Corp 1120 questions and NY specific


S

Sally Jones

Hello.
I have two questions that I am hoping can be answered
regarding Fed form 1120.

Here goes....
1) Am I able to deduct half of the employment related taxes
I paid an employee via salary (except for federal tax)? Is
it just half the FICA total and/or half the Medicaid total
too? I refer to the "taxes and licenses" line on page 1 of
the deductions area. I know I can also include federal and
state unemployment taxes as well as NYS corp/franchise taxes
(hence, my next question).

2) On form 1120, I can deduct NYS taxes paid (i.e. NYS
Corporation tax/franchise tax) which effectively becomes an
add-back onto form CT-3. How/where is this amount gotten
from...is it franchise tax only (CT-3) and/or also include
MTA surcharge (CT-3M)?

Now for a New York-specific question (via forms CT-3/4 and
CT-3M/4M). 1) I had a CT-3M refund after filing and after
the year ended. How and where is this refund noted on next
year's CT-3/4 and/or CT-3M/4M?

Thanks,
Sally
 
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J

JMc

1) Am I able to deduct half of the employment related taxes
I paid an employee via salary (except for federal tax)? Is
it just half the FICA total and/or half the Medicaid total
too? I refer to the "taxes and licenses" line on page 1 of
the deductions area. I know I can also include federal and
state unemployment taxes as well as NYS corp/franchise taxes
(hence, my next question).
The employer paid taxes (SS, Med, SUTA, FUTA) go on line 17
of the 1120.

Make sure to report the GROSS wages paid to your employees
on line 12 or 13 (this would be their net plus their
withholdings - fed, state, etc)
2) On form 1120, I can deduct NYS taxes paid (i.e. NYS
Corporation tax/franchise tax) which effectively becomes an
add-back onto form CT-3. How/where is this amount gotten
from...is it franchise tax only (CT-3) and/or also include
MTA surcharge (CT-3M)?
Usually, on your state return, you add back all state taxes
based on income. It would be the amount that you record on
your your federal form 1120 (i.e. what you paid or accrued),
not necessarily the actual NYS tax liability for that year.

Per NYS instructions:
Line 4 - Enter the amount deducted on your federal return
for New York State taxes imposed under Article 9, sections
183, 183-a, 184, 184-a, and Articles 9-A and 32. This
includes the MTA surcharge. However, do not include New York
City taxes. Include the amount deducted for taxes paid or
accrued to the United States, its possessions, other U.S.
states, their political subdivisions, any foreign country,
and the District of Columbia, if the tax or taxes are on or
are measured by profits or income, or include profits or
income as a measure of tax, including taxes expressly in
lieu of the foregoing.

I'm not completely intimate with the NYS returns as I only
prepare about 3 a year. I believe the instructions are
refering to the franchise tax even if it is based on capital
or the minimum tax.
Now for a New York-specific question (via forms CT-3/4 and
CT-3M/4M). 1) I had a CT-3M refund after filing and after
the year ended. How and where is this refund noted on next
year's CT-3/4 and/or CT-3M/4M?
Usually, If you elected to carry the overpayment to the next
year, it is considered part of your estimated tax payments
and would be included on the estimated tax payment line of
the return.

I think, though, that you put the overpayment from prior
years on line 104 of the CT-3.
 
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