Corporation Income Tax
To file an amended corporate income tax return you will use Form MO-1120 and mark the amended box. This form can be found on the Department’s website at dor.mo.gov.
LLC's shall be classified consistent with Federal income tax purposes. If for federal purpose you are treated as a corporation and file a Federal Form 1120 then you will be treated as a corporation with Missouri and would file a Form MO-1120. (Section 347.187.2, RSMo).
If for federal purposes you are treated as an LLC disregarded entity and exempt from filing federal taxes, then you will be treated as a disregarded entity and exempt from filing for Missouri.
For tax years 2020 and forward, the tax rate is 4 percent. For tax years 2019 and prior, the tax rate is 6.25 percent.
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 at the time of filing. The shareholder may submit payment with their return using Form MO-1040V which can be found on the Department’s website at dor.mo.gov/forms. Payment can be submitted on the Department’s website at https://dor.mo.gov/taxation/individual/pay-online.html.
Your Missouri return is due the 15th day of the 4th month following the year end. If your short period return ended November 30, 2018, then your Missouri corporation return is due March 15, 2019. 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.
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.
You would file Form MO-1120.
If I am filing an amended Missouri return to carry back a federal net operating loss, what documentation should I include?
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 2020 and the previous tax periods are consolidated losses, attach a copy of the consolidated Federal Form 1120 for 2020 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.
What do I need to provide to the Missouri Department of Revenue if I claim non-business or wholly passive investment income (non-Missouri source income) for tax years 2019 and prior?
NOTE: For tax years 2020 and forward, see nonapportionable income (NAI) Q & A below.
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.
What do I need to provide to the Missouri Department of Revenue if I claim nonapportionable income (MO-NAI) for tax years 2020 and forward?
Complete this schedule only if you apportion income to Missouri and to other states (using Method Two A, or, if applicable, Method Seven) and you have classified income as nonapportionable income.
“Nonapportionable income” means all income other than apportionable income. The classification of income by the labels customarily given them, such as interest, dividends, rents, and royalties, is not conclusive in determining whether the income is apportionable or nonapportionable income. Nonapportionable income will be considered only if a detailed Form MO-NAI is completed and attached.>
What information must I provide to the Missouri Department of Revenue if I am filing an amended Missouri consolidated federal/separate Missouri corporation income tax return due to a federal audit or a federal amended return?
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).
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.
Complete Form MO-MS if taxable corporation income is not 100 percent from Missouri sources. This form must be completed even if Missouri taxable corporation income is zero.
Missouri statutes provide a number of methods for determining Missouri taxable income from Missouri sources. Choose only the appropriate one of the listed methods and enter the method number on Form MO-1120, Line 9 (Method). Once an election has been made, it cannot be changed with respect to the same taxable period.
METHOD TWO A (Receipts Factor Apportionment) — Section 143.455.2, RSMo. See instructions (page 9) for completing Method Two A. METHOD THREE (Transportation) — Section 143.455.14, RSMo. METHOD FOUR (Railroad) — Section 143.455.15, RSMo. METHOD FIVE (Interstate Bridge) — Section 143.455.16, RSMo. METHOD SIX (Telephone and Telegraph) — Section 143.455.17, RSMo. METHOD SEVEN - This method can be used only with prior approval from the Missouri Director of Revenue or pursuant to a Missouri regulation creating an alternative industry-specific method under Section 143.455.13(1), RSMo.
For all tax years beginning on or after January 1, 2020, a corporation shall determine its income derived from sources within this state by allocating and apportioning its net income.
A taxpayer must have income from business activity taxable by this state and at least one other state to apportion and allocate income. Income from business activity includes apportionable and nonapportionable income.
The numerator of the receipts factor is generally all gross receipts in Missouri from transactions and activity in the regular course of the taxpayer’s trade or business.
The denominator of the receipts factor is generally all gross receipts received by a taxpayer from transactions and activity in the regular course of its trade or business.
However, receipts from hedging transactions or from the maturity, redemption, sale, exchange, loan, or other disposition of cash or securities (e.g. stocks, stock options, bonds) must not be included in either the numerator or denominator of the receipts factor.
Please see Form MO-MS instructions for more detail regarding method 2A.
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.
Who can discuss a corporate income tax question concerning payments, adjustments, etc. with the Missouri Department of Revenue?
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 2, or a person who has a Missouri power of attorney on file (Form 2827).
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 federal purposes, our company carried back a net operating loss 5 years with the Internal Revenue Service. Are we required to carry back our net operating loss 5 years on our Missouri return?
The guidelines for Missouri on a 5 Year carry back Net Operating Loss, due to the CARES ACT COVID-19 are as follows:
Missouri decouples from federal, however, the amended returns for the 5 years carry back must be filed with Missouri if the NOL is carried back for 5 years on the federal return. In carryback years five, four, and three, the corporation must remove the loss amount from MO-1120, Line 1 (Federal taxable Income could be zero but not negative) and add the NOL carried back for federal purposes as an income addition modification on the Missouri return MO-1120, Page 1, Line 3 (worksheet Page 3, Part 1, Line 3) and adjust the federal income tax deduction accordingly. No refund will be issued from the 5th, 4th or 3rd year.
How do I recuperate the 5 Year Net Operating Loss that was disallowed in years 5, 4, and 3?
The corporation should keep a record of the 5-year carryback losses disallowed for Missouri purposes, in carryback years five, four, and three. The loss can be recuperated in tax year(s) beginning January 1, 2021, and after. Complete MO-1120, Page 3, Part 2, Line 9, subtraction modification and report as a subtraction modification on form MO-1120, Page 1, Line 5. Include a recuperation schedule indicating the amounts of loss previously added back and indicating where they are now being subtracted.
NOTE: Subsidiaries must have their own loss to utilize, they cannot use the parent’s loss.
- State tax addback
- State and local bond interest (except Missouri)
- Fiduciary and partnership adjustment
- Donations claimed for the Food Pantry Tax Credit
- 165 business interest expense
- Interest from exempt federal obligations
- Federally taxable - Missouri exempt obligations
- Agriculture disaster
- 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
- 165 interest expense disallowed
Net Operating Losses
A Net Operating Loss Modification Worksheet (Form MO-5090), is completed if the corporation reported a net operating loss on Form MO-1120, Line 1 (federal taxable income from Federal Form 1120, Line 30), as a negative amount in the year of the loss, and is used to offset Missouri net positive additions reported on Line 3 (Missouri modifications – Additions).
If there is not an amount reported on Line 3 in the year of the loss, you are NOT required to complete the Form 5090, as there is not a net operating loss modification to be computed.
A net operating loss modification, Form 5090, is not computed for the year of the loss, but is computed on the year the loss is carried back or carried forward to.
If a taxpayer claimed a net operating loss deduction on its federal return and on its Missouri return in the year the initial loss was incurred, and the Missouri addition modifications (MO-1120, Line 4) are less than the subtraction modifications (MO-1120, Line 5), do you have to complete the Form 5090 Net Operating Loss modifications?
No, you do not need to complete the Form 5090 because the subtraction modification is more than the addition modification.
If the net operating loss deduction is composed of amounts carried back or carried forward to more than one year, is there more than one net operating loss modification?
Yes, a net operating loss modification, Form 5090, must be computed for each year the deduction is carried to. Missouri requires the net operating loss modification to be computed in the same order as the net operating loss is used for federal income tax purposes.
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.
The Employee Retention Credit is deducted at the federal level. There is no additional deduction on the Missouri return.
An affiliated group of corporations that files a consolidated federal income tax return may elect to file a consolidated Missouri income tax return. If the affiliated group incurs a consolidated net operating loss and has net addition modifications on its consolidated Missouri return, does the affiliated group have to file Form MO-5090?
Yes, the affiliated group would only file Form MO-5090 for each year the net operating loss deduction is carried forward or carried back to a consolidated Missouri return.
An affiliated group of corporations files a consolidated federal income tax return but does not file a consolidated Missouri income tax return. Some members of the group file separate company Missouri returns. If a separate company incurs a net operating loss and has net addition modifications on its separate company Missouri return, does the separate company have to file Form MO-5090?
Yes, the separate company would only file Form MO-5090 for each year the net operating loss deduction is carried forward or carried back on a separate company Missouri return.
If you still have questions, please check out other Business Tax FAQs.
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