Instructions For Form 355 - Massachusetts Corporation Excise Return

Line by Line Instructions

sales: and (2) a portion of other allowable deduc-

Line 11

Line 15

tions. Other allowable deductions consist of deduc-

A taxpayer must add back to net income any re-

Enter the total cost of renovating an abandoned

tions not directly traceable to mutual fund sales or

lated member interest expenses and costs, includ-

building in an Economic Opportunity Area. Multi-

non-mutual fund sales. To determine the deduct -

ing losses incurred in connection with factoring

ply this amount by 10% and enter here.

ible amount of its other allowable deductions a mu -

or discounting transactions. If you qualify for an

Line 16

tual fund service corporation must multiply the

exception to the add back requirement, com -

total amount of its other allowable deductions by a

Refer to Schedule E-1 for the allowable deductions

plete Schedule ABI. For further information, see

fraction, the numerator of which is the mutual fund

for dividends. Dividends from a Massachusetts

TIR 03-19.

service corporation’s gross income derived from

corporate trust, a non-wholly-owned DISC or a

Line 12

mutual fund sales for the taxable year and the de-

corporation of which less than 15% of the voting

nominator of which is the mutual fund service cor-

Massachusetts has decoupled from the American

stock is owned are not deductible. Also, direct or

poration’s total gross income for the taxable year.

Jobs Creation Act of 2004, Public Law 108-357.

indirect dividends received from a RIC or REIT

Taxable net income from non-mutual fund sales

For corporate excise purposes, the definition of

are not deductible.

consists of any taxable net income not derived

net income does not include the new federal pro-

Line 24

from mutual fund sales.

duction activity deduction. See TIR 05-5 for fur-

A deduction is allowed for expenditures paid or in-

ther information.

If a corporation is not a mutual fund service corpo-

curred during the taxable year for the installation of

ration, 100% of sales, profits, and income should

Line 13

any solar or wind powered climate control or water

be entered in lines 1 through 13. If the corporation

Enter any adjustments to income not previously re -

heating unit. Ancillary units do not qualify.

has income from business activities which is tax-

ported. For example, enter in this line the amount

able both in Massachusetts and any other state,

In order to be eligible for this deduction, the prop -

of depreciation or amortization taken this year in

Schedule F should be completed and the appor-

erty must be certified by the Office of Facilities

computing U.S. net income for the following:

tionment percentage entered in line 20.

Man agement. A copy of such certification must be

certified industrial waste and/or pollution treat-

available along with a schedule itemizing the:

Line 4

ment facilities of prior years; or

cost;

Enter U.S. taxable income before deducting net op -

certified solar/wind units of current or prior

allowable U.S. depreciation;

erating loss or other special deductions. If the cor -

years, if said facilities were sold during the year.

poration is the parent of a DISC, income should be

date of installation; and

(See M.G.L. Ch. 63, sec. 38D(d) and sec. 38H(e)

reported with no allocation to the DISC.

for further explanation.)

place of installation.

Line 5

Capital gains on installment sales of intangible

If these amounts are prorated, the computation

property made prior to 1963 may also be deducted

Enter any allowable U.S. Wage Credit used in cal-

should be explained.

from income. These gains fall under the provisions

culating U.S. Form 1120, line 13.

If eligible units do not continue in qualified use for

of prior Massachusetts law when such income

ten years, the deductions previously allowed must

Line 7

was not taxable (see M.G.L. Ch. 63, sec. 38(a)(2)).

be added back to taxable income. The amount

Enter all interest received on state and municipal

This adjustment should be made in line 8.

should be entered in Schedule E, line 13.

obligations not reported in U.S. net income.

Deduct the full U.S. research credit generated pro-

Note: The special deduction for the construction

vided that the full U.S. research credit was taken. If

Line 8

of certified industrial waste and/or air pollution

a reduced U.S. research credit was taken, no ad-

treatment facilities does not apply to expenditures

Massachusetts does not allow a deduction for

justments are necessary.

paid or incurred on or after January 1, 1980.

state, local and foreign income, franchise, excise

From Massachusetts Schedule RC, Part 1, line 21,

or capital stock taxes. Any such taxes which have

Line 26

add back the full Massachusetts research credit

been deducted from U.S. net income should be en-

generated.

Enter the amount of the corporation’s loss carryover

tered in line 8 and added back into income.

deduction from Schedule NOL, line 5.

The deduction allowed to a corporation for any ex -

Line 9

pense which qualifies for the Massachusetts Re-

Line 27

For Massachusetts purposes, for taxable years

search Credit must be reduced by the Mass achu -

Subtract the amount on line 26 from the amount on

ending after Septem ber 10, 2001, depre ciation is

setts Research Credit determined in the current

line 25. Enter this amount in the excise calculation

to be claimed on all assets, regardless of when

taxable year. In addition, subsection (c) of IRC sec.

section, line 3.

they are placed in service, using the method used

28 0C, which requires a similar reduction of the de-

for U.S. income tax purposes prior to the enact-

duction, shall not apply in determining Massachu -

Line 28

ment of sec. 168(k). For more information, see TIR

setts net income.

Enter the amount of the total net operating loss

02-11 and TIR 03-25.

Capital loss carryovers are not allowed under Mass -

available for carryover to future years. This figure

achusetts law. Any loss claimed on the U.S. return

Line 10

is taken from Schedule NOL, line 8.

must be added back here.

A taxpayer must add back to net income any re-

If Schedule NOL is not filed and Schedule E, line

lated member intangible expenses and costs, in-

If the corporation has income not subject to ap-

23 is a loss, enter the amount from line 23 in line

cluding losses incurred in connection with factor-

portionment, the amount should be deducted here

28 as a positive number.

ing or discounting transactions. If you qualify for

and entered on Schedule E, line 22.

an exception to the add back requirement, com-

plete Schedule ABIE. For further information, see

TIR 03-19.

Instructions For Form 355 - Massachusetts Corporation Excise Return - 2016 Page 12

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