F. Forms, Payments, and Administrative Issues

  1. Is there a registration process for the combined group?
  2. Who is the "designated agent" of the combined group?
  3. Before a combined group files a combined return for the first time, will the designated agent have to register with the department as the designated agent?
  4. How does a designated agent make an estimated payment on behalf of the entire combined group?
  5. How would the combined group determine its taxable year and the income to report when members of the combined group have different taxable years?
  6. If the combined group's designated agent isn't registered to make payments via electronic funds transfer (EFT), can another member of the group make an estimated tax payment for the group?


  1. Is there a registration process for the combined group?

    A combined group does not have to pre-register as a combined group. The return filed by the designated agent of the combined group will identify the members of the combined group included in the return.

  2. Who is the "designated agent" of the combined group?

    The designated agent plays an important role and has significant responsibilities. The designated agent is generally the parent corporation, but may be any corporation appointed by the members, as long as the designated agent's taxable year is the same as the combined group's taxable year. Once the designated agent is appointed, it must generally remain the designated agent for as long as it is a member of that combined group.

    The designated agent performs the following duties on behalf of the entire combined group, to the extent those duties relate to the unitary business:

    • Files the combined return, any extensions, amended returns, and claims for refund or credit;
    • Remits all taxes, including estimated taxes applicable to the combined group;
    • Sends and receives correspondence with the department;
    • Participates in audits of the combined return, including the production of documents for audit;
    • Executes waivers, POAs, and closing agreements; and
    • Receives notices and refunds.

    Also, an appeal filed by the designated agent is considered filed by all members of the group.

  3. Before a combined group files a combined return for the first time, will the designated agent have to register with the department as the designated agent?

    The designated agent does not have to register in advance. The corporation which files the combined return will become the designated agent at the time it files the combined return on behalf of the combined group.

  4. How does a designated agent make an estimated payment on behalf of the entire combined group?

    The designated agent should use electronic funds transfer or a Form Corp-ES, Corporation Estimated Payment Voucher, in the same manner as it would make payments under separate entity filing.

    The designated agent is not required to register as the designated agent in order to submit estimated payments on behalf of the group. The designated agent is also not required to identify the members of the group at the time that it makes an estimated payment on behalf of the group. Rather, when the designated agent files the group's combined return, it will list estimated payments on Form 6, line 20 of the return. The designated agent's payments will be deemed to be made on a pro rata basis by all members of the combined group unless the designated agent specifies otherwise.

  5. How would the combined group determine its taxable year and the income to report when members of the combined group have different taxable years?

    If two or more members of a combined group file in a federal consolidated return, the combined group's taxable year is the taxable year of that federal consolidated return. If there is no federal consolidated return or there is more than one, the combined group's taxable year is the taxable year of the designated agent. In all cases, the designated agent's taxable year must be the same as the combined group's taxable year.

    If a taxable year of a member of a combined group differs from the taxable year of the combined group, the designated agent shall elect to determine the portion of that member's income to be included in one of the following ways:

    1. Prepare a separate income statement from the books and records for the months included in the combined group's taxable year.
    2. Include all of the income for the year that ends during the combined group's taxable year. Once a combined group decides to elect this method, the same election must be made in each succeeding year, and the election is irrevocable except upon written approval by the department (sec. 71.255 (8), Wis. Stats.).

    Example:

    Corporation A becomes a member of Combined Group B on April 1, 2014, and has a tax year ending December 31. Combined Group B has a fiscal year ending March 31. Combined Group B may elect one of the following ways to determine the portion of Corporation A's income in its 2014 (fiscal year end March 31, 2015) combined return:

    1. Convert Corporation A's records to Combined Group B's tax year by filing a separate short-year return for Corporation A covering January 1, 2014, through March 31, 2014. Prepare a separate income statement and include Corporation A's income for the period April 1, 2014, through March 31, 2015, in Combined Group B's 2014 combined return (fiscal year end March 31, 2015).
    2. Include all of the income from Corporation A's year that ends during Combined Group B's taxable year. Combined Group B's 2013 combined return (fiscal year end March 31, 2015), would contain Corporation A's income from the period January 1, 2014, through December 31, 2014. Once Combined Group B elects to use this method, it is irrevocable except upon written approval by the Department.
  6. If the combined group's designated agent isn't registered to make payments via electronic funds transfer (EFT), can another member of the group make an estimated tax payment for the group?

    Yes. If a corporation other than the designated agent makes an estimated payment for the group, the department will be able to apply that payment to the combined return if the corporation properly reports the payment on Form 6, line 20, at the time the combined group files its return. However, payment of estimated taxes is one of the responsibilities of the designated agent as explained in F2 above. The general rule (s. Tax 2.66, Wis. Admin. Code), provides that only the designated agent of a combined group may make estimated tax payments applicable to a combined return, so the designated agent should register with the department to make payment via electronic funds transfer (ETF).

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Phone: (608) 266-1143
Email additional questions to DORCombinedReporting@revenue.wi.gov

December 16, 2014