GENERAL INFORMATION

1 Update as of July 13, 2021 The following instructions has been updated for: SCHEDULE L CALCULATION OF FRANCHISE TAX Act 389 of the 2021 Regular Legislative Session extended the suspension of the lower tier of the corporation franchise tax if the taxable capital is equal to or less than $1,000,000. The taxable capital is the amount on CIFT 620, Schedule L, Line 1. COVID-19 RELIEF BENEFITS Act 54 of the 2021 Regular Session of the Louisiana Legislature provides a corporate income tax exemption for all state and federal COVID-19 relief benefits. Act 54 defines such relief benefits, in pertinent part, as any gratuitous grant, loan, rebate, tax credit, advance refund, or other qualified disaster relief benefit directly or indirectly by the state or federal government as a COVID-19 relief This is retroactive and therefore will apply to the 2020 return.

2 See the instructions and the what s new page for more INFORMATION . CIFT-620 (1/21) Department of Revenue Page 21 IMPORTANTThe Louisiana Revenue Account Number must appear on each page of the return. Failure to provide your Revenue Account Number will result in an assessment for negligence penalty. The Federal Employer Identification Number (FEIN) cannot be used in place of the Revenue Account COMPLETE ALL APPLICABLE LINES AND SCHEDULES OF THE to furnish complete INFORMATION will cause processing of the return to be delayed and may necessitate a manual review of the corporation should retain, for inspection by a revenue auditor, working papers showing the balance in each account on the corporation s books used in preparing the return until the taxes to which they relate have prescribed.

3 When the corporation incurs a net operating loss, the working papers should be retained until such time that the net operating loss has MUST FILE?Domestic Corporations Corporations organized under the laws of Louisiana must file Form CIFT-620, Louisiana Corporation Income and Franchise Tax return, each year unless exempt from both Louisiana corporations must file Form CIFT-620, regardless of whether any assets are owned or any business operations are conducted, until a Certificate of Dissolution is issued by the Louisiana Secretary of Corporations Corporations organized under the laws of a state other than Louisiana that derive income from Louisiana sources must file Form CIFT-620 whether or not there is any tax foreign corporation is subject to the franchise tax if it meets any one of the criteria listed below:1.

4 Qualifying to do business in Louisiana or actually doing business within this state; or,2. Exercising or continuing the corporate charter within this state; or,3. Owning or using any part or all of the corporate capital, plant, or other property in this state whether owned directly or indirectly by or through a partnership, joint venture, or any other business organization of which the foreign corporation or entity is a related party as defined in Louisiana Revised Statute ( ) 47 corporation will be subject to the franchise tax if it meets the above criteria, even if it is not required to pay income tax under federal Public Law franchise tax for foreign corporations, or other taxable foreign entities, continues to accrue as long as the corporation exercises its charter, does business, or owns or uses any part of its capital or plant in Louisiana, and in the case of a qualified corporation.

5 Until a Certificate of Withdrawal is issued by the Louisiana Secretary of Entities Any entity taxed as a corporation for federal income tax purposes will also be taxed as a corporation for Louisiana income tax domestic or foreign entity taxed as a corporation pursuant to 26 Subtitle A, Chapter 1, Subchapter C for federal income tax purposes, is subject to franchise tax if it meets any of the criteria that subject a domestic or foreign corporation to franchise tax, with 2 exceptions. Any limited liability company qualified and eligible to make an election to be taxed in accordance with the provisions of 26 Subtitle A, Chapter 1, Subchapter S on the first day of the franchise tax period is not subject to franchise tax.

6 Any other entity that was acquired during the period January 1, 2012, to December 31, 2013, by an entity that was taxed pursuant to 26 Subtitle A, Chapter 1, Subchapter S, is not subject to franchise tax. Revised Statutes 47:221 through 47:227 provide guidance regarding the filing requirements of insurance companies. Refer to 47 , 47 , 47 , and 47 for INFORMATION concerning the treatment of farmers cooperatives, other cooperatives, shipowners protection and indemnity associations, political organizations, and homeowners Groups Louisiana law does not provide for filing consolidated returns.

7 Generally, separate corporate income and franchise tax returns must be filed by all corporate entities liable for a Louisiana tax S Corporations Louisiana income tax law does not recognize Subchapter S corporation status. An S corporation is required to file income tax in the same manner as a C corporation. However, in certain instances, all or part of the corporation income can be excluded from Louisiana income tax. For INFORMATION on the S corporation exclusion of net income, refer to the instructions for Line 1B. PASS-THROUGH ENTITY TAX ELECTION Revised Statute 47 allows Subchapter S Corporations, and other flow-through entities taxed as partnerships for federal income tax purposes, to elect to pay Louisiana income tax at the entity level.

8 An individual who is a shareholder, member, or partner of the entity is allowed to exclude the income taxed at the entity level that is included in their federal adjusted gross income. Once the election is made, it is effective for the entire taxable year for which it was made as well as all subsequent taxable years until the election is entity must make the election on Form R-6980, Tax Election for Pass-Through Entities, and must receive LDR acceptance of the election. See Louisiana Administrative Code (LAC) 61 for requirements to make the election. The election can be made during the taxable year prior to the taxable year in which the election is first effective, during the taxable year in which the election is first effective, or on or before the 15th day of the fourth month after the close of the taxable year in which the election is first effective.

9 Entities making the election should use Schedule J-1 to calculate their income tax. All Louisiana corporation income tax provisions apply and the entity is taxed in the same manner as if the entity filed a federal income tax return with the Internal Revenue Service as a C Corporation. The entity is allowed a federal income tax deduction equal to the federal income tax that would have been paid on the Louisiana income if the entity had filed as a C corporation for federal income tax purposes Net operating losses earned in the year the election was made or after the election was made are tax items of the entity and the loss and its carryforward must be reported on the CIFT-620.

10 Net operating losses earned in tax years prior to the election that have previously passed through to the owners are tax items of the owners and any carryforward remaining can only be used on the individual income tax return. See Revenue INFORMATION Bulletin 19-019 and LAC (C)(6) for more Administrative Code (C)(2) mandates electronic filing of the CIFT-620 and all supporting documentation for any entity making the election. The following documentation must be attached to the CIFT-620 when filed: A pro forma Federal Form 1120 completed as if the entity had filed as a C corporation for federal income tax purposes including all federal schedules necessary to compute the amount of federal tax that would have been due; Schedule K-1s as actually issued to the owners of the entity for the taxable year.