Tax reporting group
A tax reporting group consists of process levels grouped together for federal tax reporting. If your company has more than one tax reporting ID, you can group all process levels that share the same ID into a tax reporting group.
Each tax reporting group has a head process level and at least one dependent process level. A head process level is the "parent" for a tax reporting group. All other process levels in the tax reporting group are attached to the head process level. A head process level must be independent and all other process levels in the group must be dependent. See Independent process level.
Example
Two Rivers Company consists of four process levels (one for each tax reporting ID) but they decide to expand two tax reporting IDs into multiple process levels. Therefore, Two Rivers group the process levels with the same tax reporting IDs into tax reporting groups for federal tax reporting.
Grove Hospital and Grove Clinic share a tax reporting ID of #41-4321-00-3. Since they represent separate process levels, Two Rivers groups them together for reporting in the same tax reporting group. Grove Hospital is the head process level with Grove Clinic dependent on it.
Two Rivers Services now has four process levels that share the federal tax ID of #41-4321-00-4. Therefore, Two Rivers groups them together for reporting in the same tax reporting group. River Bend Flowers and Gifts is the head process level, and Grove Flowers and Gifts, River Bend Restaurant, and Grove Cafe are dependent on it.
