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Understanding allocation versus apportionment in Lacerte

by Lacerte Tax 2023 Updated 8 months ago

In the business modules, and sometimes in the individual module, states will determine the amount of income produced in the state based on an apportionment factor.

Throughout the Detail input, you'll see some items which will allow you to allocate dollar amounts to each state, while other inputs don't have this option.

Lacerte will have allocation fields available for states that support allocation. If you are unable to allocate to a specific state then the state should have an apportionment screen.

Apportionment involves three factors:

  • Sales - The sales factor is generally made up of gross receipts.
  • Property - The property factor is generally calculated from depreciable assets.
  • Payroll -  The payroll factor is generally made up of salaries and wages.

Many input items (such as passthrough K-1 income) are involved in the apportionment percentage.  Therefore, Lacerte won't enable the sourcing of these amounts.

Apportionment adjustments can be made in the state & local screens:

  • Individual - Screens will vary by state (Screens 50 - 51). Very few individual states calculate an apportionment formula.
  • Partnership - Screen 44
  • Corporate - Screen 52
  • S-Corporate - Screen 50
  • Exempt - Screen 73

The apportionment input options will vary by state. These input differences will directly correlate with each state's apportionment formula(s) described within the state's form instructions.

Lacerte Tax

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