Instructions For C-8009 - Allocation Of Statutory Exemption, Standard Small Business Credit And Alternate Tax For Members Of Controlled Groups - 2006 Page 2
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3• A member of the group is an individual (sole
tax year ending within the 2006 calendar year are
proprietor) or fiduciary with business income,
consolidated on this form to allocate the statutory
minus loss adjustment, over $115,000.
exemption and determine standard small business
credit or alternate tax. This determination cannot be
• A member of the group has a partner with
made until the end of the latest tax year in the
distributive share of business income, minus loss
group.
adjustment, (member’s C-8000KP, SBT Schedule of
Partners, column E) over $115,000, or
Members with earlier tax years may:
• A member of the group has a shareholder or officer
•
Request an extension, or
with allocated income, minus loss adjustment, over
•
File the SBT returns without claiming either the
$115,000. Allocated income is computed on Form
statutory exemption or the small business credit.
C-8000KC, SBT Schedule of Shareholders and
Determine the exemption allocation and credit when
Officers.
the member having the latest year end completes their
A reduction to the small business credit is required if an
tax year. Other members must then amend their
individual, a partner in a partnership or a shareholder
returns to claim any exemption or credit. The total
or officer of a corporation has allocated income, after
credit cannot be allocated to the return with the latest
loss adjustment, between $95,000 and $115,000.
year end.
Where the allocated income, after loss adjustment, is
Line-By-Line Instructions
between $95,000 and $115,000 for any member of a
controlled group, the reduction percentage will apply to
Lines not listed are explained on the form.
all members of the controlled group. This reduction is
Line 2, Account Number. Enter the same account
based on the individual/partner/officer/shareholder with
number used on page 1 of the annual return.
the largest allocated income.
PART 1: Member Identification.
If a member of the group has a tax year less than 12
months, gross receipts, adjusted business income and
Line 3. Enter in the appropriate column the name, year
share of business income must be annualized to
end, FEIN or TR Number and organization type of
each member. When completing the rest of this form,
determine eligibility and to compute the small business
use the lower case letter (e.g., a, b, c, etc.) to the left
credit. If annualized gross receipts exceed $9 million, but
of each name to refer to a member. If more space is
do not exceed $10 million, complete Part 6. See page
7 for complete annualizing instructions.
needed, attach a schedule identifying additional
members with consecutive letters.
Loss Adjustment. If a taxpayer is not eligible for the
full small business credit or the alternate tax
PART 2: Statutory Exemption
calculation due to an adjusted business income or
One statutory exemption is allowed to a controlled
allocated income disqualifier, there may be a benefit
group, affiliated group or a group of entities under
from Form 3307, SBT Loss Adjustment Worksheet for
common control. Allocate the exemption to members
the Small Business Credit, on page 27. If adjusted
using any method agreeable to all members.
business income was less than zero in any of the five
Members whose apportioned or allocated gross
years immediately preceding the tax year for which
receipts are less than $100,000 are not required to use
the taxpayer is claiming a credit and has received a
any portion of the statutory exemption, but must
small business credit for that same year, then adjust
include their business activity when figuring the small
for the loss. The loss adjustment for adjusted business
business credit.
income purposes must be based on the group’s
combined numbers. However, since the disqualifiers
Enter on line 4 the portion of the statutory exemption
for individual/partner/shareholder are made on an
that is allocated to each member. Use the amount
entity basis, a separate entity loss adjustment must be
allocated to calculate the allowable exemption for
calculated for those purposes. A loss adjustment will
each member on Form C-8043.
not affect a reduction to the small business credit
PART 3: Adjusted Business Income
based on gross receipts that exceed $9 million. It will
also not change the amount of compensation on Form
Business income is adjusted by loss carryforwards and
C-8000KC, Column K, for a C Corporation.
carrybacks from Form C-8000, Single Business Tax
Annual Return, and by compensation and director
Controlled Groups That Have Members With
fees of active shareholders and officers from Form
Different Tax Years
C-8000KC.
Each member’s business activities attributable to its
62
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