Who must file
Generally, any person or entity that is engaged in a trade or business in the District of Columbia or who receives income from sources in the District is considered to be an "unincorporated business" and is required to file a D-30.
- an individual (whether a DC resident or resident of another state);
- a limited liability company;
- a partnership, limited partnership;
- a society or association; or
- an estate, a trust or executor, administrator, receiver, trustee, liquidator, conservator, committee assignee, or any other fiduciary or entity
Overview
Preparing Form D-30 may require the following schedules.
- Schedule A - (feeds D-30, Line 2) Costs of goods sold.
- Schedule B - (feeds D-30, Line 19) Contributions and/or gifts made to qualified organization in the tax year.
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Schedule C - (feeds D-30, Line 17) Calculates the following imposed tax on taxpayers
- Income and excess profit taxes;
- DC Franchise tax; or
- Taxes assessed against the property for local benefits of a kind tending to increase the value of the property assessed.
- Schedule E - (feeds D-30, Line 18) Enter interest paid or accrued on a business debt.
- Schedule F - (feeds D-30, Line 28) DC apportionment factor. Schedule F must be completed even if the operation is 100% in the District of Columbia. If combined report use Schedule 2A, Line 9 instead.
- Schedule G - (feeds D-30, Line 23) Other allowable deductions. Enter royalty, interest or other tangible payments from a related entity that has not deducted the payment amounts that are being taxed by the District of Columbia.
- Schedule H - Income not reported (claimed as nontaxable) List all income of the unincorporated business that is considered not subject to DC unincorporated franchise tax. State why the income should be considered non taxable.
- Schedule I - Balance Sheets. Submit balance sheets for the start and end of the tax year. Conform them to the unincorporated business' books and record and the federal return. Attach an explanation of any variation.
- Schedule J - Distribution and reconciliation of net income (or loss) Enter the TIN of each of the owners.
- Schedule K - Use this schedule to report the name and TIN for any single member limited liability company that is treated as a disregarded entity for District franchise tax purposes whose income is included in the income reported on the return and is doing business in the District.
Creating the D-30 Return
To start Form D-30 SUB Unincorporated Business Franchise Tax Return, from the Main Menu of the DC Individual return select:
- Miscellaneous Forms
- D-30 - Unincorporated Business Franchise Return
Heading Information
Company Information - Complete this section with the company's FEIN if applicable, name address, email address, and signing officer.
Located in DC Ballpark TIF Area - If an Annual Ballpark fee return was filed select Yes
Amended - D-30 does not have a separate amended form. If amending a previously filed D-30, change this line from No to Yes.
Certified qualified high-tech company - Change this line from No to Yes if certified as a high-tech company.
Gross income $12,000 or less - An unincorporated business having a gross income of $12,000 or less is not subject to the unincorporated business franchise tax, including minimum tax, and does not have to file a D-30 Unincorporated Business Franchise Tax return.
First Return - If this is the first return being filed, change this line from No to Yes
Final Return - If not required to continue filing a return due to the ending of business operations change this line from No to Yes.
Address different from last return - If the address has changed from the previously filed return change this line from No to Yes.
Authorize discussion with third party - Select Yes or No
NAICS Code - Enter the NAICS business activity code
Principal Business Activity - Description of business activity
Type of Ownership - Sole Proprietor, Partnership, etc.
Date Business began in DC - Enter the date business began in the District
Payment from account outside the U.S.? - Select Yes or No
Additional Information - Answer all supplemental questions in this section
Total Gross Income
- Gross receipts - Total gross receipts from sales and operations minus returns and allowances
- Cost of goods sold and/or operations - This amount feeds from Schedule A.
- Dividends minus Subpart F income - Enter the total of all taxable dividends. You may deduct Subpart F Income, attach a detailed statement showing the calculation of the taxable amount.
- Interest - Enter interest the business received or is credited with during the tax year. Do not include interest on come on obligations or securities issued by the United states or its instrumentalities already included in the federal gross income.
- Gross rental income - Enter the gross income received from the rental of real or personal property.
- Net Royalties - Enter royalty income from federal from 1040, Schedule E.
- Net capital gain - Capital gains or losses are treated in the same manner as they are for federal corporation income tax purposes. (See detailed instructions on Federal Schedule D, Form 1120)
- Ordinary gain/loss from Federal 4797 - Enter the total ordinary gain or loss from Federal Form 4797, Sales of Business Property.
- Capital gains deferred on federal return - If you have capital gains deferred on your federal return due to investment in a federal qualified opportunity investment fund enter the amount of the deferment here.
- Other income - Enter the total income (loss) not reported elsewhere on the return; attach a detailed statement.
Total Deductions
Deductions are allowed if they are ordinary and necessary and directly related to business income. Do not enter negative values and do nota take deductions on this return for interest, taxes, contributions and other itemized deductions normally deductible on an individual return filed by the owners or members.
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Salaries and wages - Enter all salaries and wages not deducted elsewhere on the return.
- Do not include compensation of the owners/members.
- Do not include wages incurred in computing Economic Development Zone Incentive credit, QHTC wage credits or Bone Marrow credit.
- Repairs - Enter the cost of incidental repairs. See instructions for details.
- Bad debts - Report bad debts in the same manner you report them for federal tax purposes.
- Royalty payments - Royalty payments to related entities are not an allowable deduction. If you are the recipient of a related entity's royalty payment and you are filing a return and paying taxes on these payments in the District see the instructions for Schedule G to determine whether you can deduct any of the payment amount.
- Rent - Enter the amount of rent paid or accrued for business property in which the unincorporated business has no equity.
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Taxes - Enter taxes imposed as reported in Schedule C, Form D-30. Do not deduct these taxes;
- Income and excess profit taxes;
- DC Franchise tax; or
- Taxes assessed against the property for local benefits.
- Interest expenses - Enter interest paid or accrued on business debt. Apply any federal limitations. Interest payments to related entities are not an allowable deduction.
- Contributions or gifts - Enter from Schedule B, page 3, Form D-30 contributions and/or gifts made to a qualified organization in the tax year. Attach a detailed statement about the contributions and gifts.
- Amortization - Enter the amortization amount from federal From 4562.
- Depreciation - Enter the depreciation amount claimed on your federal Form 4562. Do not include amounts deducted elsewhere on the D-30.
- Capital gains deferred - If you have capital gains deferred due to investment in a DC approved Qualified Opportunity Fund enter the amount deferred.
- Other allowable deductions - Enter other income/deduction attributable to District of Columbia
- NOL Deduction - Enter the amount of any DC apportioned net operating loss carry forward for years 2000 or later.
Total Taxable Income
DC Apportionment - All unincorporated business engaging in a trade or business both in and outside DC must use the single sales formula to apportion it's income. Unincorporated business domiciled in DC and not subject to tax elsewhere must report 100 percent of their net business income an allocate 100 percent of their non business income to DC. This is calculated on the Schedule F and feeds to D-30 Line 28.
Nonrefundable Credits
Schedule UB, Business Credits - Use this Schedule to claim the following credits;
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Economic Development Zone Incentives Credit - Supporting documentation required
- a copy of the DC Council resolution approving qualification for any credit
- a certification of eligible employees issued by the DC Department of Employment Services
- a completed EDZI credit worksheet.
- Organ and Bon Marrow Doner Credit - Provides a credit to an employer who allows up to 30 days paid sick leave to an employee who donates an organ and up to 7 days paid leave for donating bone marrow.
- Job Growth Incentive Credit - The credit must be approved by the Mayor in advance of starting the project. The approval will provide the allowable amount of the credit.
- Alternative Fuel Infrastructure Installation Credit - This is a credit in the amount of up to 50% (not to exceed $10,000) of the equipment and labor costs attributable to the purchase and installation on qualified fuel vehicle refueling property or per vehicle- charging station.
- Alternative Fuel Conservation Credit - This is a credit in the amount of up to 50% of the equipment and labor costs attributable to the cost of converting a motor vehicle licensed in the District that operates on petroleum diesel or petroleum derived gasoline to a motor vehicle that operates on alternative fuel.
- Small Retailer Property Tax Relief Credit - A business that has less than $2.5 million in federal gross receipts or sales, may claim a credit against corporate or unincorporated business franchise tax equal to the total class 2 real property taxes paid but not to exceed $5,000.
- DC Low-Income Housing Tax Credit - A credit equal to 1/2 of the amount of the homeownership assistance provided by the employer to its eligible employee during the taxable year. The credit shall not exceed $2,500 for any one eligible employee.
Additional Information
Disclaimer
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