This Tax Alert amends the line 4e instructions provided on the back of the 2004 Form 1065/1120S ME by correcting a line reference error and providing additional guidance for S corporation filers.

Line 4e Line Reference Correction

The 2004 Form 1065/1120S ME, line 4e instructions direct S corporations to enter on this line the amount from federal Form 1120S, Schedule K, line 23. This line reference was correct for 2003 returns but is incorrect for 2004 returns. Federal Form 1120S was revised for 2004. The information that was previously entered on Schedule K, line 23 is now entered on Schedule K, line 17e. For 2004, S corporations should enter on Form 1065/1120S ME, line 4e the amount from federal Form 1120S, Schedule K, line 17e.

Line 4e Additional Guidance for S Corporation Filers

Not all S corporation filers are required to complete federal Form 1120S, Schedule K, line 17e. However, all S corporation filers must enter an amount on Form 1065/1120S ME, line 4e. If you are not required to complete Schedule K, line 17e on your federal return, you must calculate pro forma the amount that would be entered on that line in accordance with the federal instructions and enter that amount on Form 1065/1120S ME, line 4e.

Further Information and Forms

Further information and 2004 Forms 1065/1120S ME with amended instructions may be obtained by calling Maine Revenue Services at 626-8475. You may also download 2004 Forms 1065/1120S ME with amended instructions from the MRS web site, www.maine.gov/revenue.