Form It 611 - Corporation Income Tax Forms And General Instructions

GENERAL INFORMATION: INCOME TAX

(continued)

CLAIMS FOR REFUNDS

DEFERRED COMPENSATION

A nonresident, who receives deferred compensation or income

For tax years beginning on or after January 1, 2003, a claim for

from the exercise of stock options that were earned in Georgia in

refund of tax paid must be made within three years from the later

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

date of either payment of the tax or the due date of the income tax

prior year’s income exceeds the lesser of: 1) 5 percent of the

return (including extensions which have been granted). For

income received by the person in all places during the current

example, if payments were made with respect to the 2009 calendar

taxable year; or 2) $5,000. However, the income is not taxed if

year on or before September 15, 2010 (extended due date for the

federal law prohibits the state from taxing it. Federal law prohibits

2009 tax year), the taxpayer must file any claim for refund by

state taxation of some types of retirement income including

September 16, 2013.

pensions as well as income received from nonqualified deferred

PENALTIES AND INTEREST

compensation plans if the income is paid out over the life

expectancy of the person or at least 10 years. An employer is

he Georgia Code imposes certain penalties as follows:

required to withhold Georgia income tax on amounts that are

•

Delinquent filing of a return–5% of the tax not paid by the original

required to be included in the nonresident’s income. See

Regulation 560-7-4-.05 for more information.

due date for each month or fractional part thereof up to 25%.

•

Failure to pay tax shown on a return by the due date -1/2 of 1%

ADJUSTMENTS TO FEDERAL INCOME

of the tax due for each month or fractional part thereof up to 25%.

Federal taxable income is used as the basis of computation to

Failure to pay tax penalty is not due if the return is being amended

due to an IRS audit.

calculate Georgia taxable income. Lines 2 and 4 of Schedule 1

provide the modifications required by Georgia Law. The total

•

Assessment of other penalties are as follows:

additions to Federal income should be indicated on Schedule 1,

Line 2 and listed on Schedule 4.

•

Negligent underpayment of tax-5% thereof.

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

•

Fraudulent underpayment-50% thereof.

able year made to employees who are not authorized employees

and who are not excepted by O.C.G.A. section 48-7-21.1. An au-

•

Underpayment of estimated tax- see page 13.

thorized employee is someone legally allowed to work in the

Note: The combined total of the penalty for delinquent filing of a

United States.

Georgia does not allow the Federal deduction for income

return and failure to pay tax shown on a return cannot exceed 25%

attributable to domestic production activities (I.R.C.

of the tax not paid by the original due date.

Section 199).

Interest accrues at the rate of 12% per year from the original due

date until the date the liability is paid in full. An extension of time

A corporation must add back all intangible expense and

for filing does not affect any interest or penalty charged for late

related interest expense directly or indirectly paid to a

payment of tax.

related member. All such expense must be listed as an

addition to federal income even if the taxpayer qualifies

COMPUTATION OF INCOME TAX

for an exception. If the taxpayer qualifies for a full or

Georgia income tax is 6% of the Georgia taxable income shown on

partial exception, Form IT-Addback must be completed in

Schedule 1, Line 7. The amount of tax must be entered on Sched-

order for the taxpayer to take a subtraction on Schedule 5

ule 1, Line 8, and on Schedule 3, Line 1A.

for all or any portion of the addition listed on Schedule 4.

RELATION TO FEDERAL RETURN

A corporation must add back all captive REIT expenses directly

or indirectly paid to a related member. All such expense must

The Georgia return correlates to the Federal return in most respects

(see information on Page 1 about Federal tax changes). The

be listed as an addition to federal income even if the taxpayer

taxable income shown on the Federal return is the basis used to

qualifies for an exception. If the taxpayer qualifies for a full or

calculate Georgia taxable income with adjustments as provided

partial exception, Form IT-REIT must be completed.

by Georgia law. The accounting period and method for the Georgia

Total subtractions from Federal income should be indicated

return must be the same as the Federal return. The Federal

on Schedule 1, Line 4 and listed in Schedule 5. The more

principles pertaining to execution of the return by an officer and the

commonly used items are listed in each of these schedules.

preparer also apply to Georgia returns. A copy of the Federal return

and all supporting schedules must be attached to the Georgia

Additionally, adjustments due to other Federal tax

return.

changes should be reported as stated in the instructions

on Page 1.

Affiliated corporations that file a consolidated Federal income

tax return must file separate income tax returns with Georgia

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

unless they have prior approval or have been requested to file a

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

consolidated return by the Commissioner of Revenue. If filing a

expense is multiplied by a fraction, the numerator of which is

consolidated Georgia income tax return, a separate net worth

the taxpayers average adjusted basis of the U.S. obligations,

tax return must be filed by each subsidiary. Visit our website at

and the denominator of which is the average adjusted basis of

for instructions concerning proper return

all assets of the taxpayer. Any other methodology requires

preparation and mailing.

pre-approval from the Department. Also see Georgia Regulation

If a federal audit results in a change in taxable income, the taxpayer

560-7-3-.10.

shall file a return reflecting the changed or corrected net income

within 180 days of final determination. Mail the return to: Georgia

Taxpayer Services Division, P. O. Box 49432, Atlanta, GA 30359-

1432.

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Form It 611 - Corporation Income Tax Forms And General Instructions - 2012 Page 7

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