Our weekly series of tips related to state tax processing in ONESOURCE Income Tax continues. This week we highlight an extremely powerful feature in ONESOURCE Income Tax that lets you set the Return Type and Entity Type for each state.
State Entity Type
- Default is same as Federal, but sometimes for state purposes, it needs to be different. Example: For Federal purposes, the return is a Subsidiary, but for Indiana the return is filing as a single company
- Change the drop-down under the Entity Type column to ‘Single Company’
- The settings roll over from year to year
- It is important to look at this screen for EVERY entity and EVERY state, preferably early in the year for planning purposes. This can be done via ONESOURCE Data Exchange.
- Improper/ignored settings may cause states to calculate incorrectly so be sure to review this screen EVERY YEAR!