an "X" in the appropriate field and the Date Filed if After Due Date field on State/City late Penalties and Interest section.
Form FAE 173, Application for Extension of Time to File, can be produced when the partnership return will be filed after its original due date. This form can be requested in any of the following ways:
Enter an "X in the Produce All State Extensions" field in the federal Other > Extensions >"Form 8736" section. The Tennessee return must already be requested either by entering "TN" as the "Home State" code on the General > Basic Data > General section or by making entries on the Tennessee > General > Basic Data section.
Enter "TN" in the "State Code" field in the federal Form 8736 section.
3. Use Government View to key data directly on the Tennessee Form FAE 173.
Enter amounts paid with extension on federal Payment/Penalties > State Tax Payments > State Tax Payments > Amount Paid with Extension field. Enter Estimated Franchise Tax, Estimated Excise Tax and Extension Due Date if different from Federal overrides on federal Other > Extension >Tennessee Extension.
Schedule D amounts carry from other schedules of the Tennessee FAE 170 return. Tennessee > Income Tax carries from the Tennessee INC 250 return.
Use Tennessee > Credits > Schedule of Credits > Tennessee > Income Tax - Override field, to override Tennessee Schedule D, Income Tax. Enter gross premiums paid on the Gross Premium Tax Paid field. For the FAE 174, enter low income housing credit on the Low Income Housing Credit field.
Estimated franchise and excise tax payments carry from the federal Payments/Penalties > Estimate Payments > Tennessee Estimate payment section. Extension franchise and excise tax payments carry from the federal Other > Extension > Tennessee Extension section.
In general, information from the federal balance sheet is sufficient to complete Schedule F1- Non-Consolidated Net Worth. However, if "Stock is Held in a Corporation(s) Doing Business in Tennessee" or there exists an "Indebtedness to or guaranteed by parent or affiliated corporation," then it is also necessary to enter this information to properly complete Schedule F1. Use
Information from the federal Schedule L is sufficient to complete Schedule F1 - Captive REIT Net Worth. Federal Form 1065, Schedule L, partners' ending capital, carries to the Tennessee Schedule F1, line 1. Make an entry on
Enter the non-consolidated net worth on
On
Schedule G - Determination of Real and Tangible Property
Automatic Features: The following items from the federal return carry to the Tennessee return and do NOT require additional entries on state Interview Forms:
Enter additional information or overrides for the above items
Enter information on
Federal Form 1065, page 1, ordinary income (loss) and federal Form 1065, Schedule K, items specifically allocated, lines 2 through 11 and line 14a, net self-employment income, carry to the appropriate line on Tennessee Schedule J-1.
Enter contributions, not included as a deduction in the aforementioned lines,
Schedule J-1, net self-employment income, is reduced by the health insurance premiums entered on federal Partners > Guaranteed Payments/Partner Options worksheet for the partners for whom the health insurance premiums was taken as a deduction against net self-employment income (loss). Net self-employment loss is not carried to Schedule J-1. If the net self-employment income is overridden on the Income/Deductions > Schedule K SE Income worksheet or on the Tennessee > Income/Deductions > Other Adjustments and Overrides > then the net self-employment income on Schedule J-1, line 5 is not reduced by the health insurance premiums.
Overrides for Schedule J-1 amounts are available
On Tennessee Schedule M, all net earnings are considered business income and therefore subject to apportionment. To exclude certain earnings from apportionment, enter the excludable amount for "Schedule M - Nonbusiness Earnings"
Automatic Features: The following items carry from the federal return to the Tennessee Schedule J and do NOT require additional entries on state Interview Forms:
Use
Passthrough Entities: No adjustments are made for items from pass-through entities included in Tennessee Schedule J-1. If the entity issuing the "Pass-through Schedule K-1" is itself subject to the excise tax and is filing a Franchise, Excise tax return an adjustment may be made for the pass-through net income (loss)
Tennessee excise Taxes: State taxes entered on
Tax Exempt Interest: Tax exempt interest carries from the federal Form 1065, Schedule M-1. If federal Form 1065, Schedule M-1 was NOT prepared, an entry must be made
Schedules U Carryover: Loss Carryover is pro formaed
JCWA\GO Zone Depreciation: Tennessee follows federal depreciation with the exception that any bonus depreciation claimed under JCWA (H.R. 3090) is NOT allowed. For current year assets, the depreciation adjustment will automatically be made. No further entries on your part are required. If federal Totals Only Depreciation input is used, this automatic adjustment will not be made. In this case, an entry
For prior year assets using federal depreciation input, an entry on the state-if-different depreciation may be required. In general, no state entries on the federal state-if-different Interview Form are used to calculate Tennessee depreciation. However, an exception is made for JCWA\GO Zone assets. No entry is necessary for a current year asset.
The computed state depreciation adjustment for JCWA\GO Zone may be suppressed using either General > Depreciation Options and Overrides > (Suppress all state JCWA\GO Zone adjustments field), in the federaI Income/Deductions > Trade or Business, Rental or Farm > depreciation fields, column for HR3090 options or in the Tennessee > Income/Deductions > JCWA\GO Zone field overrides. Tennessee > Income/Deductions > Other Adjustments and Overrides section may be used to make additional adjustments.
The state JCWA\GO Zone adjustment detail report for depreciation can be requested on the General > Depreciation and Options worksheet.
Safe Harbor Lease Election Expenses/Depreciation: Enter expenses and depreciation deducted against federal taxable income as a result of the "Safe Harbor" lease elections on
Enter income included in the federal taxable income and any other expense or depreciation that could have been deducted for "Safe Harbor" lease election on
JCWA\GO Zone Gain or Loss Adjustment: Tennessee gain or loss adjustments, for JCWA (H.R. 3090)\GO Zone assets, on automatic sales are computed from entries made on
If the automatic sale feature is NOT used, the Tennessee gain or loss adjustments for JCWA assets is computed with direct sale information entries on
To identify the sale as a JCWA asset enter an "X" on
The Tennessee computed JCWA adjustment may be overridden on
State taxes only carry to the federal return when a "State and City Tax Accrual Option" is selected. Taxes calculated on the Tennessee return carry to page 1 of the federal return if a "1" is entered in the "State and City Tax Accrual Option" box in the "Processing Options"
State Tax Accrual Option 2 carries state taxes computed on the Tennessee return to page 1 of the federal return but does not accrue them to the federal balance sheet. If required, a Schedule M-1 book/tax adjustment is made.
State Tax Accrual Option 3 accrues taxes to the balance sheet in the same manner as code "1", but tax expense carries to the rental schedule instead of federal Form 1065, page 1.
State Tax Accrual Option 4 does not accrue taxes to the balance sheet, same manner as code "2", but tax expense carries to the rental schedule instead of federal Form 1065, page 1.
If a State Tax Accrual Option is not elected, state taxes computed on the Tennessee return neither carry to the federal return nor accrue to the balance sheet.
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