fae 170 instructions
FAE 170 is a critical form for Tennessee businesses, detailing franchise and excise tax returns. Recent updates include the addition of Schedule I for tax year 2024, emphasizing electronic filing and compliance with state-specific guidelines.

General Information About FAE 170
FAE 170 is Tennessee’s Franchise and Excise Tax Return, used for reporting business taxes. It includes schedules like Schedule I, introduced for tax year 2024, and requires electronic filing. The form is updated annually to reflect regulatory changes.
What is FAE 170?
FAE 170 is the official form used by the Tennessee Department of Revenue for reporting franchise and excise taxes. It is a comprehensive document that businesses must file annually to detail their tax liabilities. The form includes sections for income, deductions, and credits, ensuring compliance with state tax laws. Recent updates, such as the addition of Schedule I for the 2024 tax year, reflect ongoing efforts to adapt to changing tax regulations. FAE 170 is a crucial component of Tennessee’s tax system, enabling businesses to accurately report their financial activities and meet their tax obligations. Proper completion of this form is essential to avoid penalties and ensure adherence to both state and federal tax requirements;
Purpose of the Form
The FAE 170 form is designed to facilitate the reporting and calculation of franchise and excise taxes for businesses operating in Tennessee. Its primary purpose is to ensure compliance with state tax laws by providing a structured format for disclosing financial details. The form requires businesses to report their income, deductions, and credits, enabling the Tennessee Department of Revenue to assess the correct tax liability. It also serves as a platform for claiming tax credits, such as the Industrial Machinery Tax Credit detailed in Schedule T. Recent updates, including the introduction of Schedule I for the 2024 tax year, highlight the form’s adaptability to evolving tax regulations. By completing FAE 170 accurately, businesses demonstrate their commitment to meeting legal and financial obligations. The form is essential for maintaining transparency and accountability in Tennessee’s tax system, ensuring fair and equitable tax assessment across all industries.
Filing Requirements for FAE 170
FAE 170 must be filed electronically by all Tennessee businesses subject to franchise and excise taxes. The form ensures compliance with state tax laws and requires accurate reporting of financial details and tax credits, adhering to specific guidelines.
Who Needs to File FAE 170?
Businesses operating in Tennessee that are subject to franchise and excise taxes must file Form FAE 170. This includes corporations, limited liability companies, and other entities engaged in business activities within the state. The form is required for entities with a nexus in Tennessee, including those with physical presence or economic activity exceeding state thresholds. Specifically, businesses meeting certain criteria, such as owning tangible property or having payroll in the state, must comply. Additionally, any entity required to file federal income tax returns and conducting business in Tennessee must submit FAE 170. The form is also mandatory for businesses claiming tax credits or deductions under Tennessee tax laws. Even if no tax is owed, filing is still required to report financial activities. Failure to file may result in penalties and interest. Electronic filing is mandatory for all submissions, ensuring accurate and timely compliance with state tax regulations.
Deadlines for Filing
The deadline for filing Form FAE 170, Tennessee’s Franchise and Excise Tax Return, is typically April 15th for calendar-year filers. For fiscal-year filers, the deadline is the 15th day of the 4th month following the close of the tax year. Extensions are available, but they must be requested by the original deadline to avoid penalties. If the due date falls on a weekend or holiday, the deadline is extended to the next business day. It is crucial to file on time, as late submissions may result in penalties and interest. Additionally, any taxes owed must be paid by the original deadline to avoid accrual of interest. The Tennessee Department of Revenue encourages electronic filing, which streamlines the process and reduces errors. For amended returns, the same deadlines apply, but filers must check the appropriate box on the form. Missing the deadline can lead to compliance issues and financial penalties, so careful attention to these dates is essential for maintaining good standing with the state.

Electronic Filing Requirements
The Tennessee Department of Revenue mandates electronic filing for all FAE 170 and FAE 174 forms. This requirement applies to both the tax return and any associated payments. Electronic filing ensures accuracy, reduces processing time, and enhances compliance with state regulations. Filers must use approved software that supports the current tax year and adheres to the Department’s technical specifications. Payments can be made electronically through the Tennessee Taxpayer Access Point (TAP) portal, which offers options for electronic checks or credit card payments. Late payments, even if filed electronically, may incur penalties and interest. The Department emphasizes that electronic filing is mandatory and paper returns are no longer accepted unless under specific hardship exemptions. Filers are encouraged to review the latest updates on the Tennessee Department of Revenue’s website to ensure compliance with all electronic filing requirements. Proper adherence to these guidelines helps maintain efficient tax administration and avoids unnecessary delays or penalties.

Understanding the Structure of FAE 170
FAE 170 consists of a front page with taxpayer details and key identifiers. It includes schedules like Schedule I for new additions and Schedule T for industrial machinery tax credits, along with attachments for additional disclosures and calculations.
Front Page Details
The front page of the FAE 170 form requires essential taxpayer information, including the tax year beginning and ending dates, amended return status, and mailing address details. The legal name, state, ZIP code, FEIN, and account number must be accurately provided. A final return designation is included for entities terminating operations under Section 67-4-2009. This section ensures proper identification and filing status, with clear instructions for amended or final submissions. All fields are mandatory to avoid processing delays. The front page sets the foundation for the rest of the return, ensuring compliance with Tennessee Department of Revenue requirements.
Schedules and Attachments
The FAE 170 form requires several schedules and attachments to ensure accurate reporting of franchise and excise taxes. Schedule I, introduced for the 2024 tax year, is mandatory and provides details on new additions. Schedule T is specifically for claiming the Industrial Machinery Tax Credit, requiring precise computation of purchase prices and credits. Additional schedules, such as Schedule L, may be necessary for federal income revisions. Attachments should include supporting documents like the Franchise and Excise Tax Manual (updated December 2024) and any relevant FAQs. Proper organization of these schedules and attachments is crucial for compliance and avoiding delays in processing. Ensure all required sections are completed accurately, as incomplete submissions may result in penalties; Electronic filing is mandatory for FAE 170 and related forms, streamlining the process but requiring careful adherence to submission deadlines. Refer to the Tennessee Department of Revenue guidelines for specific instructions on completing and attaching these documents.

Schedules in FAE 170
FAE 170 includes essential schedules like Schedule I (new for 2024) and Schedule T for Industrial Machinery Tax Credit. These schedules provide detailed reporting on specific tax-related items, ensuring compliance and accurate tax calculations.

Schedule I: New Additions
Schedule I is a newly introduced section in the FAE 170 form, effective for the tax year ending December 31, 2024. It was added to enhance reporting requirements for specific transactions or adjustments not previously covered. The Tennessee Department of Revenue updated its Franchise and Excise Tax Manual in December 2024, with detailed guidance on Schedule I starting on page 106. This schedule is part of the FAE 170 and FAE 174 return packages, ensuring compliance with updated state tax regulations. Schedule I requires taxpayers to report new additions or changes to their tax obligations, providing clarity on how these items impact their franchise and excise tax calculations. The introduction of Schedule I reflects the state’s effort to streamline tax reporting and ensure accuracy. Taxpayers must carefully review the manual and FAQs provided by the TN DOR to ensure proper completion of this schedule. Electronic filing is mandatory for all FAE 170 and related forms, including Schedule I, to maintain compliance and avoid penalties.
Schedule T: Industrial Machinery Tax Credit

Schedule T is a specific section within the FAE 170 form designed to compute the Industrial Machinery Tax Credit. This schedule is essential for businesses claiming tax credits related to the purchase of industrial machinery. The credit is calculated based on the purchase price of qualifying machinery, with detailed instructions provided in the Tennessee Department of Revenue’s updated Franchise and Excise Tax Manual. Taxpayers must accurately report the purchase price and compute the credit in Part 1 of Schedule T. Additionally, Part 2 of the schedule allows for the carryover of unused credits to future tax years, ensuring businesses can maximize their tax benefits over time. Proper documentation and adherence to state guidelines are crucial to avoid errors or penalties. Schedule T is a key component of the FAE 170 form, enabling businesses to claim eligible tax credits while maintaining compliance with Tennessee’s tax regulations. Electronic filing is required for all FAE 170 forms, including Schedule T, to streamline the process and reduce errors.

Compliance and Regulatory Aspects
FAE 170 requires adherence to both state-specific and federal regulations. Businesses must comply with Tennessee’s updated tax manual and ensure accurate reporting. Electronic filing is mandatory, and Schedule I must be included for tax year 2024 and beyond.
State-Specific Compliance
State-specific compliance for FAE 170 involves adhering to Tennessee’s unique tax regulations. The Tennessee Department of Revenue has updated its Franchise and Excise Tax Manual, effective December 2024, which includes guidance on the new Schedule I. Businesses must ensure they meet all filing requirements, including electronic submission for FAE 170 and related forms like FAE 174. The manual provides detailed instructions, starting from page 106, to help taxpayers navigate the updated filing process. Additionally, Tennessee requires accurate reporting of franchise and excise taxes, with specific attention to Schedule I for tax year 2024 and beyond. Failure to comply with state-specific rules may result in penalties or delays in processing. It is essential to review the updated manual and consult the provided FAQs to ensure full compliance with Tennessee’s regulatory framework.
Federal Compliance Requirements
Federal compliance requirements for FAE 170 involve adhering to specific guidelines set by the Internal Revenue Service (IRS) and other federal agencies. While FAE 170 is primarily a state-specific form for Tennessee, it must align with federal tax reporting standards. Businesses are required to ensure that all financial data reported on FAE 170, including franchise and excise tax calculations, is consistent with federal tax filings. This includes accurate reporting of net income, deductions, and credits, as these figures are often derived from federal tax returns. Additionally, federal electronic filing requirements may apply to certain businesses, and Tennessee’s electronic filing mandate for FAE 170 and related forms, such as FAE 174, must be strictly followed. Failure to comply with federal standards could result in penalties or delays in processing. Taxpayers should consult the IRS guidelines and the Tennessee Department of Revenue’s updated Franchise and Excise Tax Manual for detailed instructions on meeting both state and federal requirements. Proper documentation and adherence to these regulations are essential for maintaining compliance.
Instructions for Completing FAE 170
Start by reviewing the front page details, ensuring accuracy in tax year, legal name, and FEIN. Complete schedules and attachments as required, calculating franchise tax apportionment and credits. Ensure electronic filing compliance and verify all data aligns with federal and state guidelines.
Line-by-Line Guidance
Line-by-line guidance for FAE 170 ensures accuracy in reporting franchise and excise taxes. Begin with Line 1, entering the total net income from federal tax returns. Line 2 requires the franchise tax apportionment ratio, calculated using Schedule 170NC, 170SF, or 170SC. Multiply Line 1 by Line 2 for Line 3, representing the apportioned income subject to franchise tax.

For Schedule T, compute the Industrial Machinery Tax Credit by detailing the purchase price of eligible machinery. Ensure all entries align with federal and state tax regulations. Review the updated Franchise and Excise Tax Manual for specific instructions on new additions, such as Schedule I, effective for tax year 2024.
Double-check calculations to avoid errors. Ensure compliance with electronic filing requirements and verify all data matches federal and state guidelines. Consult the manual or contact the Tennessee Department of Revenue for clarification on complex entries.
Calculating Franchise Tax Apportionment
Calculating franchise tax apportionment for FAE 170 involves determining the ratio of in-state to total business activities. This ratio is used to allocate income subject to Tennessee franchise tax. Begin by identifying the relevant schedules, such as Schedule 170NC, 170SF, or 170SC, which provide the necessary computations.
Enter the total net income from federal tax returns on Line 1. On Line 2, input the franchise tax apportionment ratio derived from the applicable schedule; Multiply Line 1 by Line 2 on Line 3 to determine the apportioned income subject to franchise tax. Ensure accuracy in these calculations, as errors can lead to compliance issues.
Recent updates, such as the addition of Schedule I for tax year 2024, emphasize the importance of adhering to state-specific guidelines. Electronic filing is now mandatory, and all data must align with federal and state tax regulations. Consult the Tennessee Department of Revenue’s updated manual for detailed guidance on apportionment and new requirements.
Electronic Filing and Submission

Electronic filing is now mandatory for all FAE 170 and FAE 174 franchise and excise tax returns in Tennessee. This requirement ensures compliance with state regulations and streamlines the submission process. Filers must use approved electronic platforms to submit their returns, payments, and related schedules.
When preparing for electronic submission, ensure all data aligns with federal and state tax regulations. Schedule I, introduced for tax year 2024, must be included in electronic filings. Additionally, schedules like Schedule T for Industrial Machinery Tax Credit should be accurately completed and attached digitally.
The Tennessee Department of Revenue provides detailed guidance in its updated manual, including filing FAQs and electronic submission protocols. Filers are encouraged to review these resources to avoid errors and ensure timely compliance. Electronic filing not only reduces processing times but also enhances accuracy and transparency in tax reporting.
- Use approved platforms for electronic submission.
- Ensure all schedules, including Schedule I, are included.
- Consult the Tennessee Department of Revenue’s manual for guidance.
By adhering to these requirements, businesses can efficiently meet their franchise and excise tax obligations in Tennessee.


























































































