2019 INSTRUCTIONS FOR FILING FORM L-1120, CORPORATION INCOME TAX RETURN CORPORATIONS REQUIRED TO FILE Administrator may extend the time for filing up to six Every corporation “doing business” in Lansing whether or months. When an extension is requested, the tentative not it has an office or place of business in Lansing, is tax must be paid. required to file an annual Corporation Income Tax Return, Form L-1120. Attach a copy of federal Form An extension is automatically granted upon payment of 1120, 1120-A, 1120S, or other corporate return form the balance due (Form L-7004, line 3). Failure to pay the along with Schedule K and all ancillary schedules balance due invalidates the extension request. Interest filed with the IRS to the L-1120 return. and penalty will be assessed on taxes paid late even if an extension of time to file is granted. Corporations cannot elect to file and be taxed like REMITTANCE partnerships. A tax option corporation (S corporation, REIT, etc.) is treated as a C corporation. The tax due must be paid when filing the return. Make check or money order payable to the City of Lansing. The Michigan City Income Tax Ordinance specifically MAILING ADDRESS exempts financial institutions from taxation. “Financial institutions” are defined as state and national banks, trust Lansing Income Tax Department companies, building and loan associations, savings and 124 W Michigan Ave, 1st Floor loan associations, credit unions, safety and collateral Lansing, MI 48933. deposit companies, and any other association, joint stock EFFECTIVE DATE OF TAX company or corporation at least 90% of whose assets The effective date of the City of Lansing’s income tax is consist of intangible personal property and at least 90% 01/01/1968. of whose gross income consists of dividends, interest or other charges resulting from the use of money or credit. PAGE 1 INSTRUCTIONS RENAISSANCE ZONE DEDUCTION Lines 1 - 7. Follow the instructions printed on the return TOOL AND DIE RECOVERY ZONE DEDUCTION form. A qualified corporation located and “doing business” in a Renaissance Zone or Tool or Die Recovery Zone of a Line 8. Corporations qualified to claim a Renaissance city listed in Appendix C may be eligible to claim the Zone deduction use Schedule RZ of L-1120 to calculate Renaissance Zone deduction. This deduction allows the the deduction. Enter the deduction as calculated on corporation to deduct the portion of its income earned in Schedule RZ, line 15. Corporations qualified to claim a the applicable city Renaissance Zone or Tool and Die Tool and Die Recovery Zone deduction use Schedule TD Recovery Zone from income subject to that city’s income of L-1120 to calculate the deduction. Enter the deduction tax. A taxpayer is not qualified to claim the deduction if as calculated on Schedule TD, line 15. the corporation is delinquent for any Michigan or local Line 9. Enter the net income (line 7 less line 8). taxes. A corporation income tax return must be filed to claim this deduction. Schedule RZ of L-1120 is required Line 10. Enter adjustments after Apportionment to be attached to the corporation return when claiming (Schedule G, line 4). the Renaissance Zone deduction. Schedule TD of L- 1120 is required to be attached to the corporation return Line 11. Enter total income subject to tax (line 9 less line 10). when claiming the Tool and Die Recovery Zone deduction. Line 12. Compute the tax by multiplying the total income subject to tax (line 11) by the corporation tax rate of 1% A taxpayer claiming the RZ or TD deduction uses (0.01) and enter the amount of tax. Schedule RZ or Schedule TD respectively to compute the deduction. Schedules RZ and TD of L-1120 are TAX PAYMENTS designed to handle all calculations relative to the Line 13a. Enter the credit forward from the prior year’s deductions. The calculation is complicated by the fact return. that the RZ and TD deductions are reduced in each of the last three years of the zones existence and the fact Line 13b. Enter the total estimated income tax paid for that the reduction factors are based on a calendar year. the tax year. See the forms for additional information. Line 13c. Enter the amount of tax paid with an extension TAX RATE request for the tax year. The Lansing corporation tax rate is 1% (0.01). Line 13d. Enter the amount of tax paid a partnership on FILING DATE behalf of the corporation for the tax year. When reporting Taxpayers on a calendar year are required to file by April tax paid by a partnership, attach a separate schedule 30, 2020 Those on a fiscal year must file by the last day listing the partnership name, federal employer of the fourth month following the end of the fiscal year. identification number and the amount of tax paid by the Returns shall be for the same calendar year, fiscal year partnership. or other accounting period as the taxpayer uses for Line 13e. Enter the total of lines 13a through 13d. federal income tax purposes. TAX DUE EXTENSIONS Line 14. . If tax (line 12) is greater than the total A six month extension is automatically granted without a payments (line 13e) subtract line 13e from line 12 and request if all tax due has been paid by the due date of enter the balance due. the return. To pay with a check or money order make the check or Upon filing an Application for Extension of Time to File a money order payable to the City of Lansing and mail the Corporation Income Tax Return, Form L-7004, on or payment with the return to City of Lansing Income Tax before the due date for filing a return, the Income Tax Page 1 |
2019 INSTRUCTIONS FOR FILING FORM L-1120, CORPORATION INCOME TAX RETURN Department, 124 W Michigan Ave,1stFloor, Lansing, MI basis in determining or loss; or (2) by multiplying the loss 48933. for the entire holding period, as computed for federal OVERPAYMENT income tax purposes, by a fraction, the numerator being the number of months the property was held prior to the Line 15. If the total tax payments (line 13) is greater than effective date and denominator being the total number of the tax (line 12) subtract line 12 from line 13 and enter months the property was held. the overpayment. Capital losses from U.S. Government obligations Line 16. Enter all or any portion of the overpayment to included in income reported on page 1, line 1, are not be credited forward and applied as a payment against deductible. Remove these losses by including them in the corporation’s tax liability for the subsequent tax year. the amount reported on line 3. Line 17. See If you wish to make a donation of any Line 4. Reserved for future use. portion or all of your overpayment, enter the amount of the overpayment you wish to donate on lines 17a, Line 5. Other. Enter on line 5a the losses from entities 17b and/or 17c, otherwise leave blank. Enter the total filing as partnerships included in taxable income reported of the donations on line 17d. on page 1, line 1. Enter and explain on lines 5b and 5c, any other items deducted on the corporation’s federal Lines 18 and 19. Enter the amount of your overpayment return but not deductible on Lansing return. to be refunded. A refund will be issued via a paper refund check unless you elect to receive the refund via Column 2 – Deduct – Items Not Taxable and direct deposit to the corporation’s bank account. To elect Allowable Deductions to receive the refund via an electronic direct deposit, Line 7. Enter the amount of interest income from mark (X) the box on line 19a, Refund – Direct Deposit obligations of the United States, the states or and enter the bank routing number (line 19c), the bank subordinate units of government of the state that is account number (line 19d) and the account type, included in taxable income reported on page 1, line 1. checking (line 19e1) or savings (line 19e2). Line 8. If you reported dividend income, enter on this line DISCLOSURE OF RETURN INFORMATION BETWEEN the amount of the dividend-received deduction allowed CITY AND PREPARER by the federal Internal Revenue Code for dividends Line 20. By marking (X) the “Yes” box (line 20a), the received. corporation is authorizing the applicable city income tax department to: contact the preparer for answers to Lines 9 & 10. Taxpayers may deduct income, war profits any questions that may arise relating to its return; and excess profits taxes imposed by foreign countries or and answer any questions from the preparer about the possessions of the United States, allocable to income return. Also, by marking (X) the “Yes” box (line included in taxable net income, any part of which would 20a), the corporation is authorizing the preparer to: be allowable as a deduction in determining federal provide the applicable income tax department with taxable income under the applicable provisions of the any information about or missing from the return; federal Internal Revenue Code. contact the income tax department for information If a foreign tax credit, rather than a foreign tax deduction, about the return or the status of any related refund or was claimed on your federal return, enter on line 9 the payments; and respond to notices about math errors, portion of the foreign tax credit which was grossed up offsets and return preparation. and included in your corporation common return as PAGE 2 INSTRUCTIONS dividends received. SCHEDULE S Enter on line 10 the "foreign taxes paid or accrued" Tax option corporations (S corporations, etc.) must file portion of the foreign tax credit claimed on the federal as C corporations. Schedule S is used to reconcile the return, not in excess of the federal limitations. The amount reported on Form L-1120, line 1, page 1, with the balance of your foreign tax credit is not deductible. amounts on federal Form 1120S and Schedule K. Line 11. Enter on line 11 the nontaxable portion of a gain SCHEDULE C – Adjustments prior to Apportionment from the sale or exchange of property acquired prior to Column 1 – Add – Items Not Deductible the effective date of the tax. See Appendix A for effective Line 1. Enter on line 1 all expenses (including interest dates. The portion of the gain occurring prior to the expense) incurred in connection with the derivation of inception of the tax is not recognized. Refer to the income not subject to the applicable city’s income tax. instructions for Schedule C, line 3 for computation instructions. Line 2. Enter on line 2 the amount of applicable city’s income paid or accrued during the tax year. Capital gains from US Government obligations included in income reported on page 1, line 1, are not taxable. Line 3. Enter on line 3 the nondeductible portion of a Remove these gains by including them in the amount loss from the sale or exchange of property acquired prior reported on line 11. to the effective date of the tax. See Appendix A for effective dates. The portion of the loss occurring prior to Line 12. Other Items not taxable. Enter on line 12a the inception of the income tax is not recognized. The income from entities filing as partnerships included in amount of loss occurring prior to the effective date of the taxable income reported on page 1, line 1. Enter on line tax is determined by either (1) computing the difference 12b the amount of wages claimed as a credit on the between the total gain or loss for the property as corporation’s federal income tax return. reported for federal income tax purposes and the SCHEDULE D applicable city taxable portion of the loss computed by The business allocation percentage formula must be substituting the fair market value of the property on the used by corporations “doing business” both within and effective date, (closing price for traded securities) for the Page 2 |
2019 INSTRUCTIONS FOR FILING FORM L-1120, CORPORATION INCOME TAX RETURN outside the applicable city who have not been approved for the amount reported on this line including the name to use separate accounting. and taxpayer identification number of the partnership. Elective use of the Multistate Tax Compact Line 2. Enter on this line the net capital loss carryover apportionment provisions is no longer allowed. On applicable to the taxing city and utilized this tax year. Net 09/14/2014 the Multistate Tax Compact provisions of capital losses sustained by a corporation may be carried Michigan law were retroactively repealed effective forward in the same manner as under the federal Internal 01/01/2008. Revenue Code. If all business was not conducted in the applicable city in the year in which the loss was Line 1a. Enter in column 1 the average net book value of sustained, use the business allocation percentage all real and tangible personal property owned by the formula for the year of the loss to calculate the business, regardless of location, and in column 2, show deductible portion of the loss. Attach a schedule showing the net book value of the real and tangible personal your computation of the amount reported on this line. property owned and located or used in Lansing. The average net book value of real and tangible personal Line 3. Net operating losses carried forward are to be property may be determined by adding the net book reported on this line. There is no provision for carrying values at the beginning of the year and the net book back losses to prior tax years. Carryover losses are values at the end of the year and dividing by two. allocated to the applicable city at the same apportionment percentage reported for the year in which Line 1b. Enter in column 1 the gross annual rent the loss was sustained. If all business was not conducted multiplied by 8 for all rented real property regardless of in the applicable city in the year in which the loss was location. In column 2 show the gross annual rent sustained, use the business allocation percentage multiplied by 8 for rented real property located in the formula to arrive at the deductible portion of the loss. applicable city. Gross annual rent refers to real property Attach a schedule showing the computation for the only, rented or leased during the taxable period, and amount reported on Line 1. should include the actual sums of money or other consideration paid, directly or indirectly, by the taxpayer ESTIMATED INCOME TAX PAYMENTS for the use or possession of such property. 1. WHO MUST FILE: Every corporation subject to the tax on all or part of its net profits must make estimated Line 2. Enter in column 1 the total compensation paid to income tax payments using Form L-1120ES. all employees during the year, and in column 2 show the Estimated income tax payments are not required from amount of compensation paid to employees for work or corporations if the estimated tax is two hundred fifty services performed within the applicable city during the dollars ($250.00) or less. year. 2. WHEN AND WHERE TO FILE AND PAY: Line 3. Enter in column 1 the total gross revenue from all A. Calendar year taxpayers must make the first sales or services rendered during the year, and in estimated payment on or before April 30th of the column 2 show the amount of revenue derived from year. The estimated tax is payable in equal sales made or services rendered in Lansing during the installments on or before April 30th, June 30th, year. A corporation must be “doing business” outside of September 30th of the tax year and January 31st of the applicable city to allocate net profit (or loss). the following year. Separate Accounting - The taxpayer may request, or the B. A corporation filing on a fiscal year or a short tax administrator may require, use of the separate year basis must make the first quarterly estimated accounting method. If such method is requested, the income tax payment within four (4) months after the administrator may require a detailed statement to beginning of each fiscal year or short period. For determine whether the net profits attributable to Lansing example, if a fiscal year begins on April 1st, the first will be apportioned with reasonable accuracy. quarterly payment is due on or before July 31st of Generally, a corporation that is unitary in nature (i.e., has the tax year. The remaining installments must be central management, purchasing, warehousing, paid on or before the last day of the 6th, 9th and advertising, etc.) cannot use separate accounting. 13th months after the beginning of the tax year. Taxpayers allocating on any basis other than separate C. Filing and Payment: City of Lansing Income Tax accounting shall include all interest, dividends and other Department, 124 W Michigan Ave, 1stFloor, non-operating income to arrive at the total income Lansing, MI 48933. The estimated tax may be paid subject to the allocation percentage. in full by the due date of the first quarterly Taxpayers using separate accounting shall include in installment. income subject to tax a proportionate share of dividends, NOTICE interest and other non-operating income of the total These instructions are interpretations of the Michigan corporation. This type of income is apportioned to City Income Tax Ordinance. The city’s Income Tax applicable city activity on the same basis as general Ordinance will prevail in any disagreement between the administrative and overhead costs are apportioned. instructions and the Ordinance. SCHEDULE G Revised 01/17/2020 Line 1. A corporation who is a partner in a business activity taxed as a partnership that has business activity in the applicable city must enter on this line their portion of the applicable city’s taxable income or loss from the partnership. Attach a schedule showing the computation Page 3 |