Form It-711 - Partnership Income Tax General Instructions

GENERAL INFORMATION

FILING REQUIREMENTS

exception. If a taxpayer qualifies for a full or partial exception, Form

A partnership, limited liability company, syndicate, group, pool,

joint venture and unincorporated organization which is engaged

IT-REIT must be completed.

in business or owns property located in Georgia or has members

A taxpayer must addback payments of more than $600 in a taxable

domiciled in Georgia or has income from Georgia sources, and

year made to employees who are not authorized employees and who

is required to file a Federal Income Tax return on Form 1065,

which

are not excepted by O.C.G.A.§ 48-7-21.1. An authorized employee

is required to file a Georgia Income Tax return on Form 700.

is someone legally allowed to work in the United States.

WHEN AND WHERE TO FILE

The total subtractions from Federal income should be shown on Line

Form 700 must be filed on or before the 15th day of the fourth

11 of Schedule 8, and listed in Schedule 6. The more commonly

month following the close of the taxable year. If the due date falls

used items are listed in each schedule.

on a weekend or holiday, the return is due on the next day that is

Additionally, adjustments due to other Federal tax changes

not a weekend or holiday. Mail the form to: Georgia Department of

should be reported as stated on page 1.

Revenue, P.O. Box 740315, Atlanta, Georgia 30374-0315.

U.S. obligation income must be reduced by direct and indirect interest

WHEN ELECTRONIC FILING IS REQUIRED

expense. To arrive at such reduction, the total interest expense is

Taxpayers that remit payments by electronic funds transfer, whether

multiplied by a fraction, the numerator of which is the taxpayer’s

on a mandatory or voluntary basis, must file all associated returns

average adjusted basis of the U.S. obligations, and the denominator

electronically. Also, a nonindividual income tax return must be

of which is the average adjusted basis of all assets of the taxpayer.

electronically filed when the federal counterpart of such return is

Any expense that is subject to further limitation (e.g., Section 179

required to be filed electronically pursuant to the Internal Revenue

Deduction, Charitable Contributions, etc.) is not deductible in

Code of 1986 or Internal Revenue Service regulations.

calculating total income for Georgia purposes. However, these

FEDERAL AUDIT

expenses may be deductible on the partner’s income tax return.

If the Internal Revenue Service has adjusted net income, a detailed

Where salaries and wages are reduced in computing Federal

statement of these adjustments must be submitted under a separate

taxable income because a federal jobs tax credit has been taken,

cover within 180 days to: Georgia Department of Revenue,

which required the elimination of the salary and wages deduction,

Processing Center, P.O. Box 740315, Atlanta, Georgia 30374-0315.

the eliminated salary and wage deduction shall be subtracted from

Further, if the changes result in a refund, the refund must be claimed

Georgia taxable income. Regulation 560-7-7-.05 defines the term

within one year of the date the changes are submitted

“federal jobs tax credit”.

AMENDED RETURNS

Taxpayers who are parties to state contracts may subtract from

Federal taxable income or Federal adjusted gross income 10%

If a partnership becomes aware of changes it must make after filing

its return, it should file an amended Form 700. Check the amended

of qualified payments to minority subcontractors or $100,000,

box on Form 700 and submit an amended K-1 for each partner and a

whichever is less, per taxable year.

A list of certified minority subcontractors will be maintained by the

complete copy of the amended Federal partnership return, including

schedules, if applicable.

Commissioner of the Department of Administrative Services for the

Revenue Department and general public. To register your business

RELATION TO THE FEDERAL RETURN

as a minority subcontractor or to view the list, call 404-656-6315 or

The Georgia return correlates to the Federal return in most respects

visit

(see information below about Federal tax changes). The accounting

A partnership may subtract Federally taxable interest received on

period and method used for the Georgia return must be the same

Georgia municipal bonds designated as “Build America Bonds” under

as on the Federal return.

Section 54AA of the Internal Revenue Code of 1986.

A complete copy of the Federal return and all supporting schedules

must be attached to the Georgia return. Otherwise, your return will

“Recovery Zone Economic Development Bonds” under Section

be deemed incomplete.

1400U-2 of the Internal Revenue Code or any other bond treated as

a “Qualified Bond” under Section 6431 (f) of the Internal Revenue

ADJUSTMENTS TO FEDERAL INCOME

Code are considered “Build America Bonds” for this purpose.

(Schedules 5 and 6)

To determine the total income for Georgia purposes, certain

A partnership may subtract federally taxable interest received

adjustments as provided by Georgia law are included in the

on Georgia municipal bonds issued by the State of Georgia and

computations for Schedules 5 and 6. The total additions to Federal

certain authorities or agencies of the State of Georgia for which

Income should be placed on Line 9 of Schedule 8, and listed in

there is a special exemption under Georgia law from Georgia tax

Schedule 5. Georgia does not allow the Federal deduction for income

on such interest. See Georgia Code Section 48-7-27 for additional

attributable to domestic production activities (IRC Section 199). An

adjustments.

adjustment to the Georgia partnership return is not required if the

DEFERRED COMPENSATION

partnership is not allowed the Section 199 deduction directly, but

A nonresident, who receives deferred compensation or income from

instead passes the information needed to compute the deduction to

the exercise of stock options that were earned in Georgia in a prior

the partners. A partnership must add back all intangible expense

year is required to pay tax on the income, but only if the prior year’s

and related interest expense directly or indirectly paid to a

income exceeds the lesser of: 1) 5 percent of the income received by

related member. All such expense must be listed as an addition

the person in all places during the current taxable year; or 2) $5,000.

to Federal income even if the taxpayer qualifies for an exception.

If the taxpayer qualifies for a full or partial exception, Form IT

However, the income is not taxed if federal law prohibits the state

from taxing it. Federal law prohibits state taxation of some types of

Addback must be completed in order for the taxpayer to take a

retirement income including pensions as well as income received

subtraction on Schedule 6 for all or any portion of the addition

from nonqualified deferred compensation plans if the income is paid

listed on Schedule 5.

out over the life expectancy of the person or at least 10 years. An

A partnership must add back all captive REIT expenses directly or

employer is required to withhold Georgia income tax on any amounts

indirectly paid to a related member. All such expense must be listed

as an addition to federal income even if the taxpayer qualifies for an

that are required to be included in the nonresident’s income.

Page 5

Form It-711 - Partnership Income Tax General Instructions - 2015 Page 6

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