Combined reporting contrasted with consolidated returns
For federal purposes, a unitary group may be filing a federal consolidated return. Idaho law doesn’t provide for the filing of a consolidated return. Instead, a unitary group must use the combined reporting method. The combined report is often confused with a consolidated return, but they aren’t the same.
The combined reporting method doesn’t refer to whether the unitary group files one or more returns. If you file a single return for the group, this is called a group return, and discussed in the next section.
Some differences between a combined report and a federal consolidated return include the following:
| Idaho Combined Report | Federal Consolidated Return | |
|---|---|---|
| Computation of tax liability | Each corporation required to file in Idaho computes its own Idaho tax liability, net operating loss, and credits | The affiliated group computes a single income tax liability for the group |
| Who can be included | Unitary group – Parent-subsidiary and brother-sister corporation groups | Affiliated group – Only parent-subsidiary groups |
| Common ownership requirement | More than 50% | 80% or more |
Group return
For convenience, Idaho allows a unitary group to file one Idaho “group return” for the entire unitary group. Group returns don’t ignore the corporate identities of the individual corporations. Each corporation is considered a taxpayer even though it’s part of a unitary group and regardless of whether a group return is filed or each corporation files its own Idaho income tax return.
Idaho returns must include copies of the federal returns and spreadsheets detailing the information identified in the following table:
| Item | If Filing a Group Return | If Filing Separate Returns for Each Idaho Filer |
|---|---|---|
| Forms 41 and 42 Include total amounts for the combined group – provide by-company spreadsheets for each corporation in the unitary group | Same as if filing a group return |
| Form 41 includes total amounts for all Idaho filers – provide spreadsheets for each Idaho filer | Form 41 includes amounts only for filing corporation – provide spreadsheets for each filing corporation |
| Form 42 includes total amounts for all Idaho filers – provide Form 42A By-Company Apportionment Factor Details listing all corporations listed as transacting in Idaho. | Form 42 includes amounts only for filing corporation – provide Form 42A By-Company Apportionment Factor Details listing all corporations listed as transacting in Idaho. |