Preparing Hawaii returns when the state and federal groups are the same

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Use this procedure to ensure the correct preparation of Hawaii Consolidated and Combined income tax returns if the members of the Hawaii unitary business group are the same as those included in the federal consolidated group.

  1. Add Hawaii to the parent client, the eliminations client, and the applicable 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.

    Note: Apportionment data entry must be completed for each member client, even if the client is 100 percent in-state. The same apportionment method must be used by the parent client and the applicable subsidiary clients. Apportionment data entry is accessed through View > Apportionment.

  2. Add Hawaii to the federal consolidated client.

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

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

  3. Review all Hawaii consolidated or 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 consolidated or combined client. For a list of categories and related input screens, see Categories and related Hawaii input screens.

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

  4. Click the Consolidated folder in the Hawaii folders block. Complete the necessary information in Screens HIAffil and HICAdj.
  5. To file Form N-303, Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax Return, for a particular member of the consolidated group, mark the Filing Form N-303 field in Screen HIAffil for that member. This defaults to the federal for each member.
  6. 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.
  7. To change amounts entered in the Hawaii parent, eliminations, 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 consolidated group return.
  8. Print and review the Hawaii consolidated or combined tax return.

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