Consolidated Tax Return Law and Legal Definition

Consolidated Tax Return is a combined tax return in the name of the parent company filed by companies organized as a group. It is a means of allowing corporations that are all part of an affiliated group to file one return for the annual period, rather than each entity filing a separate tax return. The ability to file a consolidated tax return depends on the exact nature of the connection between the parent organization and any subsidiaries that make up the group. Along with simplifying the tax reporting process, the filing of a consolidated tax return sometimes makes it possible for conglomerates and other affiliated groups to take advantage of certain tax breaks that would not be possible with individual filings. Consolidated tax returns are filed using the same forms and rules as all other taxpaying entities.