What is Form 851?
Form 851, the Affiliations Schedule, is an essential document for corporations to disclose their relationships with other companies. It identifies the primary parent corporation and outlines all its connected subsidiaries. This form plays a vital role in ensuring that each subsidiary is included in the same group and provides details on tax credits and payments for each corporation. The Internal Revenue Service (IRS) relies on this information to accurately assess and collect taxes from affiliated groups and verify that each subsidiary meets the ownership requirements needed to be part of the group.
What is Form 851 used for?
Form 851 is important for corporations that are part of a group. It helps clarify relationships and financial details among members. Here’s what it’s used for:
- Identify the Common Parent Corporation: Shows which corporation is the main one in the group.
- Report Overpayment Credits and Estimated Tax Payments: Lists any overpayment credits and tax payments for each corporation in the group.
- Determine Subsidiary Qualification: Confirms that all subsidiary corporations meet the criteria to be in the group.
How to fill out Form 851?
- 1
Identify the common parent corporation by listing its name and address.
- 2
Report overpayment credits, estimated tax payments, and tax deposits for each corporation.
- 3
List subsidiary corporations, including their name, address, and employer identification number.
- 4
Enter the principal business activity and PBA code for the common parent and each subsidiary.
- 5
Complete any additional sections as needed, like nondividend distributions and stock changes.
- 6
Verify that each subsidiary meets affiliation requirements.
- 7
Date the form to confirm accuracy under penalties of perjury.
Who is required to fill out Form 851?
The parent corporation of an affiliated group is responsible for completing Form 851. They must report essential details regarding overpayment credits, estimated tax payments, and tax deposits for each member of the group.
Once completed, the IRS uses Form 851 to verify compliance with tax laws and accurately assess tax liabilities for affiliated corporations, ensuring proper consolidation of income tax returns.
When is Form 851 not required?
You don't need to file Form 851 if your group filed a consolidated return for the previous taxable year. Also, if your group submitted Form 1122, Authorization and Consent of Subsidiary Corporation, for the current year, you can skip Form 851 altogether.
When is Form 851 due?
The deadline for Form 851 is the same as the consolidated tax return for the affiliated group. For corporations on a calendar year, this is usually the 15th day of the 4th month after the tax year ends. For those with fiscal years ending June 30, it is the 15th day of the 3rd month after the tax year ends.
How to get a blank Form 851?
Our platform provides a blank version pre-loaded in our editor, allowing you to fill it out directly. Remember, PDF Guru aids in filling and downloading forms but does not assist with filing them.
The Internal Revenue Service (IRS) issues this form.
Do you need to sign Form 851?
Form 851 does not require a signature. This form is completed by the parent corporation and is attached to the consolidated tax return. However, it's always a good practice to check for the latest updates regarding tax forms. With PDF Guru, you can fill out this form, download it for your records, and handle any additional steps required elsewhere.
Where to file Form 851?
To submit Form 851, attach it to the consolidated income tax return for your affiliated group. The return should be sent by mail or electronically to the appropriate IRS service center based on the location of the parent corporation.
Ensure you identify the common parent corporation and list each member of the group. Report any overpayment credits and estimated tax payments accurately.
