Preparing California returns when the state and federal groups are the same and there is not a federal eliminations client

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MFA required for electronic filing

Effective May 3rd, the 2017 version of UltraTax CS requires multi-factor authentication (MFA) to access the electronic filing transmission feature in CS Connect.

Thomson Reuters is committed to proactively evolving our security features to help you protect your firm and your clients' data. For more information about multi-factor authentication, see Multi-factor authentication overview.

Use this procedure to ensure the correct preparation of the California combined income / franchise tax group return if the members of the California unitary business group are the same as those included in the federal consolidated group and there is not a federal eliminations client.

  1. Add California to the parent client and all subsidiary clients. Complete all data entry for these member clients. Each member's state return should be complete and correct before proceeding to the next step.

    Notes

    • All unitary subsidiary clients must have California attached, even if the subsidiary has no California filing requirement. For subsidiary clients with no California filing requirement, you must mark the No California filing requirement, but is included in California combined group report field in Screen CAGen. No other California data entry is needed for these clients except for apportionment data entry.
    • Apportionment data entry must be completed for each member client, even if the client is 100 percent in-state. The parent client and the applicable subsidiary clients must use the same apportionment method. Apportionment data entry is accessed through View > Apportionment.
    • California Regulation Section 25106.5-1 requires that income from intercompany transactions be deferred, not eliminated. Either include all necessary adjustments in each member's return, or enter adjustments in the Group View dialog.
    • All members of a unitary group must prepare and file the same California return, either Form 100 or Form 100W. To select Form 100W, mark the Water's-Edge (Form 100W/100S) field in the California tab in the Client Properties dialog. This selection must be made in the combined client as well as in the parent and subsidiary clients.
    • Adjustments for intercompany transactions may be entered in the Combined members group box in View > Apportionment > California tab. These amounts print on the Apportionment Detail Worksheet and correspond to intercompany adjustments (subtractions) shown on Schedules 5-A and 5-C of FTB Publication 1061, Guidelines for Corporations Filing a Combined Report.
  2. Add California to the federal consolidated client.

    Note: When adding California to a consolidated federal client, the state automatically defaults to being a combined return.

    If the state is added as a C Corporation to a federal consolidated group, the combined functionality does not take place. The amounts from each member are not combined, and the combined worksheets are not available.

  3. Review all California combined client input screens and complete any necessary remaining data entry. For each Category not marked in the File > Client Properties > Advanced Properties > Options dialog, enter the necessary data in the applicable input screens.

    Note: If a category is not marked, enter the data on the applicable input screens in the combined client. For a list of categories and related input screens, see Categories and related California input screens.

    Any changes made to the File > Client Properties > Advanced Properties > Options dialog affect both the federal and state return.

  4. To make manual adjustments in other areas of the return, click the Group View button or press F7 in the input screen field you want to adjust, and then enter the adjustment amount in the Group View dialog.
  5. Click the Combined folder in the California folders block. Complete any additional adjustments in Screen CACAdj or CACBal.
  6. To change amounts entered in the California parent (Key Corporation), or subsidiary clients, go back to the original source of data entry. For instance, if you made a mistake when you entered the apportionment of the first subsidiary, close the consolidated client and reopen the first subsidiary. Choose View > Apportionment for that client and correct the data. Close the subsidiary client and reopen the consolidated client. The correct amount is now a part of the combined Group return.
  7. Print and review the California combined tax return.

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