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CCH Axcess Tax

Introduction to the Mississippi Corporate Return

Mississippi corporate income tax returns are prepared for calendar, fiscal and short year corporations. Using entries from the federal tax return and information entered for Mississippi purposes, the following forms are prepared for the Mississippi return:

• Form 83-105, Mississippi Corporate Income and Franchise Tax Return
• Form 83-110, Mississippi Corporate Franchise Tax Schedule
• Form 83-120, Mississippi Balance Sheet Per Books
• Form 83-122, Mississippi Computation of Net Taxable Income Schedule
• Form 83-124, Mississippi Direct Accounting Income Statement
• Form 83-125, Mississippi Business Income Apportionment Schedule
• Form 83-150, Mississippi Nonbusiness Income Schedule
• Form 83-155, Mississippi Corporate NOL and Capital Loss Worksheet
• Form 83-180, Mississippi Application for Automatic Six-Month Extension for Corporate Income and Franchise Tax Return
• Form 83-300, Mississippi Corporate Estimated Income Tax
• Form 83-305, Interest and Penalty on Underestimate of Corporate Income Tax
• Form 83-310, Mississippi Summary of Net Income of Corporation
• Form 83-391, Mississippi Tax Return for Insurance Companies
• Form 83-401, Mississippi Income Tax Credit Summary

A copy of the federal return is provided for filing with the Mississippi return. Form 83-125 is prepared only if apportionment information is entered, or if Form 83-124 is prepared.

Amended Corporate Income and Franchise Tax Return

Use Amended Return section to provide information required to mark the Mississippi Corporation return as amended.

Combined Income Tax Return

A state combined income tax return is processed for Mississippi corporations by submitting the state information with the separate company returns. This return is filed by the Reporting Corporation, which is the parent return for the federal consolidated return. It is mandatory to indicate which separate company return is the parent company. If the Reporting Corporation for Mississippi is different than the parent company of the federal consolidated return, you must create another version of the consolidating unit indicating this different parent return.

The combined return is used to report income tax only; franchise tax must be reported and paid at the separate company level. Therefore, it is important to enter income tax payments and franchise payments separately (enter income tax payments in the "Payment Based on Income" column and enter franchise payments in the "Payment Not Based on Income" column). The net income and credits against income tax is brought up from each separate company and is reported on Form 83-310, Mississippi Summary of Net Income of Corporation and the totals flow to the Reporting Corporation's regular return existing in the consolidating unit. Except for a few lines which represent these combined amounts and resulting income tax (with resulting combined estimates and combined underpayment of income tax), the Reporting Corporation's regular income tax return consists of its own calculation of taxable income and franchise tax.

To get a complete Mississippi paper return for the combined group, you must print the consolidated company Mississippi return and you must also print each other separate subsidiary company return.

Credits Against Tax

Form 83-401, Income Tax Credit Summary is produced when entries are made on Credits worksheet. Refer to the instructions for this form for more information.

Form 83-124 - Direct Accounting Income Statement

Form 83-124 is produced when direct accounting information is entered on the Income/Deductions worksheet, Direct Accounting section. Refer to the instructions for these forms for more information.

When direct accounting is used, information entered for allocation and apportionment is ignored for Mississippi.

There is no default for any item that is reported on Form 83-124. Form 83-124 information prints as it is entered on the Direct Accounting section.

Information from Federal Worksheets

Depreciation

Mississippi allows federal depreciation with the exception that any bonus depreciation is not allowed. The thirty/fifty percent of the basis of the asset for which bonus depreciation is not allowed is recovered under the rate and method in effect for the rest of the asset basis. The Federal 30%/50% special depreciation allowance is automatically computed and is reported on Mississippi Form 83-122, line 2e. The additional depreciation allowed due to a difference in depreciable base is automatically computed and reported on Mississippi Form 83-122, line 13.

State depreciation is computed from depreciation entries on the "Federal Depreciation and Amortization" forms. Entries on the "State Depreciation and Amortization" forms are not used to compute Mississippi depreciation.

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FS Codes

The Mississippi return recomputes Mississippi taxable income from federal information. Except as noted, FS codes are not required to prepare the Mississippi corporate return. All income and expenses included on the federal return carry to the Mississippi return.

Federal Information

The following items from the federal return are handled on the Mississippi return and do not require additional entries for state purposes:

• Interest on U.S. Obligations
• Municipal Bond Interest from States Other than Mississippi
• Employment Credit Wage Reduction
• Depletion in Excess of Cost
• All State and Local Income Taxes
• Charitable Contributions

U.S. Obligations

Interest on obligations of the United States carries to Mississippi Form 83-122 as a subtraction from federal taxable income.

Municipal Bond Interest

Municipal bond interest from sources outside the state is included in Mississippi net income. Interest on municipal bonds and tax-exempt private activity bonds from states other than Mississippi carries to Mississippi Form 83-122 as an addition to federal income.

Employment Credit

Wages or salaries eligible for the federal Employment Credit which were not deducted on the federal return carry to Mississippi Form 83-122 as a subtraction from federal income.

Net Operating Loss Deduction

For any taxable year ending after December 31, 2001, the period for net operating loss carrybacks and carryovers is two periods back and twenty periods forward.

Enter prior year Mississippi NOL information on the General worksheet, Income/Deduction section.

Federal Depletion in Excess of Cost

Excess depletion carries to Mississippi Form 83-122 as an addition to federal taxable income.

Charitable Contributions

The Mississippi contribution deduction taken on Form 83-122 is limited to 20 percent of Mississippi taxable income before the contributions deduction. Any contribution carryover deducted on the federal return is added back. Do not duplicate this item in the additions to federal income section on the Income/Deduction worksheet. The federal contribution deduction is added back to Mississippi income before computing the allowable Mississippi deduction.

Capital Loss Carryovers

Capital losses may be carried back three years and forward five years in the state of Mississippi for any loss incurred in years beginning after January 1, 1992. Losses incurred before that date cannot be carried back or forward. Enter the amount of the original loss and any amount used in prior years on the Income/deduction worksheet, Net Operating Loss Carryover section. The Net Capital Loss section of the Form 83-155 is produced.

Common State Data

The State Common Data forms provide a centralized location to create state returns and to enter data common to all states and cities. Following is a description of each series of input forms and how they interact with processing a Mississippi return.

State/City Generation Forms

A state or city return may simply be processed by selecting the states or cities you wish to include with your federal return on the State/City Generation worksheet under the Common State category. No additional entries on state/city input forms are required. This provides a centralized location to manage your single or multistate returns.

If you wish to delete a state or city from your return after you created and processed it using the State/City Generation forms, uncheck the applicable field on these forms and use the Delete State feature in the Edit menu.

General Information Forms

These forms are used to enter data common to all state and city returns. They provide a centralized location and generic format to simplify entering state and city data. Not all state and city data are contained here. Fields which are unique or not shared by a group of entities are still located on unique state and city input forms.

When using these forms an entry is mandatory in the State/City Code field. Presence of data on this form will NOT create a state or city return. These may only be created in two ways:

1. Selecting states or cities on the State/City Generation worksheet or
2. Presence of state/city level worksheets

You may designate data to apply to a particular state/city return or you can indicate for it to apply to all of the state/city returns present. To flag your entries to a particular state/city, enter the state/city code from the picklist in the State/City Code field. To apply your input to all of the states and cities present, make an "ALL" entry in the State/City Code field.

There are 3 levels of default for the General Information input series.

The first level is to the Basic Data entered with the federal return. This applies only to selected fields, specifically those followed with the word "override" on the worksheet. For example, if no entries are made on the General Information input series for date of incorporation, the states/cities will default to the incorporation date on the federal Basic Data worksheet.

The second level is to Common Data input with a state/city code of "ALL". A code of "ALL" means it applies to every state and city in the return, unless a unique state/city code is present. For example, if you make an entry for the incorporation date on the General Information section of the State/City Common Data worksheet which is different from the federal, all the states will default to the "ALL" coded date and ignore the federal date. However, if a General Information entry is also present with a different date and a state code of CA, then California will pick up the CA coded date and ignore the federal date and the General Information entry date coded "ALL".

The third level is to the General Information input with a specific state/city code. If both an "ALL" occurrence and a specific state/city entry is present, data must be present in a particular field of the unique state/city occurrence or the default to "ALL" entry for that field will still take place. For example, you have entered a General Information form coded "ALL" which contains an entry for Telephone Number. You have also entered a General Information form coded CA and make only one entry to indicate that it is an initial return for California. The California program will pick up your initial return entry and also the telephone number from your "ALL" entry, since no telephone number was entered with the CA occurrence.

State Tax Payments

Use The State Tax Payments worksheet under the Payment/Penalty category to enter estimated tax payments, withheld amounts, and various other tax payments for Mississippi. Once an entry of "MS" is made in this field, we will allow you to only land on those fields which are applicable to Mississippi. Presence of data on this form will NOT create a state return.

Taxes Paid Based on Income and/or Not Based on Income: If you have identified yourself as a Cash Basis taxpayer, your entries in the columns for Taxes Based on Income and/or Not Based On Income will be carried to the Taxes and Licenses deduction line on page 1 of the federal return. We identify you as a Cash Basis taxpayer if your accounting method is identified as cash on the Miscellaneous Information section of the Basic Data worksheet, and the State Tax Accrual option has NOT been selected on the Processing Option section of the Basic Data worksheet. Your entries here will also be used by Mississippi in arriving at the applicable state tax deductions and/or addbacks to federal income. Any entries on the Taxes and Licenses section of the Business worksheet will be in addition to your entries in these fields. You may override this treatment of the detailed state and city tax payments by making an entry in the field entitled Suppress Carrying of Detailed State/City Tax Payments for Cash Basis Taxpayers on the Processing Options section of the Return Option worksheet or by selecting the same option in the Return Configuration Set.

If you are an Accrual Basis taxpayer, your entries in the columns for Taxes Based on Income and/or Not Based On Income will NOT be carried to the Taxes and Licenses deduction line on page 1 of the federal return or used to determine any state addbacks or tax deductions. We identify you as an Accrual Basis taxpayer if your accounting method is identified as accrual on the Miscellaneous Information section of the Basic Data worksheet, or the State Tax Accrual option has been selected on the Processing Option section of the Basic Data worksheet.

State Estimated Tax Forms

Enter the estimated tax information for Mississippi on the Estimates and Application of Overpayment worksheet under the Payment/Penalty category. Enter "MS" in the field entitled State Code. This is a required entry. No assumption to the state code is made by the program. An entry in the State Code field is mandatory. Not all fields apply to all states. We will allow you to only land on those fields which are applicable to your entry in the State Code field. Presence of data on this form will NOT create a state return.

Penalty Forms

Use these forms to enter penalty information for Mississippi. Late interest and penalty information is entered on the State / City Interest and Penalty worksheet and underpayment of estimated tax data is entered in the State / City Underpayment Penalty worksheet under the Payment/Penalties category. Enter "MS" in the field entitled State Code. This is a required entry. No assumption to the state code is made by the program. An entry in the State Code field is mandatory. Not all fields apply to all states. We will allow you to only land on those fields which are applicable to your entry in the State Code field. Presence of data on this form will NOT create a state return.