Filing Corporate Returns

Which Form to Use

You must use the correct form, as listed here

  • If you file an 1120 or 1120-IC-DISC federal income tax return, you must file a TC-20 Utah tax return.
  • If you file an 1120-S federal income tax return, you must file a TC-20S Utah tax return.
  • If you file an 1120-RIC, 1120-REIT, or 8023 federal return, you must file a TC-20MC Utah tax return
  • If you file an 1120-H or 990-T federal return and you have either federal taxable income or a Utah refundable tax credit that you wish to claim, you must file a TC-20MC Utah tax return

Inactive Corporations

You still have to file a return if the corporation is inactive. The tax is imposed for the right to do business in Utah. A return must be filed and at least the minimum tax paid, whether you exercise your right to do business or not.

The fact that a corporation ceases to do business, sells or distributes its assets, does not relieve it of the liability for filing Utah corporate franchise tax returns and paying the taxes due. A Utah corporation must be legally dissolved, withdraw, or be suspended through the Department of Commerce before it is relieved of this responsibility. A non-Utah corporation must receive a tax clearance certificate from the Tax Commission and withdraw from Utah through the Department of Commerce before it is relieved of this responsibility. Contact the Tax Commission to receive a customized tax clearance application for your corporation. Forms for dissolving or withdrawing the corporation are available from the Department of Commerce.

The State Tax Commission is required to send delinquent notices until the corporation is either voluntarily or involuntarily dissolved or withdrawn. Also, if it is your desire to maintain this corporate shell for a future purpose, or to reserve this corporate name for future use, you must keep filing the returns and pay the taxes due, otherwise suspension of the corporate authority will occur.

For Annual Report requirements and dissolution requirements, contact the Department of Commerce at 801-530-4849.

What to Include with Your State Form

  • A copy of the first five pages of the federal return.
    Any supporting schedules that show differences in state and federal income, expenses, etc.
    Any documents supporting tax credits claimed on the return or making elections.

Corporate Franchise Tax Return vs. Corporate Income Tax Return

From a functional view, there is no difference between these two forms. The rate for both is 5% of taxable income or $100, whichever is greater, and they use the same form. Any corporation, whether incorporated (domestic) or qualified (foreign or doing business in Utah), is required to file a franchise tax return. Foreign corporations must file franchise tax returns if they have a regular and established place of business or inventory, or own, rent, or lease property. Corporations subject to the income tax are corporations that derive income from Utah sources, but are not qualified or have a place of business in Utah. An example would be a trucking company that runs through Utah but has no fixed place of business in Utah.

Requesting Copies of Previously Filed Returns

To get a copy of your previously filed return:

  • Complete form TC-880, Request for Tax Records.
  • An officer of record must sign the form. An officer of record is anyone listed by the Department of Commerce as an officer in your corporation.
  • You may request the records in person or by mail.
  • There is a $6.50 fee for each record requested.

Additional Filing Information

  • The first franchise tax return for a corporation must begin on the date of incorporation in Utah, or the date the foreign corporation was qualified or began doing business in Utah, whichever was earlier.
  • The first return must end on the last day of the calendar month chosen as the taxable year end, and it cannot cover a period of more than twelve calendar months.
  • This return must be filed and the minimum $100 tax paid, whether or not any business was transacted and whether or not a profit was made.
  • Failure to file the return or pay the tax due may result in suspension, penalties, and interest. Penalties may include: a late filing penalty of $20 or 10% of tax due, whichever is greater and a late payment penalty of $20 or 10% of tax due, whichever is greater. Interest is computed on the tax amount owing at a variable rate set by the state from the due date of the return to the date of payment.

Carrying Losses Forward or Back

S-corporations, partnerships, and LLCs filing as an s-corporation or partnership may not carry losses forward or back. They must distribute the loss to their shareholders, partners, or members who use the loss on their income tax return.

C-corporation

For tax years beginning on or after 1/1/2018

Net Operating Losses may not be carried back.

Net Operating Losses may be carried forward but may only be applied against up to 80% of the receiving year’s income. To carry a loss forward report the amount of loss you wish to have applied on the TC-20 Schedule A, Line 16.

For tax years beginning before 1/1/2018

Submit form TC-20L, Utah Application for Refund from a Corporation Loss Carryback, to claim any refund resulting from a Utah net loss carryback. Do not submit an amended return for the purpose of claiming a loss carryback refund.

A C corporation filing form TC-20 may be entitled to carry back a current-year loss against income of the previous three years. The loss carryback is subject to a $1,000,000 limitation. To claim a refund from a Utah net operating loss carryback, the corporation must file form TC-20L, Utah Application for a Refund from a Corporation Loss Carryback.

Note: If there is a Utah net loss on line 15 of form TC-20 Schedule A, the corporation must carry the loss back (subject to a $1,000,000 limitation), unless the corporation elected to forego the federal net operating loss carryback for federal purposes. The federal election applies to the Utah net operating loss unless on line 15 of form TC-20 Schedule A for the loss year the corporation elects to forego the Utah net loss carryback. S corporations may not carry losses back or forward as such losses are passed thru to the shareholders.

Filing Extension

Corporations are automatically allowed an extension of up to six months to file a return without filing an extension form. This is an extension of time to file the return – NOT an extension of time to pay the taxes. To avoid penalty and interest, the prepayment requirements must be met on or before the original return due date and all returns must be filed within the six-month extension period.

Exemption From Taxes

Non profit organizations are taxable unless an exemption has been issued by the Utah State Tax Commission. Form TC-161, Utah Registration for Exemption from Corporate Franchise or Income Tax, must be submitted along with the appropriate documentation. The documentation required for each class of exempt organization is listed as follows:

  • Organizations that meet the exempt requirements of IRS Code 501 must supply a copy of the IRS exemption approval letter.
  • Those organizations that meet the exempt requirements of IRS Code 501 due to a group or blanket exemption must supply:
    1. a copy of the IRS group exemption approval letter, and
    2. a letter from the parent organization certifying that the organization is a duly authorized member of the exempt affiliated group
  • Farmers’ cooperatives must provide a copy of their most recently filed federal income tax return (IRS 990-C). If the organization has not been in existence long enough to have filed a federal tax return, the cooperative must provide:
    1. A letter from the IRS confirming the type of federal return required; or
    2. A letter certifying the date the federal return 990-C will be filed.
  • Homeowners associations that file IRS Form 1120H must provide a copy of their most recently filed federal income tax return. If the organization has not been in existence long enough to have filed a federal tax return, the association must provide:
    1. A letter from the IRS confirming the type of federal return required; or
    2. A letter certifying the type of federal return (i.e. 1120, 1120H, 1120EZ, 990, 990T) the organization is required to file.
  • Insurance companies that are subject to and pay the insurance premium tax need only make a written request for the exemption. The Tax Commission will determine the exemption based upon the request and by verifying that the company has filed and paid Utah Insurance Premium Tax returns.
  • Municipal building authorities may be granted exemption from the tax for years beginning 1997. The governing body of the municipality must provide a certificate that the municipality organized the municipal building authority as defined in Utah Code Section 17D-2-102.