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CCH Axcess Tax

Introduction to the Maine Combined Corporation Tax Return

The Maine corporation combined return is prepared for calendar, fiscal and short year corporations. Using entries from the federal tax return, apportionment interview forms and Maine input forms, the following forms and schedules are prepared for the Maine combined return:

• Form 1120ME, Corporate Income Tax Return
• Form CR, Combined Report for Unitary Members
• Form 1120ES-ME, Estimate
• Form 1120EXT-ME, Extension Payment Voucher
• Form 2220ME, Underpayment of Estimated Tax

A copy of the federal consolidated tax return is attached to the Maine combined return.

A unitary business group filing a combined return must include all unitary business members. Affiliated businesses that are not part of the unitary business group, which were formerly included on Schedule CB prior to 2001, are not to be included in the combined report.

Maine Combined Report Processing

The Maine combined tax return is processed essentially in the same manner as the federal consolidated return. Each separate unitary member of federal consolidated group must be processed before processing the Maine combined group. In addition, each non-consolidated unitary member filing a separate return should be entered in Maine General section Combined Return worksheet to be included in the Maine combined report.

Indicate on Federal Consolidated Return Information category Basic Data section General worksheet if this return is the parent, subsidiary or consolidated unit. If a company is to be included in the combined group, you MUST make an entry in the "Return May be Included in a Consolidated Return" Be sure to check this box even if the federal return will NOT be included with a federal consolidated return. This box will NOT affect the processing of a regular separate federal and state return, but will save off data that is essential to processing your Maine combined return. In general, we assume the membership is the same for both federal consolidated and Maine combined purposes unless non-consolidated unitary members are involved. In this case, your entries on Federal General Information section Consolidated worksheet and Maine General section Combined Returns worksheet are required in order to process Maine combined return. If the membership for the Maine consolidated return is different than the federal consolidated group, a subsidiary can be excluded from the Maine consolidated filing. This entry is made on the Common State worksheet, State/City Common Data, Consolidated/Combined Return Information section, Member of federal consolidated but not for state.

Various options on federal General Information section Consolidated worksheet may be selected when processing the federal consolidated return. These options apply specifically to the federal return and will not be used for the Maine combined return. We process Maine combined report, Form CR and all necessary statements to complete the combined return.

Overrides for the name, address and federal employer identification number for the common parent corporation may be entered on Federal State Overrides section Consolidated worksheet.

Combined Return Entries

For combined returns, some information can be entered at the separate company return level and other information should be entered on the combined unit. Items designated with CC on the following regular Maine Corporation Interview Forms are allowable entries in the combined return.

Information used to prepare underpayment penalty on Form 2220ME, and late payment interest and penalty must be entered on the federal input sheets in the combined unit.

Apportionment Information

Apportionment information is required in Form CR, column 9 for all the corporations involved in the Maine combined return. For Maine combined report purposes, Schedule A, lines 12, 13 and 14 should be entered at the separate company level even if the corporation is a domestic corporation doing business entirely in the state of Maine. Enter apportionment information at the separate company level if the return is included in federal consolidated return or enter the required apportionment information in Maine General section Combined Returns worksheet for non-consolidated corporations included in the Maine combined return.