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2022 WEST VIRGINIA CORPORATION NET INCOME TAX
Enlarge image | 2022 WEST VIRGINIA CORPORATION NET INCOME TAX |
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Contents ............................................................................................................................................................................................ 2
IMPORTANT INFORMATION FOR 2022 .............................................................................................................................................. 3
TAX RATES 3
RETURNED PAYMENT CHARGE 3
TAXPAYER RESPONSIBILITIES ............................................................................................................................................................. 4
FILING YOUR CORPORATE RETURNS 4
PAYMENT OF THE TAX 4
REFUNDS 4
SELLING OR DISCONTINUING YOUR BUSINESS 4
GENERAL INFORMATION ................................................................................................................................................................... 5
ASSISTANCE 5
CORPORATION NET INCOME TAX 5
EXEMPT ORGANIZATIONS 5
PAYMENT OF TAX 5
EXTENSION OF TIME TO FILE 6
WHERE TO FILE 6
ESTIMATED TAXES 6
RETURN CHANGES 6
FILING METHOD 7
TAXABLE YEAR/METHOD OF ACCOUNTING 7
SUPPORTING FEDERAL INFORMATION 7
INTEREST 7
ADDITIONS TO TAX 8
COMPLETION AND SIGNATURE 8
CHANGES MADE BY THE IRS TO FEDERAL RETURN 9
CORPORATE AMENDED RETURNS 9
CONSISTENCY IN REPORTING 9
CONFIDENTIAL INFORMATION 9
REPORTING WEST VIRGINIA INCOME TAX WITHHOLDING CREDIT 10
FORM CIT-120 INSTRUCTIONS ......................................................................................................................................................... 11
SCHEDULE 1–SEPARATE ENTITY FILER WEST VIRGINIA CORPORATIONS WHOLLY IN WV 11
SCHEDULE 2 – SEPARATE ENTITY FILER WITH MULTISTATE ACTIVITY 12
CIT-120, PAGE 2 13
SCHEDULE B: ADJUSTMENTS TO FEDERAL TAXABLE INCOME 14
ADJUSTMENTS INCREASING FEDERAL TAXABLE INCOME 14
FOREIGN SOURCE INCOME WORKSHEET PETITIONING FOR AN ALTERNATIVE METHOD OF APPORTIONMENT 14
ADJUSTMENTS DECREASING FEDERAL TAXABLE INCOME 15
SCHEDULE B-1 ALLOWANCE FOR GOVERNMENTAL OBLIGATIONS/
OBLIGATIONS SECURED BY RESIDENTIAL PROPERTY (§ 11-24-6 (f)) 16
SCHEDULE C – SCHEDULE OF TAX PAYMENTS 16
SCHEDULE D – REPORTABLE ENTITIES 16
CIT-120TC: SUMMARY OF CORPORATION NET INCOME TAX CREDITS 17
SCHEDULE NOL: WV NET OPERATING LOSS CARRYFORWARD CALCULATION (§11-24-6(d)) 17
WHO SHOULD COMPLETE SCHEDULE NOL? 17
TOTAL NET OPERATING LOSS CARRYFORWARD DEDUCTION FOR CURRENT TAXABLE YEAR. 18
CIT-120 APT – ALLOCATION AND APPORTIONMENT FOR MULTISTATE CORPORATIONS 19
CIT-120U 21
COMBINED REPORTING 24
COVER PHOTO HOTOGRAPHP BY ASEY K AILESB
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IMPORTANT INFORMATION FOR 2022
For periods beginning on or after January 1, 2022, annual returns will have a due date of April 18, 2023 and an extended
due date of October 15, 2023. Fiscal and 52/53-week returns will be due on the 15th day of the fourth month following
the end of the period with an extension period of six months.
TAX RATES
● The Corporation NetIncome Tax Rate is 6.5% (§11-24-4).
● Effective January 1, 2019, taxpayers who had annual remittance of any single tax equal to or greater than
$50,000 during the fiscal year are required to electronically file returns and make payments using Electronic
Funds Transfer (EFT) for periods beginning on or after January 1.
● Failure to comply with the requirement to remit payments by EFT without first obtaining a waiver may result in
a civil penalty of three (3) percent of each payment which was to be paid by EFT. Visit our website
www.tax.wv.gov for additional information.
RETURNED PAYMENT CHARGE
The Tax Department will recover a $15.00 fee associated with any returned bank transactions. These bank transactions
include but are not limited to the following:
● Direct Debit (payment) transactions returned for insufficient funds.
● Stopped payments.
● Bank refusal to authorize payment for any reason.
● Direct Deposit of refunds to closed accounts.
● Direct Deposit of refunds to accounts containing inaccurate or illegible account information.
Checks returned for insufficient funds will incur a $28.00 fee.
The fee charged for returned or rejected payments will be to recover only the amount charged to the Tax Division by
the financial institutions.
Important : There are steps that can be taken to minimize the likelihood of a rejected financial transaction occurring:
● Be sure that you are using the most current bank routing and account information.
● If you have your tax return professionally prepared, the financial information used from a prior year return often
pre-populates the current return as a step saver. It is important that you verify this information with your tax
preparer by reviewing the bank routing and account information from a current check. This will ensure the
information is accurate and current in the event that a bank account previously used was closed or changed
either by you or the financial institution.
● If you prepare your tax return at home using tax preparation software, the financial information used from a
prior year return often pre-populates the current return as a step saver. It is important that you verify this
information by reviewing the bank routing and account information from a current check. This will ensure the
information is accurate and current in the event that a bank account previously used was closed or changed
either by you or the financial institution.
● If you prepare your tax return by hand using a paper return, be sure that all numbers requesting a direct deposit
of refund entered are clear and legible.
● If making a payment using MyTaxes, be sure that the bank routing and account number being used is current.
● If scheduling a delayed debit payment for an electronic return filed prior to the due date, make sure that the
bank routing and account number being used will be active on the scheduled date.
● Be sure that funds are available in your bank account to cover the payment when checks or delayed debit
payments are presented for payment.
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TAXPAYER RESPONSIBILITIES
FILING YOUR CORPORATE RETURNS
Returns should be filed by the due date. You may obtain forms by calling 1-800-982-8297. Forms may also be obtained
from any of our regional field offices or from the Tax Division website at tax.wv.gov.
Failure to file returns will result in your account being referred to our Compliance Division for corrective action. Please file
all required tax returns even if you owe no tax for the reporting period. All applicable pages of the return must be filed.
PAYMENT OF THE TAX
The full amount of tax owed is due and payable on the original due date of the tax return. Failure to pay the full amount
of tax by the due date will result in interest and penalties being added to any unpaid amount of tax. If you are unable to
pay the full amount of tax on the due date, you should file your tax return along with a written explanation of why you
are unable to pay and when you will pay the tax due.
REFUNDS
You are entitled to a refund of any amount that you overpaid. All or part of any overpayment may be applied as a credit
against your liability for such tax for other periods. A claim for refund (usually a tax return showing an overpayment) must
be filed within three years of the due date of the return or two years from the date the tax was paid, whichever expires
later. The overpayment will be used by the Tax Department against other tax liabilities due.
If the Tax Department does not respond to your request within six months of the due date or the extended due date on
overpayment of Corporation Net Income Tax, you may submit in writing a request for an administrative hearing to present
your reasons why you feel you are entitled to the refund. Interest is allowed and paid on any refund upon which the
Department has failed to timely act and which is final and conclusive.
If the Tax Department denies or reduces a request for a refund, a written request for an administrative hearing may be
submitted. Failure to respond to a denial or reduction within sixty days will result in the denial/reduction becoming final
and conclusive and not subject to further administrative or judicial review.
SELLING OR DISCONTINUING YOUR BUSINESS
If you sell or discontinue your business, notify the Tax Department in writing as soon as possible after your business is sold
or discontinued. All final tax returns should be filed.
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GENERAL INFORMATION
The information in this booklet is for calendar year 2022 returns and for fiscal year returns beginning in 2022 and ending
in 2023. The information in this book is intended to help you complete your returns and is not a substitute for tax laws
and regulations.
Starting in tax year 2020, the forms have been redesignated, changing “CNF” to “CIT”.
ASSISTANCE
Address questions to the West Virginia Tax Division, Taxpayer Services, PO Box 3784, Charleston, WV 25337-3784 or by
telephone at (304) 558-3333, toll free at 1-800-982-8297.
CORPORATION NET INCOME TAX
The Corporation Net Income Tax is a tax on the West Virginia taxable income of every domestic or foreign corporation
which enjoys the benefits and protections of the government and laws in the State of West Virginia or derives income
from property, activity or other sources in West Virginia. The term “corporation” includes a joint stock company and any
association or other organization which is taxable as a corporation under federal income tax laws.
The West Virginia Corporation Net Income Tax is a federal conformity tax in that the starting point in computing West
Virginia taxable income is the federal taxable income of the corporation. Certain increasing and decreasing adjustments,
as required by state law, must be made to federal taxable income to arrive at West Virginia taxable income. Corporations
are required to allocate certain types of nonbusiness income to West Virginia and apportion their remaining income. The
Corporation Net Income Tax rate is six and one-half percent (.065).
EXEMPT ORGANIZATIONS
Any corporation exempt from federal income tax is also exempt from West Virginia Corporation Net Income Tax. In
addition, certain insurance companies, certain production credit associations, trusts established under 29 U.S.C. 186, and
other organizations specifically exempt under the laws of West Virginia are also exempt.
If you are a tax-exempt organization with unrelated business income that is subject to federal tax, you must pay the West
Virginia Corporation Net Income Tax.
PAYMENT OF TAX
DUE DATE: A corporation’s annual West Virginia Corporation Net Income Tax Return is due on or before the 15th day of
the fourth month after the close of the taxable year. The filing of returns is required whether any tax is due. A tax-exempt
organization’s annual West Virginia Corporation Net Income Tax Return is due on or before the 15th day of the fifth month
after the close of the taxable year. Make your remittance payable to the West Virginia Tax Division.
PAYMENT OPTIONS: Effective January 1, 2022, taxpayers who had annual remittance of any single tax equal or greater
than $50,000 during calendar year 2020 or fiscal year 2019 are required to electronically file returns and make payments
using Electronic Funds Transfer (EFT) for periods beginning on or after January 1, 2022. Returns filed with a balance due
may use any of the following payment options: Check or Money Order made payable to the West Virginia Tax Division,
Electronic Funds Transfer or Payment by Credit Card. Visit tax.wv.gov for additional payment information. Return Filer's
filing as a Combined Separate or C ombined Group must pay with EFT to the Surety account not to each separate
member within the group.
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EXTENSION OF TIME TO FILE
An extension of time to file a federal return is automatically accepted by West Virginia as an extension of time to file the
West Virginia return. A copy of the federal extension form must be attached to the West Virginia return when filed and
the extended due date must be entered on top of the return. Returns filed after the due date, without supporting
documents and extended due date entered on the top of the return, will be processed as late filed and interest and
penalties will be assessed.
A state extension of time to file may be obtained, even if a federal extension has not been requested. An extension of
time to file does not extend the time for payment of any tax due. If you have an extension of time to file, payment of any
tax due may be made by filing a West Virginia extension form (see instructions for Form CIT-120EXT). To avoid interest
and penalties, payment must be received on or before the due date of the return.
WHERE TO FILE
West Virginia Tax Division
Tax Account Administration
Corporate Tax Unit
PO Box 1202
Charleston, WV 25324-1202
ESTIMATED TAXES
Estimated Corporation Net Income Tax payments are required for any corporation which can reasonably expect its West
Virginia taxable income to be more than $10,000 (which equals a tax liability after tax credits of more than $650) and are
due in four equal installments on the 15th day of the fourth, sixth, ninth, and twelfth months of the tax year.
RETURN CHANGES
The following Schedules are new or have been updated in the 2022 tax period:
● Revised – UB-CR
● New Credits added to CIT-120TC
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FILING METHOD
The following filing methods may be used for filing your Corporation Net Income Tax (WV Code §11-24-13a).
SEPARATE ENTITY BASED: Use this method if filing a separate return and you are not engaged in a unitary business with
one or more other corporations.
Forms and schedules you may/will need to complete for a separate entity-based corporation return:
CIT-120 pages 1 & 2 CIT-120 Schedule C
CIT-120 Schedule 1 CIT-120 Schedule D
CIT-120 Schedule 2 CIT-120 Schedule NOL
CIT-120 Schedule TC CIT-120 APT Schedules A1, A2
CIT-120 Schedule U CIT-120 APT Schedule B
CIT-120 Schedules B, B-1 Schedule WV-K1, WV-K1C, WV-NRW-2
What are the filing requirements? Corporations that are members of the same unitary business group must file a combined
report including all required information of every business engaging in the unitary business with the corporation. This
report must be filed with each members’ separate return unless the group elects to designate a corporation as surety and
file a combined return.
SEPARATE COMBINED: Use this method if filing a combined report but a separate return. Forms and schedules you
may/will need to complete a separate combined return are the same as required for Separate Entity Filers except that the
Schedule UB-CR is required.
ALL COMBINED FILERS: Must complete UB-CR and electronically file with return.
GROUP COMBINED: Corporations use this method if they are members of the same unitary business group and elect to
designate a surety. Taxpayer must designate surety FEIN in space provided.
Forms and schedules you may/will need to complete a group combined return:
CIT-120 pages 1 & 2 CIT-120 Schedule NOL
CIT-120 Schedule C CIT-120 Schedule UB
CIT-120 Schedule D CIT-120 Schedule UB-CR
CIT-120 Schedule TC Schedule WV-K1, WV-K1C, WV-NRW-2
CIT-120 Schedule U
TAXABLE YEAR/METHOD OF ACCOUNTING
You must use the same taxable year and method of accounting as you use for federal tax purposes.
SUPPORTING FEDERAL INFORMATION
Attach a copy of pages 1 through 5 of your signed federal income tax return and any applicable supporting
documents/schedules, as filed with the Internal Revenue Service to the West Virginia tax return. If you attach a pro forma
federal income tax return, the following consolidated return data is also required: a copy of pages 1 through 5 of the
consolidated federal return plus supporting schedules showing the consolidation income statement, balance sheet,
eliminations and adjustments; a copy of federal Form 851; and a signed statement explaining the differences, if any,
between the income statement and balance sheet reported for federal consolidated filing and that reported for West
Virginia purposes. Include Schedule M-3 when applicable.
Corporations shall attach the federal documents to the West Virginia Corporation Net Income Tax Return.
For All Combined Filers: Copy of Federal Return upto and including the Federal M-3's and proof of any other adjustments
you are claiming on the West Virginia return.
INTEREST
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The entire tax due must be paid on or before the due date of the tax return (determined without regard for an extension
of time to file). If the entire tax due is not paid on or before the due date, you must pay interest on the amount of the
underpayment from the due date to the date paid. Interest is always due, without exception, on any underpayment of
tax.
Interest is imposed by an adjusted rate established by the Tax Commissioner. The interest rate will be determined and in
effect for periods of six months. Interest rates in effect for various periods are:
7/1/02 to 12/31/16 9.5%
1/1/17 to 12/31/17 8%
1/1/18 to 12/31/18 8.75%
1/1/19 to 12/31/19 9.75%
1/1/20 to 12/31/20 9.25%
1/1/21 to 12/31/21 7. 75%
1/1/22 to 12/31/22 %
Contact the West Virginia Tax Division, Taxpayer Services Division at 1-800-982-8297, for the interest rate in effect for
other periods. Also, Administrative Notices may be found online at tax.wv.gov notifying of adjusted interest rates.
ADDITIONS TO TAX
LATE FILING. Additions to tax are imposed for failure to file a return on or before the due date (determined with regard
to an extension of time to file). On any amount of tax shown to be due on the return, the additions to tax for late filing is
five percent (.05) per month or any part of a month not to exceed twenty-five percent (.25).
LATE PAYMENT. Additions to tax are imposed for failure to pay all tax shown to be due on a return on or before the due
date (determined without regard to an extension of time to file). The additions to tax for late payment is imposed at the
rate of one half of one percent (.005) per month or part of a month not to exceed twenty-five percent (.25).
When both the five percent (.05) additions to tax for late filing and the one half of one percent (.005) additions to tax for
late payment are imposed, the maximum monthly percent is five percent (.05) not to exceed fifty percent (.50) of the tax
due.
FAILURE TO PAY ESTIMATED TAX. Corporations that are required to make estimated payments of their tax liability are
subject to additions to tax for failing to pay at least ninety percent (.90) of their annual tax liability. The additions are
imposed at the same rate as interest is imposed. See Form CIT-120U for more information on the additions to tax for
underpayment of estimated tax.
COMPLETION AND SIGNATURE
All applicable sections of the return must be completed and all required supporting documents must be attached. An
incomplete return will not be accepted as timely filed. The return must be signed by an authorized officer. If the return is
prepared by someone other than the taxpayer, the preparer must also sign the return and enter his or her complete
address.
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CHANGES MADE BY THE IRS TO FEDERAL RETURN
Any corporation whose reported income or deductions are changed or corrected by the Internal Revenue Service or
through renegotiation of a contract with the United States is required to report the change or correction to the West
Virginia Tax Division. This report must be made within ninety days of the final determination by filing an amended/RAR
return and attaching a copy of the revenue agent’s report detailing such adjustments.
For All Combined Filers: Amended/ RAR Returns MUST be E-Filed and a Complete new return with all new schedules, a
copy of the prior return is not required.
CORPORATE AMENDED RETURNS
A corporation that filed an amended return with the Internal Revenue Service must file an amended return with the West
Virginia Tax Division within ninety days of filing the amended federal return.
● File Form CIT-120, pages 1 and 2, completing all appropriate lines and checking the Amended box under “Return
Type” on page 1. Because WV uses barcodes on tax forms it is important to use the appropriate forms for the
tax year being amended.
Example: If amending a tax return for the period ending 12-31-2018; use the 2018 CNF-120 forms.
Note: Tax forms for different years may use different line numbers; read the line instructions carefully.
● If you received a refund, or had an amount credited on the original return, enter that amount on Line 14 of Form
CIT-120, page 2. For 2022, years prior to 2020 should file CNF-120, and enter any refund or amount credited on
line 14, page 2.
● Attach all schedules that have amended figures in order to verify the changes made to the return.
Example: There was a change made to your Adjustments to Federal Taxable Income; be sure to attach Schedule
B with the amended figures.
Amended Returns filed for the purpose of obtaining a refund of an overpayment must be filed within three years of the
due date of the return (with regard to an extension of time to file), or two years from the date the tax was paid, whichever
expires later. If your Amended Return has a balance due, send the payment along with the tax return.
CONSISTENCY IN REPORTING
In completing your West Virginia Corporation Net Income Tax Return, if you depart from or modify past procedures for
classifying business income and nonbusiness income, valuing property or including or excluding property in the property
factor, treating compensation paid in the payroll factor, including or excluding gross receipts in the sales factor, you must
disclose by attaching a separates schedule detailing the nature and extent of the variances or modifications.
If a corporation makes sales of tangible personal property which are shipped into a state in which the corporation is not
taxable, you must identify the state to which the property is shipped and report the total amount of sales assigned to such
state.
CONFIDENTIAL INFORMATION
Tax information which is disclosed to the West Virginia Tax Division, whether through returns or through department
investigation, is held in strict confidence by law. The Tax Division, the United States Internal Revenue Service and other
states have agreements under which tax information is exchanged. This is to verify the accuracy and consistency of
information reported on federal, other state, and West Virginia tax returns.
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 Enlarge image | REPORTING WEST VIRGINIA INCOME TAX WITHHOLDING CREDIT A West Virginia Income Tax Withholding Credit is created when a payment is made by another entity for the benefit of the Corporation filing this return. ELECTRONIC FILED RETURNS If you are claiming a withholding credit you must submit Form WVK-1C, WVK-1, NRW-2, or 1099 as part of your electronic return. Only electronically submitted data is acceptable. No PDF attachments will be accepted for claiming a withholding credit. These documents will be used to verify the withholding credits claimed on your return. If withholding is claimed as a result of the Nonresident Sale of Real Estate, the form WV/NRSR and all supporting documentation should be on file with the Tax Division prior to filing the CIT-120. No PDF attachments will be accepted for claiming a NRSR withholding credit. Failure to file the required WV/NRSR, federal Schedule D and other supporting documents prior to filing the CIT-120 will result in return processing delays. PAPER FILED RETURNS Enter the total amount of West Virginia tax withheld on your behalf by another entity on your return. A completed Form WVK-1C, WVK-1, NRW-2, or 1099 must be enclosed with your paper return. Failure to submit these documents will result in the disallowance of the withholding credit claimed. Note: Local or municipal fees cannot be claimed as West Virginia income tax withheld. If the withholding source is for a nonresident sale of real estate transaction, a form WV/NRSR must be completed and on file with the Tax Division prior to submitting a tax return. Additionally, a Federal Schedule D must be submitted. If withholdings are related to form WV/NRSR, please indicate in the box provided on line 12. PAGE 10 2022 CIT-120 - CORPORATION NET INCOME TAX INSTRUCTIONS |
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FORM CIT-120 INSTRUCTIONS
Enter beginning and ending tax year dates covered by this return. Clearly print or type your name and address. If filing
under extension, enter the extended due date. In the “Check Applicable Boxes” section, mark all that apply to the
corporate return being filed.
*********
Attachments and statements required: Attach all additional information and statements required as they apply to your
filing method.
Attach a copy of pages 1 through 5 of your signed federal return (Form 1120), and Schedule M-3 if applicable. If filing
separate West Virginia and consolidated federal, attach your pro forma federal, consolidated federal Form 851 (Affiliation
Schedule), plus spreadsheets of the income and expenses, and balance sheet entries for EVERY corporation included in
the consolidated federal return.
Attach a schedule of other states in which you have property or paid salaries during the taxable year. Indicate those states
in which you are filing corporate tax returns based on, or measured by, net income for this taxable year.
Attach a schedule of other states in which you have sales of tangible personal property during the taxable year and in
which you are not taxed (e.g. P.L.86-272). Indicate by state the amount of sales not subject to tax.
If filing as a Separate Filer, complete Schedule 1 if you are a wholly WV corporation or Schedule 2 if you have multistate
activity.
SCHEDULE 1–SEPARATE ENTITY FILER WEST VIRGINIA CORPORATIONS WHOLLY IN WV
Line 1 – Enter total taxable income from your federal income tax return Form 1120 or your pro forma return.
Line 2 – Enter total increasing adjustments from Form CIT-120, Schedule B, line 12.
Line 3 – Enter total decreasing adjustments from Form CIT-120, Schedule B, line 25.
Line 4 – West Virginia adjusted taxable income. Add line 1 plus line 2 minus line 3.
Line 5 – Enter the total from column 6 of Schedule NOL.
Line 6 – Subtract line 5 from line 4.
Line 7 – REIT Inclusion and other Taxable income.
Line 8 – Add lines 6 and 7.
Line 9 – 2022 WV Corporate Tax Rate .065.
Line 10 – Multiply line 8 by the Corporation NetIncome Tax Rate in line 9.
Line 11 – Enter the result from column 2, TOTAL CREDITS Line of completed Form CIT-120TC. The total amount of credits
cannot exceed the net income tax on line 10.
Line 12 – Subtract line 11 from line 10. This is your Adjusted Corporation NetIncome Tax. Enter this amount on CIT-120,
page 2, line 9.
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SCHEDULE 2 – SEPARATE ENTITY FILER WITH MULTISTATE ACTIVITY
Line 1 – Enter total taxable income from your federal income tax return Form 1120 or your pro forma return.
Line 2 – Enter total increasing adjustments from Form CIT-120, Schedule B, line 12.
Line 3 – Enter total decreasing adjustments from Form CIT-120, Schedule B, line 25.
Line 4 – West Virginia adjusted taxable income. Add line 1 plus line 2 minus line 3.
Line 5 – Total nonbusiness income allocated everywhere (Form CIT-120APT, Schedule A-1, line 9, column 3).
Line 6 – Subtract line 5 from line 4. This is your total income subject to apportionment.
Line 7 – Complete Form CIT-120APT Schedule B and enter the result of part 1, line 8; part 2 or part 3, column 3.
** IMPORTANT NOTE REGARDING LINE 7 **
FORM CIT-120APT SCHEDULE B MUST BE COMPLETED AND ATTACHED.
FAILURE TO ATTACH COMPLETED FORM WILL RESULT IN 100% APPORTIONMENT TO WEST VIRGINIA.
Line 8 – Line 6 multiplied by line 7
Line 9 – Enter the total allocation of nonbusiness income allocated to West Virginia from CIT-120APT, Schedule A2, line 13.
Line 10 – Add lines 8 and 9.
Line 11 – Enter the total from column 6 of Schedule NOL.
Line 12 – Subtract line 11 from line 10.
Line 13 – REIT Inclusion and other Taxable income.
Line 14 – Add lines 12 and 13.
Line 15 – 2022 WV Corporate Tax Rate .065.
Line 16 – Multiply line 14 by the Corporation Net Income Tax Rate in line 15.
Line 17 – Enter the result from column 2, TOTAL CREDITS Line of completed Form CIT-120TC. The total amount of credits
cannot exceed the net income tax on line 16.
Line 18 – Subtract line 17 from line 16. This is your Adjusted Corporation Net Income Tax. Enter this amount on CIT-120,
page 2, line 9.
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CIT-120, PAGE 2
Line 9 – Enter the adjusted Corporation Net Income Tax amount from either Schedule 1, line 12, Schedule 2, line 18 or
Schedule UB-CR, total of all groups.
Line 10 – Prior year carry forward credit from your previous Corporation Net Income Tax return.
Line 11 – Enter total estimated tax payments and any extension payment made with Form CIT-120EXT.
Line 12 – Enter the total amount of withholding credit from Form WVK-1C, NRW-2, and/or 1099. Check box if withholding
is from NRSR (nonresident sale of real estate).
Line 13 – Add lines 10 through 12. This total MUST match the total payments on Schedule C.
Line 14 – If this is an amended return, enter the amount of any overpayment previously refunded or credited.
Line 15 – Subtract line 14 from line 13. This is your company’s total payments.
Line 16 – If line 15 is larger than line 9 enter your overpayment here.
Line 17 – Enter the amount of the overpayment on line 16 to be credited to next year’s taxes.
Line 18 – Enter the amount of the overpayment on line 16 to be refunded (subtract line 17 from line 16).
Line 19 – If line 15 is smaller than line 9, enter the tax due on this line.
Line 20 – Determine the amount of interest due. For information regarding interest, see the general information on page
8 of this instruction booklet.
Line 21 – Determine additions to tax due. For information regarding additions to tax, see the general information on page
8 of this instruction booklet.
Line 22 – Enter the amount of penalty for underpayment of estimated tax from Form CIT-120U, line 6.
Line 23 – Add lines 19 through 22. This is the balance due with this return. Make checks payable to the West Virginia Tax
Division or see www.tax.wv.gov for other payment options.
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SCHEDULE B: ADJUSTMENTS TO FEDERAL TAXABLE INCOME
ADJUSTMENTS INCREASING FEDERAL TAXABLE INCOME
Line 1 – Enter exempt interest or dividends from any state or local bonds or securities from your federal return Form
1120, Schedule K or on Schedule M-1.
Line 2 – Enter the amount of US Government obligation interest or dividends not exempt from state tax, less any related
expenses not deducted on the federal return. Attach supporting documentation.
Line 3 – Attach an itemized schedule of taxes based upon income from line 17 of your federal income tax return, Form
1120 or pro forma Form 1120.
Line 4 – Taxpayers can elect to expense the cost of certain air and water pollution control facilities located in West
Virginia in the year in which the cost of acquisition, construction or development was paid or incurred. Eligible
air and water pollution control facilities are those located in West Virginia that are “certified pollution control
facilities” as defined by Section 169 of the Internal Revenue Code. If this election is made, the total amount of
any federal deduction for depreciation or amortization of such facilities is disallowed. The election is made on
the return for the year in which the cost is paid or incurred. Once made, the election or non-election is
irrevocable.
A taxpayer who reports all income to this state will make the adjustments for the cost of the facilities on CIT-
120 Schedule B, line 20. The depreciation or amortization on the facilities, including that attributable to cost
expensed this year as well as prior years, deducted on the federal return, is entered on CIT-120 Schedule B, line
4. A taxpayer who is subject to allocation and apportionment makes the adjustment for the cost of the facilities
on Form CIT-120APT Schedule A-2, line 10, column 3. The depreciation or amortization on the facilities deducted
on the federal return for this year as well as previous years, is entered on Form CIT-120APT Schedule A-2, lines
11 and 12 of column 3.
Line 5 – Corporations which are exempt from federal income tax are also exempt from West Virginia Corporation Net
Income Tax. If such a corporation has unrelated business taxable income (as defined by Section 512 of the
Internal Revenue Code), they must pay West Virginia Corporation Net Income Tax on the unrelated business
taxable income. Enter the unrelated business taxable income as reported on Federal Form 990T.
Line 6 – Enter the amount of Federal Net Operating Loss from Federal Form 1120, line 29a.
Line 7 – If you claim the West Virginia Neighborhood Investment Program Tax Credit, any deduction, decreasing
adjustment, or decreasing modification taken on your federal return for any charitable contribution made to
such Neighborhood Investment Program and for which the West Virginia credit is claimed, must be added back
on this line.
Line 8 – Taxpayers with foreign source income must adjust their federal taxable income by the amount of their taxable
income or loss from sources outside the United States. In determining foreign source income, the provisions of
Sections 861, 862, and 863 of the Internal Revenue Code apply.
Complete the following worksheet.
FOREIGN SOURCE INCOME WORKSHEET PETITIONING FOR AN ALTERNATIVE METHOD OF APPORTIONMENT
1. Taxable income from sources outside the United States
2. LESS foreign dividend gross-up
3. LESS subpart F income
4. West Virginia adjustment
If the amount on line 4 of the worksheet is a positive figure, enter it on CIT-120, Schedule B, line 19. If it is a negative
figure, enter the amount of the loss on CIT-120, Schedule B, line 8 without the negative sign.
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Attach copies of Federal Form 1118 to support your calculation. If you did not file Federal Form 1118, you must prepare
and file a pro forma Federal Form 1118 to support your adjustment. If you filed a consolidated Federal Form 1118 and file
separate or unitary West Virginia returns, attach both the true consolidated and a pro forma Federal Form 1118 to support
your adjustment.
Line 9 – Enter the amount of foreign taxes as deducted on your Federal Form 1120.
Line 10 – Add back for expenses related to certain REIT’s and regulated investment companies and certain interest and
intangible expenses (WV Code §11-24-4b).
Line 11 – Other increasing adjustments. Enter a brief description of any adjustment in the space provided.
Submit a statement for any adjustment entered.
Line 12 – Add lines 1 through 11. Enter the total on Form CIT-120, Schedule 1, line 2 or CIT-120, Schedule 2, line 2.
ADJUSTMENTS DECREASING FEDERAL TAXABLE INCOME
Line 13 – Enter the amount of refund or credit of income taxes or taxes based upon net income imposed by this state or any
other jurisdiction included in federal taxable income. Attach supporting documentation.
Line 14 – Enter the amount of interest expense on obligations or securities of any state or its political subdivisions disallowed
in determining federal taxable income. Attach supporting documentation.
Line 15 – Enter the amount of US Government obligation interest or dividends included in federal but exempt from state tax,
less related expenses deducted on your federal return. Attach supporting documentation.
Line 16 – Enter total salary expense not allowed on your federal return due to claiming the federal jobs credit and include a
copy of Federal Form 3800 or 5884. Note: this decreasing adjustment is only applicable to the Work Opportunity
Credit from Federal Form 5884.
Line 17 – Enter the total foreign dividend gross-up (IRC Section 78) from Federal Form 1120.
Line 18 – Enter the total subpart F income (IRC Section 951) from Federal Form 1120.
Line 19 – See instructions for CIT-120 Schedule B, line 8. If Foreign Source Income from worksheet line 4 is positive, enter the
amount here.
Line 20 – See instructions for CIT-120 Schedule B, line 4. Multistate corporations must use CIT-120APT, Schedule A2, line 10.
Line 21 – A decreasing adjustment to federal taxable income is allowed for employer contributions to a medical savings account
established pursuant to WV Code §33-16-15, to the extent included in federal taxable income, less any portion of the
employer’s contributions withdrawn for purposes other than payment of medical expenses. The amount taken as a
decreasing adjustment may not exceed the maximum amount that would have been deducted from the corporation’s
federal taxable income if the aggregate amount of the corporation’s contributions to individual medical savings
accounts established under WV Code §33-16-15 had been contributions to a qualified plan as defined under the
Employee Retirement Income Security Act of 1974 (ERISA), as amended.
Line 22 – Qualified Opportunity Zone business income. You must include a copy of IRS 8996.
Line 23 – Other decreasing adjustments. Enter a brief description of any adjustment in the space provided.
Submit a statement for any adjustment entered.
Line 24 – Taxpayers that own certain tax-exempt government obligations and/or obligations secured by certain residential
property located in West Virginia can take a special allowance that further reduces federal taxable income. Complete
Form CIT-120, Schedule B-1 to determine the amount of the allowance.
Line 25 – Add lines 13 through 24. Enter the amount here and on CIT-120, Schedule 1, line 3 or CIT-120, Schedule 2, line 3.
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SCHEDULE B-1 ALLOWANCE FOR GOVERNMENTAL OBLIGATIONS/
OBLIGATIONS SECURED BY RESIDENTIAL PROPERTY (§ 11-24-6 (F))
Taxpayers that own certain tax-exempt government obligations and obligations secured by certain residential property
located in West Virginia can take a special allowance that further reduces federal taxable income. Complete CIT-120
Schedule B-1 to determine the amount of the allowance. The value of these obligations and loans is determined using the
average of the monthly beginning and ending account balances. These account balances are determined at cost in the
same manner that such obligations, investments and loans are reported on the balance sheet of your federal tax return.
Lines 1 through 4 - Attach copy of worksheets supporting the calculation of average monthly balance.
Line 6 – Average the beginning and ending balance of Federal Form 1120, Schedule L, line 15.
Line 8 – CIT-120, Schedule 1, line 1 or Schedule 2, line 1 plus CIT-120, Schedule B, line 12 minus the sum of lines 13
through 23, plus Form CIT-120APT, Schedule A2, lines 10, 11, and 12.
SCHEDULE C – SCHEDULE OF TAX PAYMENTS
If the number of payments reported on Schedule C exceeds 10, you must file electronically.
Column 1 – Enter the name of the entity making the payment or issuing the withholding credit.
Column 2 – Enter the FEIN of the entity making the payment or issuing the withholding credit.
Column 3 – Enter the date of any payments made by, or on behalf of, the entity.
Column 4 – Enter a description of the type of payment made by, or on behalf of, the entity,
Column 5 – Enter the amount of the payment made by, or on behalf of, the entity.
Total Line – Sum of the payments shown in Column 5.
The total amount of payments must equal the amount reported on Form CIT-120, line 13.
SCHEDULE D – REPORTABLE ENTITIES
If any box is checked in the Reportable Entities Section of page 1, the name and FEIN of each reportable entity must be
entered on Schedule D.
If the number of entities exceeds ten (10) you must file electronically.
Column 1 – Enter the name of the reportable entity.
Column 2 – Enter the FEIN of the reportable entity.
Column 3 – Enter the name of the reportable entity’s parent.
Column 4 – Enter the FEIN of the parent.
Column 5– Enter the Alpha Character designation for the explanation of the relationship between reportable entity and
entity submitting this West Virginia Return.
A Pass through entity you are a partner, member, or shareholder doing business in WV
B Entity you own 80% of voting stock
C Entity that owned more than 80% of your stock
D Disregarded entity or QSUB
E Controlled Foreign Corporation
If the number of entities reported on Schedule D exceeds 10, you must file electronically.
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CIT-120TC: SUMMARY OF CORPORATION NET INCOME TAX CREDITS
The CIT-120TC, Summary of Corporation Net Income Tax Credits, is a form used by corporations to summarize the tax
credits that they claim against their Corporation Net Income Tax liability. In addition to completing the CIT-120TC, each
tax credit has a schedule or form that is used to determine the amount of credit that can be claimed. Please note that
some tax credit schedules require a completed application to be submitted and approved before the tax credit schedule
can be filed. Both the CIT-120TC and the appropriate credit calculation schedule(s) or form(s) must be attached to your
return in order to claim a tax credit.
Line 19 – Total credits: Add column 2, lines 1 through 18.
Note: The amount of credit used cannot be greater than the Corporation Net Income Tax assessed on the return. For
additional information and a copy of the tax credit schedules and applications please visit tax.wv.gov.
If you are claiming the Neighborhood Investment Program Credit, you are no longer required to enclose the WV NIPA-
2 credit schedule with your return. You must maintain the schedule in your files.
SCHEDULE NOL: WV NET OPERATING LOSS CARRYFORWARD CALCULATION (§11-24-6(D))
WHO SHOULD COMPLETE SCHEDULE NOL?
All corporations claiming a West Virginia net operating loss carry forward deduction on Form CIT-120, Schedule 1, line 5,
CIT-120, Schedule 2, line 11 or Schedule UB-CR, column 16 must complete this schedule to support their net operating
loss deduction. Schedule NOL is not a claim for refund. It is a calculation schedule to support the net operating loss
carryforward deduction.
Any amount claimed as a federal net operating loss deduction must be added back to federal taxable income on West
Virginia Form CIT-120, Schedule B, line 6 for a separate filer or column 2f (entity specific of applicable group) if a combined
filer. The West Virginia net operating loss carryforward deduction is entered on Form CIT-120, Schedule 1, line 5, Schedule
2, line 11 or Schedule UB-CR, column 16 of each applicable group.
West Virginia NOL generated in periods after 2017 can be carried forward indefinitely. Any WV Net Operating Loss
deduction is limited to 80% of taxable income starting in the 2022 taxable year. Note that rules for pre-2018 WV NOL
remain the same.
A net operating loss deduction of a multistate corporation is subject to West Virginia allocation and apportionment rules.
The West Virginia net operating loss deduction is limited to net operating losses incurred by a corporation which
performed business in West Virginia and filed Corporation Net Income Tax Returns in prior taxable years.
The amount of net operating loss deduction available to an affiliated group, which elects for the first time to file a
consolidated return for a taxable year ending after July 1, 1988, is limited to the net operating losses incurred by members
of the affiliated group which did business in West Virginia and filed separate West Virginia returns in prior years.
A West Virginia net operating loss deduction will not be allowed for net operating losses of those members of the affiliated
group which did no business in West Virginia in prior taxable years and were not required to file West Virginia Corporation
Net Income Tax Returns.
SRLY RULES.
The separate return limitation years (SRLY) rules set forth in Treasury Regulation §1.1502 apply in determining the
allowable West Virginia net operating loss deduction.
When the SRLY rules apply, a member of an affiliated group’s net operating loss carried forward from its separate return
year can only offset that portion of the taxable income attributable to that member of the group.
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Schedule NOL is designed to support the claiming of a West Virginia net operating loss carryforward deduction by
providing information on the year of the loss and how the loss was/is being used. Enter the year of loss for each NOL in
Column 1 and the FEIN of the entity incurring the the loss in Column 2. Columns 3 through 6 will determine current
available amounts and amounts eligible for carryforward.
Column 1 – Year of loss. Enter in column 1 the applicable tax year ending date(s) for the year(s) that you had net operating
loss(es).
Column 2 – Enter name and FEIN of the Consolidated Parent Corporation if you filed a consolidated return prior to 2009
and had a West Virginia Net Operating Loss or enter name and FEIN of all separate members’ West Virginia
net operating losses that filed separately prior to 2009.
Column 3 – Amount of West Virginia net operating loss. Enter the amount of West Virginia net operating loss that
corresponds to the year of the loss shown in Column 1.
Column 4 – Amount carried back to years prior to loss year. Enter the total amount of loss for the taxable year entered
in column 1 that was carried back to a year, or years prior to the year of the actual loss.
Column 5 – Amount carried forward to years prior to this year. Enter the total amount of loss for the taxable year entered
in column 1 that was carried forward to a year, or years, prior to the current taxable year.
Column 6 – Amount being used this year. Enter the amount of loss for the taxable year entered in column 1 that is being
used to offset West Virginia taxable income for the current taxable year.
Column 7 – Remaining unused net operating loss. Enter the amount of loss for the tax year entered in column 1 that
remains to be carried to a taxable year subsequent to the current taxable year.
TOTAL NET OPERATING LOSS CARRYFORWARD DEDUCTION FOR CURRENT TAXABLE YEAR.
The amount of the West Virginia net operating loss carryforward deduction claimed on Form CIT-120, Schedule 1, Schedule
2 or Schedule UB-CR of the current year’s tax return must equal the sum of Form CIT-120, Schedule NOL, column 6. The
West Virginia net operating loss carryforward deduction cannot reduce West Virginia taxable income below zero.
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CIT-120 APT – ALLOCATION AND APPORTIONMENT FOR MULTISTATE CORPORATIONS
SCHEDULES A1 & A2 – ALLOCATION OF NONBUSINESS INCOME
If the corporation’s business activities take place both within and without West Virginia and the corporation is also taxable in
another state, certain items of nonbusiness income that are included in federal taxable income are directly allocated. All other
income must be apportioned.
Business income arises from transactions and activities in the regular course of the corporation’s trade or business and includes
income from tangible and intangible property if the acquisition, management or disposition of the property constitutes integral
parts of the corporation’s trade or business.
Nonbusiness income includes all income that is not properly classified as business income less all expenses attributable to the
production of this income. Nonbusiness income is allocated to West Virginia if (1) the corporation’s commercial domicile, the
principal place from which the trade or business is managed is located in West Virginia; or (2) property creating the nonbusiness
income is utilized in West Virginia. Nonbusiness income from real property is allocated to West Virginia if the corporation’s
commercial domicile is located in West Virginia, or, in the case of patents or copyrights, if they are used in West Virginia.
For additional information regarding the nonbusiness income, you may request a copy of Publication TSD-392, “Corporation Net
Income Tax Nonbusiness Income”, by contacting our Taxpayer Services Division or online at tax.wv.gov.
Determine nonbusiness income allocated to West Virginia and outside West Virginia by completing Form CIT-120APT, Schedules
A1 and A2. Only those types of nonbusiness income listed on Form CIT-120APT, Schedules A1 and A2 can be allocated. Any other
types of income that the corporation classifies as nonbusiness must be apportioned.
Line 9 – Enter the amount from Form CIT-120APT, Schedule A1, column 3, line 9 on Form CIT-120, Schedule 2, line 5.
Line 13 – Enter the amount from Form CIT-120APT, Schedule A2, column 3, line 13 to Form CIT-120, Schedule 2, line 9.
SCHEDULE B – APPORTIONMENT FORMULA
If the corporation’s business activities take place both within and without West Virginia and the corporation is also taxable in
another state, all net income, after deducting those items of nonbusiness income allocated on Form CIT-120APT, Schedules A1
and A2 must be apportioned to West Virginia by using the appropriate apportionment formula. Completion of CIT-120APT,
Schedule B is required even if apportionment is zero.
Special apportionment formulas apply to motor carriers and to financial organizations. If you are filing for a financial
organization, follow the apportionment instructions for Form CIT-120APT, Schedule B, Part 3. If you are filing for a motor carrier,
follow the apportionment instructions for Form CIT-120APT Schedule B, Part 2.
All other multistate corporations will use the standard apportionment formula of payroll, property, and sales, with the sales
factor double weighted, and will complete CIT-120APT, Schedule B Parts 1 through 3 as applicable.
MULTISTATE CORPORATIONS – FOUR FACTOR FORMULA
PART 1
To determine your West Virginia apportionment percentage, first determine the following factors:
SALES FACTOR.
The term “sales” means all gross receipts of the taxpayer that are business income. The sales factor includes all gross
receipts derived from transactions and activity in the regular course of your trade or business, less returns and allowances.
Do not include interest or dividends from obligations of the United States government, which are exempt from taxation
in West Virginia, or gross receipts from an activity that produced nonbusiness income.
The denominator (column 2) of the sales factor includes all gross receipts derived from transactions and
activity in the regular course of your trade or business that was reflected in your gross income reported and as
appearing on your federal income tax return unless otherwise excluded. Sales of tangible personal property
delivered or shipped to a purchaser within a state in which the corporation is not taxed (e.g. under Public Law
86-272) are to be excluded from the denominator.
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The numerator (column 1) of the sales factor includes all gross receipts attributable to West Virginia and
derived from transactions and activity in the regular course of your trade or business. All interest income,
service charges or time-price differential charges incidental to such gross receipts must be included regardless
of the place where the accounting records are maintained or the location of the contract or other evidence of
indebtedness.
Divide column 1 by column 2 and enter the result in column 3. State the result as a decimal fraction and round to six (6)
places after the decimal. Enter the six (6) digit decimal fraction from column 3 on CIT-120, Schedule 2, line 7.
MOTOR CARRIERS – SPECIAL SINGLE FACTOR FORMULA
PART 2 – VEHICLE MILES.
Motor carriers of property or passengers are subject to special apportionment rules. Motor carriers must apportion their
business income by using a single factor formula of vehicle miles.
A motor carrier is any person engaged in the transportation of passengers and/or property for compensation by a motor
propelled vehicle over roads in West Virginia, whether on a scheduled route or otherwise. The term “vehicle miles” means
the operations of a motor carrier over one mile.
The special apportionment formula for motor carriers does NOT apply if:
a. The motor carrier neither owns nor rents any real or tangible personal property located in West Virginia, has made
no pickups or deliveries within West Virginia, and has traveled less than 50,000 miles in West Virginia during the
taxable year; or
b. The motor carrier neither owns nor rents any tangible personal property located in West Virginia except vehicles
and makes no more than 12 trips into or through West Virginia during the taxable year.
Under either (A) or (B), the mileage traveled in West Virginia may not be more than five percent (.05) of the total vehicle
miles traveled in all states during the taxable year.
Determine the apportionment factor by entering the appropriate vehicle miles for West Virginia in column 1, and vehicle
miles everywhere in column 2.
Divide column 1 by column 2 and enter the result in column 3. State the result as a decimal fraction and round to six (6)
places after the decimal. Enter the six (6) digit decimal fraction from column 3 on CIT-120, Schedule 2, line 7.
FINANCIAL ORGANIZATIONS – SPECIAL SINGLE FACTOR FORMULA
PART 3 – GROSS RECEIPTS.
Financial organizations subject to apportionment must apportion their business income by using a single factor gross
receipts formula.
A financial organization is any holding company or regulated financial corporation or subsidiary thereof, or any corporation
deriving more than fifty percent (.5) of its gross receipts from one or more of the following:
1. Making, acquiring, selling, or servicing loans or extensions of credit.
2. Leasing or acting as an agent, broker, or advisor in connection with leasing real and personal property that is the economic
equivalent of an extension of credit.
3. Operating a credit card business.
4. Rendering estate or trust services.
5. Receiving, maintaining, or otherwise handling deposits.
6. Engaging in any other activity with an economic effect comparable to any of the above.
Financial organizations regularly engaging in business in West Virginia shall apportion their business income by means of
a single factor of gross receipts apportionment formula. A financial organization not having its commercial domicile in
West Virginia is presumed to be regularly engaging in business in West Virginia if during any year it obtains or solicits
business with 20 or more persons within West Virginia, or the sum of its gross receipts attributable to sources in West
Virginia equals or exceeds $100,000.00.
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Gross receipts from the following ownership interest (and certain related activities) will not be considered in determining
whether a financial organization is subject to taxation.
1. An interest in a real estate mortgage investment conduit, a real estate investment, or a regulated investment company;
2. An interest in a loan backed security representing ownership or participation in a pool of promissory notes or certificates or
interest that provide for payments in relation to payments or reasonable projections of payments on the notes or certificates;
3. An interest in a loan or other asset from which the interest is attributed to a consumer loan, a commercial loan or a secured
commercial loan, and in which the payment obligations were solicited and entered into by a person that is independent and
not acting on behalf of the owner; or an interest in the right to service or collect income from such a loan or asset; or
4. An amount held in an escrow or trust account with respect to property described above.
However, if a financial organization is subject to taxation when gross receipts from these interests are not considered,
such receipts must then be included when determining the amount of taxes owed.
Neither the numerator nor the denominator of the gross receipts factor should include gross receipts from obligations
and certain loans on which you claim the special allowance on Form CIT-120, Schedule B-1.
Divide column 1 by column 2 and enter in column 3. State the result as a decimal fraction and round to six places after the
decimal. Enter the six (6) digit decimal fraction from column 3 on Form CIT-120, Schedule 2, line 7.
PETITIONING FOR AN ALTERNATIVE METHOD OF APPORTIONMENT
To use an alternate method of allocation and apportionment ro determine your taxable net income, you must petition
the Tax Commissioner. Your petition for an alternate method must be filed no later than the normal due date of your
return. You must have written permission to use an alternate apportionment method before filing your return. Permission
will only be granted if you can show that the statutory formula does not properly reflect your taxable income, and if the
alternate method properly and fairly shows your West Virginia taxable income.
Your petition should include your name and address, state of incorporation and principal place of business, a description
of the kind(s) of business in which you are engaged, a detailed statement of how sales are made in West Virginia, a
computation of your West Virginia taxable income using the statutory apportionment formula and using your proposed
alternate formula, and a summary of the facts that support your position.
Send your petition to the West Virginia Tax Division, Tax Account Administration Division, Corporate Tax Unit, PO Box
1202, Charleston, WV 25324-1202.
CIT-120U
Use this form to determine if any penalty for underpayment of estimated West Virginia Corporation Net Income Tax is
due.
Who must pay the penalty? A corporation is required to file a declaration of estimated corporation net income tax and
make estimated tax payments on Form WV/CIT-120ES if its West Virginia taxable income can reasonably be expected to
exceed $10,000.00, which equals a tax liability after tax credits of more than $650.00 (Code §11-24-16). Estimated tax is
a corporation’s expected income tax liability minus its tax credits. A taxpayer is required to remit, in equal installments on
the 15th day of the 4th, 6th, 9th, and 12th months of their taxable year, at least ninety percent (.90) of the tax due for the
filing period.
If a corporation did not pay enough estimated tax by the due dates, it will be assessed the penalty. The penalty is figured
separately for each installment due date. The corporation may owe the penalty for an earlier installment due date, even
if it paid enough tax later to make up the underpayment. The underpayment of estimated tax penalty rate will be 9.25%
in 2022.
PART 1: ALL FILERS MUST COMPLETE THIS PART
Line 1 – Enter your Corporation Net Income Tax after credits (Form CIT-120, line 9). If this amount is less than $650.00,
skip lines 2 and 3 and enter 0 on line 5.
Line 2 – Multiply the amount on line 1 by ninety percent (.9) and enter the result here. This is the amount the corporation
should have paid in estimated tax for this taxable year.
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Line 3 – Enter the Corporation Net Income Tax after credits from your 2019 return. If the corporation did not file a 2019
return leave this line blank.
Line 4 – Enter the smaller of line 2 or line 3. If line 3 is blank enter the amount from line 2. This is the amount the
corporation should have paid in estimated tax for this taxable year.
Line 5 – Enter the amount from line 4. This is the amount of estimated Corporation Net Income Tax that should have
been paid.
DETERMINE THE PENALTY BY COMPLETING PART II, III, AND IV
Part II: Annualized Installment Worksheet
If the taxable income varied during the year, the corporation may be able to lower or eliminate the amount of one or more
required installments by using the annualized installment worksheet. To use the annualized installment method to figure
the penalty, complete Part I, Part II, Part III, and Part IV of Form CIT-120U. Follow the line by line instructions entered on
Form CIT-120U.
PART III: CALCULATE THE UNDERPAYMENT
Line 23 – In column A, enter the estimated tax payments deposited by the 15th day of the 4th month of your tax year.
In column B, enter payments made after the 15th day of the 4th month through the 15th day of the 6th month
of your tax year.
In column C, enter payments made after the 15th day of the 6th month through the 15th day of the 9th month
of your tax year.
In column D, enter payments made after the 15th day of the 9th month through the 15th day of the 12th month
of the tax year.
Line 29 – If any of the columns in line 29 shows an underpayment, complete Part IV to figure the penalty for that period.
PART IV: CALCULATE THE PENALTY
Complete lines 31 through 42 to determine the amount of the penalty. The penalty is figured for the period of
underpayment determined under West Virginia Code §11-10-18a using the rate of interest determined under West
Virginia Code §11- 10-17 or 17a, whichever is appropriate for the taxable year. For underpayments involving periods after
January 1, 2023, see the instructions for lines 39 and 40.
Line 31 – Enter the date on which the installment payment was made or the original due date of the annual return,
whichever is earlier. The due date of the return is the 15th day of the 4th month following the close of the
taxable year for corporations. The due date of the annual return of an exempt organization with unrelated
business taxable income is the 15th day of the 5th month following the close of the taxable year. The payment
of estimated tax is applied against underpayments of required installments in the order that installments are
required to be paid, regardless of which installment the payment pertains to.
For example, a corporation has an underpayment for the April 15th installment of $1,000. The June 15th installment
requires a payment of $2,500. On June 10th, the corporation deposited $2,500 to cover the June 15th installment. $1,000
of this payment is considered to be for the April 15th installment. The penalty for April 15th installment is figured to June
10th (56 days). The payment to be applied to the June 15th installment will then be $1,500.
If the corporation made more than one payment for a required installment, attach a separate computation for each
payment.
Lines 39 & 40 - For underpayments involving periods after January 1, 2023, use the interest rate established by the State
Tax Commissioner. You can contact the West Virginia Tax Division, Taxpayer Services Division, at 1-800-982-
8297 to get rate information. Administrative Notices adjusting interest rates may also be found online at
tax.wv.gov.
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Line 42 – If you have completed this form to determine the penalty for underpaying the corporation’s estimated
Corporation Net Income Tax, enter the amount on line 6 on Form CIT-120, line 22.
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COMBINED REPORTING
COMBINED CORPORATION NET INCOME REPORTING REQUIRED (§11-24-13A(J)).
For tax years beginning on or after January 1, 2009, any taxpayer engaged in a unitary business with one or more other
corporations shall file a combined report which includes the income, allocation, and apportionment of income of all corporations
that are members of the unitary business. Notwithstanding any provision to the contrary in this article, the income of an
insurance company, the allocation or apportionment related thereto, and the apportionment factors of an insurance company
shall not be included in a combined report filed under this article unless specifically required to be included by the Tax
Commissioner.
Net operating loss (NOL) carryovers earned during a year in which the taxpayer filed a consolidated tax return (§11-24-13c).
West Virginia computes net operating losses on a post-apportionment basis, including business and nonbusiness income
adjustments. NOLs can only be carried forward (or backwards) to be applied against West Virginia source income of the
combined group members to which it is attributable. NOL’s that were incurred by an entity in a period in which the entity filed
separately, cannot be used by other members of the combined group. There is an exception for NOL’s earned when the taxpayer
was filing on a consolidated basis. Those NOL’s can be carried over and applied against the income of any former member of
the consolidated (controlled) group. (see NOL Calculation instructions on page 14)
WATER’S-EDGE REPORTING.
Water’s-Edge Reporting is mandated absent an affirmative election to report based upon a worldwide unitary combined report.
Members of the Water’s-Edge Reporting group include:
1. Any unitary member incorporated in the United States or formed under the laws of any state, the District of Columbia
or any territory or possession of the United States;
2. Any unitary member whose average property, payroll and sales factors within the United States is twenty percent or more;
3. Any unitary member which is a domestic international sales corporation, a foreign sales corporation, or an export trade
corporation as defined by federal law;
4. Any unitary member with effectively connected income with the conduct of a trade or business within the United States
to the extent of that effectively connected income;
5. Any unitary member that is a “controlled foreign corporation”, to the extent of the members’ Subpart F income, unless
that income is subject to an effective rate of tax that is greater than ninety percent of the maximum federal rate;
6. Any unitary member that earns more than twenty percent of its income from intangible property or service-related
activities that are deductible against the business income of other members of the Water’s-Edge group; and
7. Any unitary member doing business in a tax haven.
Worldwide Unitary Combined Reporting: A corporation may choose to file Worldwide Unitary Combined Reporting. To do so,
please fill out and sign West Virginia Form CIT-120 OPT and attach to your return. This election is binding for 10 years unless a
written request to withdraw for reasonable cause has been sent to the commissioner and granted.
GENERAL INFORMATION
What is the purpose of the UB Schedules? The purpose of the UB Schedules is to enable a unitary business group to determine
the amount of its unitary business income that is attributable to West Virginia. A unitary business group’s business income
includes all income that may be apportioned by formula among the states in which the group is doing business without violating
the Constitution of the United States.
What is a unitary business group? The term “unitary business group” means a group of persons related through common
ownership whose business activities are integrated with, dependent upon, and contribute to each other. In the case of a
corporation, common ownership is defined as the direct or indirect ownership or control of more than fifty percent (.5) of the
outstanding voting stock. For further instructions see WV Code 11-24-13f (a) waters-edge reporting-subdivision (1) through (7).
What are the filing requirements? Corporations that are members of the same unitary business group must file a combined
report including all required information of every business engaging in the unitary business with the corporation. This report
must be filed with each member’s separate return unless the group elects to designate a corporation as surety and file a
combined return.
SPECIFIC INSTRUCTIONS
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SCHEDULE UB – LIST OF MEMBERS IN A UNITARY COMBINED GROUP.
List all members of the unitary business group including group number (1-3), name, FEIN, month and year ending, total tax from
UB-CR, total payments, and prior year credits. Make copies of the blank Schedule UB as needed. The following list defines the
group numbers:
Group 1 – Regular entities
Group 2 – Motor carriers
Group 3 – Financial organizations
SCHEDULE UB-CR. COMBINED REPORT.
The purpose of the Schedule UB-CR Combined Report is to provide a method of reporting the separate business income of
multiple companies within a unitary group onto one statement. The business income is reported and apportioned for each
company as if it were filed separately. The income for all companies is then combined, after eliminations, to allow the business
income of the unitary group to be filed on one CIT-120 return.
The UB-CR MUST be used when filing a combined report and/or combined return. Taxpayers who file combined returns must
file their West Virginia CIT-120 return electronically. The UB-CR must be supported within the electronic filing software in order
to file a combined return.
For most filers, the unitary business structure will be in one of the following groups: Regular Entities, Motor Carriers, or Financial
Organizations. Therefore, the Combined row of the appropriate WV Net Income Tax group from Schedule UB-CR will be what is
transferred to the CIT-120, page 2, line 9. In the event of multiple groups, add the Taxable Income from each group together
and enter on CIT-120, page 2, line 9.
Group 1 - Regular Entities
Group 2 – Motor Carriers
Group 3 – Financial Organizations
Note: The spreadsheet for each Group type is the same except for the way the WV apportionment is calculated.
Enter Name of each entity on the appropriate Group tab
Enter the FEIN of each entity on the appropriate Group tab
Column 1 – Enter the Federal taxable income for each entity in the appropriate group
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PART 1 – INCREASING ADJUSTMENTS TO FEDERAL INCOME
Column 2a Enter the interest or dividends on obligations or securities from any state or political subdivision not exempt from
state tax.
Column 2b Enter US obligation interest/dividends not exempt from state tax
Column 2c Enter income/other taxes based upon net income, imposed by this state or any other jurisdiction, deducted on
your federal return
Column 2d Enter federal depreciation/amortization for wholly WV corporation water/air pollution facilities
Column 2e Enter unrelated business taxable income of a corporation exempt from federal tax (IRC Sec 512)
Column 2f Enter federal net operating loss
Column 2g Enter contributions to NIPA
Column 2h Enter net operating losses from sources outside the US
Column 2i Enter foreign taxes deducted on your federal return
Column 2j Enter add back for expenses related to certain REIT’s and Regulated Investment Companies and certain interest
and intangible expenses (WV Code §11-24-4b)
Column 2k Enter other increasing adjustments (you must include a statement of explanation with your return)
Column 3 Sum of the increasing adjustments
PART 2 – DECREASING ADJUSTMENTS TO FEDERAL INCOME
Column 4a Enter refund/credit on taxes based upon net income included in federal taxable income
Column 4b Enter interest expense on obligations/securities of any state or political subdivision disallowed in determining
federal taxable income
Column 4c Enter salary expense not allow on federal return due to claiming Work Opportunity Credit
Column 4d Enter foreign dividend gross-up (IRC Sec 78)
Column 4e Enter Subpart F income (IRC Sec 951)
Column 4f Enter taxable income from sources outside the US
Column 4g Enter cost of wholly WV water/air pollution control facilities
Column 4h Enter federal taxable income employer contributions to medical savings accounts withdrawn for nonmedical purposes
Column 4i Qualified Opportunity Zone business income
Column 4j Enter allowance for obligations/investments
Column 4k Enter other decreasing adjustments (you must include a state of explanation with your return)
Column 5 Sum of the decreasing adjustments
PART 3 – TAXABLE INCOME CALCULATION
Column 6 Adjusted taxable income of each entity
Column 7 Total nonbusiness income from everywhere of each entity
Column 8 Total non-unitary business income everywhere of each entity
Column 9 Income subject to apportionment per entity
Column 10 Group income subject to apportionment
Column 11 WV apportionment factor per entity
Column 12 WV apportioned income
Column 13 Enter nonbusiness income allocated to WV
Column 14 Enter total non-unitary business income apportioned to WV
Column 15 WV Taxable Income
APPORTIONMENT FACTOR CALCULATIONS
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GROUP 1 - REGULAR ENTITIES:
WV Sales Enter the amount of WV sales for each entity
Everywhere Adjusted Sales – Enter the amount of the Adjusted Sales by each entity in all locations (WV plus all others). This is
the difference between sales everywhere less sales to purchasers in a state where you are not subject to tax. This
amount will be summed in the “Everywhere all entities” row. That sum will be used as the denominator in the
apportionment factor calculation.
GROUP 2 – MOTOR CARRIERS
WV Vehicle Mileage – Enter the WV vehicle mileage for each entity
Everywhere Vehicle Mileage – Enter the amount of vehicle mileage in all locations (WV and all others). This amount will be
summed in the “Combined entities” row. That sum is the amount that will be used in the apportionment factor
calculation.
GROUP 3 – FINANCIAL ORGANIZATIONS
WV Gross Receipts – Enter the WV gross receipts for each entity
Every Gross Receipts – Enter the amount of gross receipts in all locations (WV and all others). This amount will be summed in
the “Combined entities” row. That sum is the amount that will be used in the apportionment factor calculation.
PART 4 – WV NOL SECTION
NOL1 NOL generated as the result of filing a consolidated return prior to 2009
NOL 2 NOL carryforward generated by the entity from an individual return or a combined report from 2009 to 2017
NOL 3 NOL carryforward generated by the entity from an individual return or a combined report after 2017
NOL 4 Total WV NOL available for use in the tax period per entity
NOL 5 NOL generated by entity in this period
NOL 6 NOL available for use in future periods by entity
Column 16 (NOL 7) WV Net Operating Loss used this tax period per entity
Column 17 Subtotal (See NOL pg 8)
Column 18 REIT inclusion and other WV taxable income
Column 19 WV net taxable income per entity
Column 20 Tax rate in 2022 tax period (.065)
Column 21 WV income tax before credits per entity
PART 5 – CREDITS SECTION
C1. a Economic Opportunity Tax Credit (§11-13Q) Schedule WV/EOTC-1
C1. b High Technology Manufacturing Business (§11-13Q-10a) Schedule EOTC-HTM
C1. c Manufacturing Investment Tax Credit (§11-13S) Schedule WV/MITC-1
C1. d Historic Rehabilitated Buildings Investment Credit (§11-24-23a) Schedule RBIC
C1. e West Virginia Neighborhood Investment Program Credit (§11-13J) Form WV/NIPA-2
C1. f Environmental Agricultural Equipment Tax Credit (§11-13k) Form WV/AG-1
C1. g Electric, Gas, and Water Utilities Rate Reduction Credit (§11-24-11) Schedule L
C1. h West Virginia Military Incentive Credit (§11-24-12) Schedule J
C1. i Apprentice Training Tax Credit (§11-13w) Schedule WV/ATTC-1
C1. j Manufacturing Property Tax Adjustment Credit (§11-13Y) Schedule WV/MPTAC-1
C1. k Alternative Fuel Tax Credit (§11-6d) Schedule AFTC-1
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C1. l Innovative Mine Safety Technology Tax Credit (§11-13BB) Schedule IMSTTC-1
C1.m Farm to Food Bank Tax Credit (§11-13DD)
C1.n Post Coal Mine Site Business Credit (§11-28) Schedule PCM-1
C1.0 Downstream Natural Gas Manufacturing Investment Tax Credit (§11-13GG) Schedule DNG-1
C1.p Natural Gas Liquids (§11-13HH) Schedule NGL-1
C1.q Donation or Sale of Vehicle to charitable Organizations (§11-13FF) Schedule DSV-1
C1.r Small Arms And Ammunition Manufacturers Credit (§11-13KK) Schedule SAAM-1
C1.s Capital Investment in Child-Care Property Tax Credit (§11-21-97) Schedule CICCP-1
C1.t Operating Costs of Child Care Property Tax Credit (§11-21-97) Schedule CICCP-2
C2. Total credits claimed
C3. Total credits available for use by each entity this period
PART 5 – WV NET INCOME
C4 WV Net Income Tax per entity (enter the sum of the Combined Total row of this column for Regular Entities,
plus the Combined Total row of this column for Motor Carriers plus the sum of the Combined Total row of this
column for Financial Organizations on the CIT-120, page 2, line 9).
MULTISTATE CORPORATIONS – FOUR FACTOR FORMULA
Part 1 To determine the corporation’s West Virginia apportionment percentage, first determine the following factors
for each member of the unitary groups:
SALES FACTOR.
The term “sales” means all gross receipts of the taxpayer that are business income. The sales factor includes all gross
receipts derived from transactions and activity in the regular course of your trade or business, less returns and allowances.
Do not include interest or dividends from obligations of the United States government, which are exempt from taxation
in West Virginia, or gross receipts from an activity that produced nonbusiness income.
The denominator (column 2) of the sales factor includes all gross receipts derived from transactions and activity in the
regular course of your trade or business that was reflected in your gross income reported and as appearing on
your federal income tax return unless otherwise excluded. Sales of tangible personal property delivered or
shipped to a purchaser within a state in which the corporation is not taxed (e.g. under Public Law 86-272) are
to be excluded from the denominator.
The numerator (column 1) of the sales factor includes all gross receipts attributable to West Virginia and derived from
transactions and activity in the regular course of your trade or business. All interest income, service charges or
time-price differential charges incidental to such gross receipts must be included regardless of the place where
the accounting records are maintained or the location of the contract or other evidence of indebtedness.
Divide column 1 by column 2 and enter the result in column 3. State the result as a decimal fraction and round to six (6)
places after the decimal. Enter the six (6) digit decimal fraction from column 3 on CIT-120, Schedule 2, line 7.
MOTOR CARRIERS – SPECIAL SINGLE FACTOR FORMULA
PART 2 – VEHICLE MILES.
Motor carriers of property or passengers are subject to special apportionment rules. Motor carriers must apportion their
business income by using a single factor formula of vehicle miles.
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A motor carrier is any person engaged in the transportation of passengers and/or property for compensation by a motor
propelled vehicle over roads in West Virginia, whether on a scheduled route or otherwise. The term “vehicle miles” means
the operations of a motor carrier over one mile.
The special apportionment formula for motor carriers does NOT apply if:
A. The motor carrier neither owns nor rents any real or tangible personal property located in West Virginia, has made
no pickups or deliveries within West Virginia, and has traveled less than 50,000 miles in West Virginia during the
taxable year; or
B. The motor carrier neither owns nor rents any tangible personal property located in West Virginia except vehicles
and makes no more than 12 trips into or through West Virginia during the taxable year.
Under either (A) or (B), the mileage traveled in West Virginia may not be more than five percent (.05) of the total vehicle
miles traveled in all states during the taxable year.
Determine the apportionment factor by entering the appropriate vehicle miles for West Virginia in column 1, and vehicle
miles everywhere in column 2.
Divide column 1 by column 2 and enter the result in column 3. State the result as a decimal fraction and round to six (6)
places after the decimal. Enter the six (6) digit decimal fraction from column 3 on CIT-120, Schedule 2, line 7.
FINANCIAL ORGANIZATIONS – SPECIAL SINGLE FACTOR FORMULA
PART 3 – GROSS RECEIPTS.
Financial organizations subject to apportionment must apportion their business income by using a single factor gross
receipts formula.
A financial organization is any holding company or regulated financial corporation or subsidiary thereof, or any corporation
deriving more than fifty percent (.5) of its gross receipts from one or more of the following:
1. Making, acquiring, selling, or servicing loans or extensions of credit.
2. Leasing or acting as an agent, broker, or advisor in connection with leasing real and personal property that is the
economic equivalent of an extension of credit.
3. Operating a credit card business.
4. Rendering estate or trust services.
5. Receiving, maintaining, or otherwise handling deposits.
6. Engaging in any other activity with an economic effect comparable to any of the above.
Financial organizations regularly engaging in business in West Virginia shall apportion their business income by means of
a single factor of gross receipts apportionment formula. A financial organization not having its commercial domicile in
West Virginia is presumed to be regularly engaging in business in West Virginia if during any year it obtains or solicits
business with 20 or more persons within West Virginia, or the sum of its gross receipts attributable to sources in West
Virginia equals or exceeds $100,000.00.
Gross receipts from the following ownership interest (and certain related activities) will not be considered in determining
whether a financial organization is subject to taxation.
1. An interest in a real estate mortgage investment conduit, a real estate investment, or a regulated investment
company;
2. An interest in a loan backed security representing ownership or participation in a pool of promissory notes or
certificates or interest that provide for payments in relation to payments or reasonable projections of payments
on the notes or certificates;
3. An interest in a loan or other asset from which the interest is attributed to a consumer loan, a commercial loan or
a secured commercial loan, and in which the payment obligations were solicited and entered into by a person that
is independent and not acting on behalf of the owner; or an interest in the right to service or collect income from
such a loan or asset; or
4. An amount held in an escrow or trust account with respect to property described above.
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