Corporation Income Tax
For Missouri income tax purposes, the S Corporation income tax return is filed for informational purposes only. The tax is paid by the shareholder on their Missouri individual income tax return. However, for tax year’s beginning before January 1, 2016, a Form MO-1120S return must be filed to fulfill the S Corporation's franchise tax liability, and payment of franchise tax must be paid if the corporation's assets (in or apportioned to Missouri) exceed one million dollars for franchise taxable years beginning on or after January 1, 2000, or ten million dollars for franchise taxable periods beginning on or after January 1, 2010. No franchise tax is imposed for tax year’s beginning on or after January 1, 2016.
Any corporation filing a Federal Form 990, 990EZ, 990N, or 990PF is not required to file a Missouri corporation income tax return and should not send a copy of the federal form to the Department of Revenue.
QSSS's are treated the same way for Missouri income tax purposes as they are treated with the Internal Revenue Service. One Form MO-1120S is filed under the parent's name and includes all of the activity of the parent and subsidiaries. However, for Missouri franchise tax purposes (Form MO-FT), each company (parent and subsidiaries) must file a separate Form MO-FT for tax years beginning before January 1, 2016. For example, Company P and QSSS companies S1 and S2 file a Federal Form 1120S as parent and Qualified Subchapter S Subsidiaries. Company P would file Form MO-1120S as Company P and subsidiaries. Company P would complete Form MO-FT on just its balance sheet items. Subsidiaries S1 and S2 will file a separate Form MO-1120S, mark the box indicating the filing is for Franchise Tax Only and complete Form MO-FT on each company's balance sheet. Each company would be responsible for paying their franchise tax on the separate Form MO-1120S.
No. Missouri does not have a claim of right doctrine similar to the Internal Revenue Service. Form MO-1120, Line 1, is the federal taxable income reported to the Internal Revenue Service and the federal income tax deduction is based on Federal Form 1120, Schedule J. No additional modifications are allowed on the Missouri income tax return related to the claim of right doctrine calculations on the federal income tax return.
A MITS/MO ID number is assigned to all corporations registered with the Missouri Department of Revenue. This number is used to locate financial information associated with the corporation. This includes original returns, estimated tax payments, Form MO-7004 payments, etc. Every Form MO-1120 filed must have a MITS/MO ID number on it. A return without this number or one with an incorrect number may cause a delay in processing.
If you do not have a MITS number, or need to locate the MITS number, an officer may call the Missouri Department of Revenue, Business Tax Registration at (573) 751-5860.
General questions that do not address confidential information filed with the Missouri Department of Revenue may be discussed with anyone. Confidential information (including any payment received, return, adjustment, extension filed, etc.) can only be discussed with an officer of the corporation, the preparer (or any member of the preparer's firm or if internally prepared, any member of the internal staff) if the authorization box is checked on Form MO-1120, Page 1, or Form MO-1120S, Page 1, or a person who has a Missouri power of attorney on file (Form 2827).
For tax years beginning on or after September 1, 1993, the tax rate is 6.25 percent. For tax years before September 1, 1993, the tax rate is five percent, except for tax years 1990 and 1991 when the rate was graduated.
For all tax years beginning on or after January 1, 1990, but not after December 31, 1991, use the income rates below:
Missouri Taxable Income on Line 10 of Form MO-1120X:
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Your Missouri return is due the 15th day of the 4th month following the year end. If your short period return ended November 30, 2015, then your Missouri corporation return is due March 15, 2016. Missouri does not follow the federal guidelines for due dates on short period returns.
Note: When the due date falls on a Saturday, Sunday, or a legal holiday, the return and payment will be considered timely if made on the next business day.
You must file and pay an estimated return by the original Missouri due date and when the federal return is completed, file an amended Missouri return.
Additions to tax are imposed for failure to file or failure to pay. Additions to tax are imposed for failure to file by the due date at the rate of 5 percent per month, not to exceed 25 percent of the unpaid balance. Additions to tax are imposed for failure to pay by the due date at the rate of 5 percent of the unpaid balance.
Interest is imposed on the portion of your Missouri tax liability that is not received on or before the due date. Simple interest is charged on all delinquent taxes. Click here to obtain current or previous interest rates.
If you have delinquent tax and want help figuring the amount due, access the Additions to Tax and Interest Calculator.
The corporation must include in its Form MO-MS its percentage of ownership of the partnership's or Subchapter S Corporation's factors. For example, Company C owns 40 percent of Partnership P. The corporation does not have any property, payroll, or sales except for in its ownership of the partnership. The corporation would take 40 percent of the partnership's property, payroll, and sales everywhere and Missouri only and use these amounts to complete the Form MO-MS.
For non-business income, a schedule must be attached that clearly states the nature and/or source of the non-business income in order to be considered by the Missouri Department of Revenue. The schedule must state the reasons that the income is being allocated. For example, a corporation owns a ten story building. The first two stories are used for the corporation's headquarters and the remaining eight floors are rented to an unrelated company. The rental income for the remaining eight floors is non-business income as it is incidental to the corporation's main business activity.
Wholly passive investment income from outside Missouri will be considered only with an attached detailed explanation.
Missouri corporate income tax is imposed upon Missouri taxable income. Missouri taxable income shall be so much of a corporation's federal taxable income for the taxable year with modification as is derived from sources within Missouri as provided. When a corporation elects single sales or optional single sales factor apportionment, the apportionment and allocation of the listed items is as follows:
Royalties: Royalties are included in Missouri taxable income - all sources and are subject to apportionment by inclusion in the numerator of the apportionment factor as wholly within or partly within and partly without as appropriate; provided however, royalties received from an entity located and operating solely in a foreign country or countries and received from the licensing of trademarks, trade names, or patents may be allocated as wholly passive investment income.
Interest: Interest income from loans or investments made by the taxpayer are an important part of the business and are subject to apportionment by inclusion in the numerator of the apportionment factor as wholly within or partly within and partly without as appropriate; provided however, interest income earned on non-operating excess funds invested by the corporation's out-of-state parent company and invested in another state may be allocated as wholly passive investment income. In addition, interest income received from non-Missouri municipal bonds may be allocated as wholly passive investment income.
Rent: Rent income is included in Missouri taxable income - all sources and is subject to apportionment by inclusion in the numerator of the apportionment factor as wholly within or partly within and partly without as appropriate; provided however, rent income from a passive investment outside of Missouri where the corporation had no control of management may be included in the apportionment fraction as a transaction wholly without Missouri.
Capital Gain: Capital Gain income is included in Missouri taxable income - all sources and is subject to apportionment by inclusion in the numerator of the apportionment factor as wholly within or partly within and partly without as appropriate.
Dividends: Dividends to the extent included in federal taxable income are subtracted in determining Missouri taxable income. Dividends from a Missouri payor are apportioned and then subtracted from apportioned income. Dividends from non-Missouri payors are subtracted on the MO-MS schedule in computation of Partial Missouri taxable income - Missouri Sources.
NOTE: If income is allocated as wholly passive investment income, any related expenses must also be allocated.
If your consolidated federal income is positive and you are carrying back a separate company loss, attach a copy of the consolidated Federal Form 1120 to document there was no consolidated loss to be carried back. If your consolidated federal return was a loss for 2004 and the previous tax periods are consolidated losses, attach a copy of the consolidated Federal Form 1120 for 2004 and the consolidated Federal 1120 for the tax period being amended on a separate company basis. For tax periods that your consolidated and separate company incur a net operating loss that is carried back, attach a copy of the consolidated Federal Form 1139. Also include a revised income statement for the loss year and the amended tax period and a schedule showing the calculation of the federal income tax deduction on the amended return.
For all taxable years beginning on or after January 1, 2011, and ending on or before December 31, 2014, (or in the case of pass through entities all taxable years ending on or after August 28, 2012) if a small business creates new jobs, it may qualify to claim a deduction for the taxable year each new employee completes at least 52 weeks of full-time employment. As of September 1, 2015, no additional New Jobs Deduction claims are allowed for any tax year.
House Bill 128 was passed by the General Assembly in the 2013 Regular Session, and it was signed into law by Governor Nixon on July 12, 2013. House Bill 128 provides that an eligible corporation may elect to use the optional single sales factor apportionment method to compute its Missouri corporate taxable income from sources in this state on its original income tax return. The election to use this apportionment method is available for any original income tax return that is filed on or after August 28, 2013, regardless of the taxable year for which the original income tax return is being filed as authorized by Section 143.451.2(3), RSMo.
This election is not available for any income tax return that was filed on or before August 27, 2013. It is also not available for amended returns filed after the due date or extended due date of the return.
For original returns filed on or after August 28, 2013 and before August 28, 2015, Method 2A only applies to taxpayers selling tangible personal property. Senate Bill 19, passed by the General Assembly during the 2015 Regular Session and signed into law by Governor Nixon on May 6, 2015, provides that Method 2A is also available to taxpayers with sales other than the sale of tangible property for returns filed on or after August 28, 2015 that meet all other requirements.
No. The provision requiring the adding back of bonus depreciation includes property purchased on or after July 1, 2002 but before July 1, 2003, in determining if the bonus depreciation must be used as a Missouri modification. Property purchased before July 1, 2002 and after June 30, 2003, does not qualify for the modification.
For tax years beginning on or after January 1, 1993, the same form is used to file an amended return that was used to file the original return. For tax years prior to 1993, the Form MO-1120X is used. Forms may be obtained by calling (800) 877-6881 or downloading from our tax forms page.
Federal audits and federal amended returns may contain numerous pages. When filing the Missouri amended income tax return, not all of the federal audit or amended return is needed. The minimum information needed is the consolidated federal tax liability (federal audit or federal amended - this information has to be from the Internal Revenue Service or Form 1120X); separate company adjustments (adjustments affecting the amended Missouri return); income statement (or summary of positive federal taxable income companies) before and after federal changes; and federal income tax calculation (before and after federal changes).
- State tax addback
- State and local bond interest (except Missouri)
- Fiduciary and partnership adjustment
- Missouri depreciation basis adjustment (Section 143.121.3(7), RSMo)
- Donations claimed for the Food Pantry Tax Credit
- Interest from exempt federal obligations
- Federally taxable - Missouri exempt obligations
- Reduction in gain due to basis difference
- Previously taxed income
- Amount of any state income tax refund included in federal taxable income
- Capital gain exclusion from the sale of low income housing project
- Fiduciary and partnership adjustment
- Missouri depreciation basis adjustment (Section 143.121.3(7), RSMo)
- Net operating loss carry back previously disallowed for Missouri (Section 143.121.2(4), RSMo)
- Depreciation recovery on qualified property that is sold (Section 143.121.3(9), RSMo)
- Build America and Recovery Zone Bond Interest
- Missouri Public-Private Partnerships Transportation Act
Net Operating Losses
Yes. If the loss for federal purposes is carried back 5 years, the same tax periods must be amended for state tax purposes. However, in carry back years three, four and five, the loss must be added back as an addition modification. Losses required to be added back will be available for use as a subtraction modification (on Form MO-1120, page 2, Part 2, line 9) beginning with the return following the year of the loss.
Corporations that file a Missouri return with a federal net operating loss (NOL) must treat the loss under the provisions of the Internal Revenue Code. Corporations that file a consolidated federal and separate Missouri return shall compute the separate federal taxable income as if each member filed a separate federal return. The corporation is bound by the federal return election to carry losses forward or back, (i.e., if the loss is carried back on your federal return, the separate company loss must be carried back).
- To qualify for a $20,000 deduction, the small business must pay at least 50 percent of the health insurance premiums for all full-time employees, not just for new employees.
A net operating loss modification is computed when a net operating loss deduction is claimed. For example, if there was a net operating loss for the 2015 tax year and the taxpayer carried it back two years and claimed a net operating loss deduction on an amended federal return for tax year 2013, then a net operating loss modification would be computed for the 2013 amended Missouri return.
Note: Modifications should only be completed if positive additions were offset in the year of the loss.
No, it is computed for the year a net operating loss deduction is claimed.
Yes, a net operating loss modification must be computed for each net operating loss included in the net operating loss deduction.
The net operating loss modifications are computed in the same order as the net operating losses are used as net operating loss deductions for federal income tax purposes.
The Net Operating Loss deduction (SB 1394) became effective August 28, 2004, under Section 143.431.4, RSMo.
Yes, line 1 of the Missouri return can be zero only when federal taxable income is zero. When a corporation has a net operating loss (negative line 30 on the Federal Form 1120), line 1 on the Missouri return must equal the same negative amount. A corporation may show the negative amount on line 1 and use it to offset positive modifications, if it chooses. If a negative amount is entered on line 1 and it is used to offset positive additions in the initial year of the loss, Form MO-5090 must be completed when the corporation uses the net operating loss as a carry back or carryfoward on the Federal return.
No, the corporation only computes the net operating loss modification and files Form MO-5090 for each year a net operating loss deduction is claimed on a federal return not when the loss was incurred.
No, the affiliated group would only file Form MO-5090 for each year a net operating loss deduction is claimed on a consolidated federal return not in the year that the loss was incurred.
No, the separate company would only file Form MO-5090 for each year a net operating loss deduction is reported on a separate company pro forma federal return not in the year that the loss was incurred.
If the consolidated federal income is positive and the corporation is carrying back a separate company loss, attach a copy of the consolidated Federal Form 1120 to document there was no consolidated loss to be carried back. If the consolidated federal return was a loss for 2004 and the previous tax periods are consolidated losses, attach a copy of the consolidated Federal Form 1120 for 2004 and the consolidated Federal 1120 for the tax period being amended on a separate company basis. For tax periods that the consolidated group and separate company incur a net operating loss that is carried back, attach a copy of the consolidated Federal Form 1139. Also include a revised income statement for the loss year and the amended tax period and a schedule showing the calculation of the federal income tax deduction on the amended return.
If you still have questions, please check out other Business Tax FAQs.
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