CIT-SCH: Corporate Schedule of Non-Business Income/Loss (Revision)

Who files this form

CIT-SCH is for corporations claiming an exclusion for non-business income or losses from activities unrelated to those carried out in Delaware. The form allows this exclusion only under limited circumstances.

For each item, the corporation must demonstrate that:

• Delaware is not its commercial domicile.
• There is no unitary relationship between the corporation and the payor or source of the income.
• The income is investment income, rather than operational income.
• The income and apportionment factors have been appropriately adjusted for related expenses and items used to produce the income.

In general, the excluded income or loss must come from purely passive, investment, non-operational assets, and the activities producing it must take place outside Delaware.

What you'll need

Have the corporation’s name, address, taxpayer ID, and fiscal-year beginning and ending dates ready.

For each item of non-business income or loss, provide:

• A description and amount.
• The address of the corporation’s commercial domicile.
• The name and address of the payor or source of the income.
• A description of the relationship between the corporation and the payor or source.
• Answers about functional integration and centralized management.
• A list of common officers and/or directors.
• Schedules showing goods and services purchased from the payor or source, as percentages of total goods and services purchased.
• Schedules showing goods sold and services provided to the payor or source, as percentages of total goods sold and services provided.
• Schedules of the underlying income.
• Schedules of adjustments to allocable income and apportionment factors.

How to file

1. Enter the corporation’s identifying information and fiscal-year dates on page 1.
2. Identify each item of non-business income or loss by description and amount, and provide the supporting information and schedules required on page 2.
3. Add lines 1 through 5 and enter the total on line 6.
4. Enter that total on Form CIT-TAX, Schedule 4A, line 8.
5. Attach all pages of CIT-SCH to Form CIT-TAX.

The supplied form does not give a mailing address or e-filing instructions.

Common mistakes

• Leaving out pages or supporting schedules. The form says to attach all pages of CIT-SCH to CIT-TAX and provide documentation for every entry on page 1.
• Forgetting the CIT-TAX entry. The total from CIT-SCH must also be entered on CIT-TAX, Schedule 4A, line 8.
• Skipping related adjustments. The form requires adjustments to allocation and apportionment items when amounts are excluded as non-business income or losses. Related expenses and items used to produce the income must be taken into account.

Questions people ask

What is a corporation’s commercial domicile?

It is the principal place from which the corporation’s trade or business is directed or managed. To support an exclusion on this schedule, the corporation must demonstrate that Delaware is not its commercial domicile.

What does the form mean by a unitary relationship?

The corporation cannot demonstrate a lack of a unitary relationship if it and the payor or source are functionally integrated, have any centralized management, or take advantage of economies of scale between them.

Does interest on temporary investments of working capital qualify as investment income?

The form treats that interest as operational income. It also treats interest on investments intended to be applied to operations at maturity or later as operational income.

Can this schedule be used for losses as well as income?

Yes. The form allows qualifying non-business income and losses, net of related expenses, to be excluded under limited circumstances. They must arise from non-business activities unrelated to those carried out in Delaware.

Official sources

• https://revenuefiles.delaware.gov/2024/Business_Tax_Forms_2024_2025/CIT-SCH_2024-01_PaperInteractive.pdf