SCHEDULE CO-420 Instructions

       Foreign Dividend Factor Increments (for Unitary Filers Only)
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                                 General Information
Prepare Schedule CO-420 for each entity paying dividends.
Vermont provides factor relief for the dividends received from overseas business organizations as defined in 
       Reg. § 1.5862(d) – 8(b). In order to obtain factor relief, a separate apportionment percentage for 
       foreign dividends must be calculated. Relief is achieved by increasing the denominators (everywhere 
       amounts) in the apportionment factors, which dilutes the apportionment percentage applied to 
       taxable foreign dividends.
Use Schedule CO-420 to determine the incremental amount (increment) added to the denominator (everywhere 
       factor) for Sales and Receipts when calculating the apportionment percentage to be applied to 
       foreign dividends. (For tax years starting January 1, 2023, and later, Vermont has changed from 
       three factor apportionment to a single sales factor.)

Prepare Schedule CO-420 for each entity paying dividends. The increment (that is, the amount by which the      INSTR  (Place at FIRST page)
       “Everywhere” factor will be increased) will be determined using Schedule(s) CO-420, and then            Instr. pages 
       carried forward to Schedule CO-419, Apportionment of Foreign Dividends (for Unitary only), for 
       calculation of the modified apportionment factors, modified apportionment percentage, and then 
       the amount of foreign dividends apportioned to Vermont. 

If more than one entity is paying dividends, the increment to carry forward to Schedule CO-419 will be the sum 1 - 2
       of the increments calculated for all dividend payors. Specifically, carry forward the sum of all:
                  Schedule CO-420 to              Schedule CO-419
                 Lines 10 and 20 . . . . . . . . . . . . . . . . Line 2A

                        WHO QUALIFIES FOR FACTOR RELIEF?
       Unitary foreign dividend payors whose dividends qualify for factor relief include:
                •  Foreign corporations as defined by the Internal Revenue Code, including but not limited to: 
                Controlled foreign corporations (CFC), I.R.C. § 936 Sales Companies, and
                •  Foreign sales corporation (FSC)
                •  Business organizations that made deemed dividends to a member of the unitary group.

                        Line-by-Line Instructions
                 Please print clearly in BLUE or BLACK ink only.
Enter the name and Federal Employer Identification Number (FEIN) of the Principal Vermont Corporation.
Enter the name(s) and FEIN(s) of the entity paying dividends to a member of the unitary group, for whom this 
       Schedule CO-420 is being prepared.
Line 1 Enter the amount of dividend paid or deemed paid net of any deductions (such as I.R.C. § 250 or 
       I.R.C. § 965(c)).
Line 2 Enter the payor entity’s taxable income, computed using U.S. tax standards.
                                                                        Schedule CO-420 Instructions
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tax.vermont.gov                                                                          Rev. 10/23

Line 3     Determine the percentage of taxable income paid as dividend. Divide Line 1 by Line 2. Calculate 
           as a percentage, showing six digits to the right of the decimal. If the result is greater than 
           100.000000%, enter as 100.000000%. If less than zero, enter -0-. If taxable income is zero or less, 
           enter 100.000000%.
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Lines 4 – 8
           Report the amounts for the dividend payor in accordance with U.S. Tax law and Vermont rules and 
           regulation for apportionment. Refer to the instructions for Schedule BA-402, Apportionment and 
           Allocation Schedule, and Regulation § 1.5833, Allocation of Income.
Line 9     Add Lines 4 through 8.
Line 10    Multiply Line 9 by Line 3. Enter the result. This is the sales and receipts increment factor for this 
           dividend payor.
Lines 11 through 20
           Follow instructions for Lines 1 through 10, respectively.
Report to Schedule(s) CO-419
           If there is only one payor of dividends (and therefore only one Schedule CO-420), carry the amount 
           from Schedule CO-420, Line 10, to Schedule CO-419, Line 2A.                                           INSTR  (Place at LAST page)
                                                                                                                 Instr. pages 
           If multiple entities are paying dividends, the increments to carry forward to Schedule CO-419 (same 
           lines as detailed above) will be the sum of the increments calculated for all dividend payors, that 
           is the sum of the amounts on Lines 10 and 20, across all attached Schedules CO-420.

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                                                                              Schedule CO-420 Instructions
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tax.vermont.gov                                                                               Rev. 10/23