This article provides a brief overview of how to file a California return for a unitary business, which is a commonly controlled group made up of two or more corporations.
Rules for filing a combined return
- If the group's income is derived wholly from within California, they can file separate returns or a combined return.
- California corporations that are unitary in nature can elect to file a combined return using the regular Form 100, or Form 100W, Water's-Edge Filers.
- The election is made on Schedule R-7, Election to File a Unitary Taxpayer's Group Return.
- The return must present the group's data by separate corporation, as well as the entire amount of unitary business income.
- The tax must show at least the minimum franchise tax for each member subject to it.
- S-Corporations can't generally be part of a combined group return.
- All members of the unitary group have to include CA in their state returns.
For further instructions, see FTB Pub.1061, Guidelines for Corporations Filing a Combined Report.