Preparing Rhode Island returns when the state and federal groups are the same

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Use this procedure to ensure the correct preparation of Rhode Island combined income tax returns if the members of the Rhode Island unitary business group are the same as those included in the federal consolidated group.

  1. Add Rhode Island to the parent 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.

    Notes

    • According to Rhode Island Regulation CT 88-7, intercompany transactions are not eliminated in determining separate company Rhode Island taxable income or loss.
    • 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.
  2. Add Rhode Island to the federal consolidated client.

    Note: When adding Rhode Island 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 consolidated functionality does not take place. The amounts from each member are not combined, and the combined reports are not available.

  3. Review all Rhode Island 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 client. For a list of categories and related input screens, see Categories and related Rhode Island input screens.

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

  4. To change amounts entered in the Rhode Island parent 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.
  5. Print and review the Rhode Island combined tax return.

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