The following is a state by state guide to conformity to the Federal 965 Transition Tax Rules:
State Conformity - Click on a State to View Details
| DISTRICT OF COLUMBIA |
ALABAMA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts must be reported on Schedule A, Form 20C. Corporate taxpayers have access to a Dividends Received Deduction (DRD) to offset Section 965 income if the taxpayer owns more than 20% of the Deferred Foreign Income Corporation (DFIC)'s stock. Flow-Through taxpayers will mirror the federal reporting guidance.
Additional Information: Alabama is a rolling conformity state and has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA). However, IRC 965 income (net of related deductions) may be offset for purposes of the Alabama corporate income tax by the dividends received deduction if the corporation owns more than 20% of the stock, by vote or value, of the controlled foreign corporation from which the deemed dividend is received. Thus, Alabama does not conform to the federal deemed repatriation rules under IRC 965, as amended by the federal TCJA.
Reporting Information: Section 965 amounts must be reported on Schedule A, Form 20C. Corporate taxpayers have access to a Dividends Received Deduction (DRD) to offset Section 965 income if the taxpayer owns more than 20% of the Deferred Foreign Income Corporation (DFIC)'s stock. Flow-Through taxpayers will mirror the federal reporting guidance.
Additional Information: Alabama is a rolling conformity state and has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA). However, IRC 965 income (net of related deductions) may be offset for purposes of the Alabama corporate income tax by the dividends received deduction if the corporation owns more than 20% of the stock, by vote or value, of the controlled foreign corporation from which the deemed dividend is received. Thus, Alabama does not conform to the federal deemed repatriation rules under IRC 965, as amended by the federal TCJA.
ALASKA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts must be included in Alaska taxable income, but Alaska taxpayers are afforded an 80% Dividends Received Deduction (DRD) for foreign dividends received.
Additional Information: Although Alaska is a rolling conformity state and has not specifically decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA), the state does set forth special rules for member corporations of an affiliated group filing using the water's edge combined reporting method, including the exclusion of 80% of dividend income received from foreign corporations. Alaska thus does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
Reporting Information: Section 965 amounts must be included in Alaska taxable income, but Alaska taxpayers are afforded an 80% Dividends Received Deduction (DRD) for foreign dividends received.
Additional Information: Although Alaska is a rolling conformity state and has not specifically decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA), the state does set forth special rules for member corporations of an affiliated group filing using the water's edge combined reporting method, including the exclusion of 80% of dividend income received from foreign corporations. Alaska thus does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
ARIZONA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should be added to Federal Taxable income, and then subtracted due to the treatment of Subpart F income as excludable foreign income.
Additional Information: For tax years beginning from and after December 31, 2016 through December 31, 2017, Arizona conforms to the IRC, as amended, in effect on January 1, 2017, including provisions of the federal Tax Cuts and Jobs Act of 2017 (TCJA) that are retroactively effective during the 2017 tax year.
However, Arizona treats Subpart F income as a deemed dividend from a foreign corporation, which should be subtracted from taxable income. Arizona thus does not conform to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
Reporting Information: Section 965 amounts should be added to Federal Taxable income, and then subtracted due to the treatment of Subpart F income as excludable foreign income.
Additional Information: For tax years beginning from and after December 31, 2016 through December 31, 2017, Arizona conforms to the IRC, as amended, in effect on January 1, 2017, including provisions of the federal Tax Cuts and Jobs Act of 2017 (TCJA) that are retroactively effective during the 2017 tax year.
However, Arizona treats Subpart F income as a deemed dividend from a foreign corporation, which should be subtracted from taxable income. Arizona thus does not conform to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
ARKANSAS
Does the State Conform to Federal Guidelines? No
Reporting Information: IRC Sec 965 not adopted. Sec 965 amounts need to be subtracted out.
Additional Information: Arkansas is a selective conformity state and does not specifically adopt the federal deemed repatriation rules under IRC 965, as amended by the federal TCJA.
Notably, Arkansas also does not follow the federal treatment of Subpart F income and dividends received by a corporation doing business within the state from a subsidiary (if at least 80% of the subsidiary's capital stock is owned by a corporation doing business within the state) are exempt.
Reporting Information: IRC Sec 965 not adopted. Sec 965 amounts need to be subtracted out.
Additional Information: Arkansas is a selective conformity state and does not specifically adopt the federal deemed repatriation rules under IRC 965, as amended by the federal TCJA.
Notably, Arkansas also does not follow the federal treatment of Subpart F income and dividends received by a corporation doing business within the state from a subsidiary (if at least 80% of the subsidiary's capital stock is owned by a corporation doing business within the state) are exempt.
CALIFORNIA
Does the State Conform to Federal Guidelines? No
Reporting Information: Sec 965 amounts need to be removed on CA return. Taxpayers can make adjustments on CA540 (individuals) Schedule K (S-Corp/Partnership) and should omit all Sec 965 amounts on CA return for C-Corp and Fiduciary filers.
Program Details:
Reporting Information: Sec 965 amounts need to be removed on CA return. Taxpayers can make adjustments on CA540 (individuals) Schedule K (S-Corp/Partnership) and should omit all Sec 965 amounts on CA return for C-Corp and Fiduciary filers.
Program Details:
Lacerte: California will automatically calculate an adjustment on Schedule CA, line 21 / Schedule CANR, line 21f.
Additional Information: California conforms to the IRC as of January 1, 2015, when an IRC provision is incorporated by reference. When water's-edge provisions refer to an IRC provision, however, California conforms to the IRC provision in effect for federal purposes for the same taxable period. California does not incorporate by reference IRC § 965 and the water's-edge provisions do not specifically refer to IRC § 965. Thus, California does not conform to the post-TCJA IRC § 965 deemed repatriation rules.
COLORADO
Does the State Conform to Federal Guidelines? Yes
Reporting Information: 965 amounts included on the Transition Tax Statements must be added to federal taxable income on Line 1 of the taxpayer's CO corporate return less any associated deductions.
Additional Information: Colorado, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the TCJA and conforms to the federal treatment of Subpart F income. Thus, Colorado conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
Reporting Information: 965 amounts included on the Transition Tax Statements must be added to federal taxable income on Line 1 of the taxpayer's CO corporate return less any associated deductions.
Additional Information: Colorado, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the TCJA and conforms to the federal treatment of Subpart F income. Thus, Colorado conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
CONNECTICUT
Does the State Conform to Federal Guidelines? No
Reporting Information: Federal 965 amounts need to be added to Line 9 on CT-1120. Additionally, CT corporate taxpayers are allowed a dividend received reduction to fully offset the 965 amounts; however, the taxpayer must add back expenses related to dividend income which is set at a statutory rate of 5% of 965 amounts. The 965 amounts also need to be reported on form CT-1120 ATT, Schedule I, Column A, Lines 1 and 3 to claim the Dividends Received Deduction (DRD). Flow-through entity taxpayers/individuals will have their 965 amounts automatically included in Federal taxable income when completing their Connecticut return. Connecticut did not adopt the election to defer payment within an 8-year installment period.
Additional Information: Connecticut's dividend received deduction fully offsets the amount of any required inclusion. Connecticut, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA) and the state has issued official guidance requiring the full amounts included in federal taxable income pursuant to IRC §965 to also be included in Connecticut taxable income on Line 9 of Form CT-1120, Schedule D and Form CT-1120 ATT, Schedule I, Column A.
However, Connecticut provides a dividend received deduction that fully offsets dividend income received from foreign corporations. In addition, Connecticut requires a corporation that claims a dividend received deduction to add back expenses related to such dividend income. The amount of reportable expenses would equal 5% of IRC 965 income.
Reporting Information: Federal 965 amounts need to be added to Line 9 on CT-1120. Additionally, CT corporate taxpayers are allowed a dividend received reduction to fully offset the 965 amounts; however, the taxpayer must add back expenses related to dividend income which is set at a statutory rate of 5% of 965 amounts. The 965 amounts also need to be reported on form CT-1120 ATT, Schedule I, Column A, Lines 1 and 3 to claim the Dividends Received Deduction (DRD). Flow-through entity taxpayers/individuals will have their 965 amounts automatically included in Federal taxable income when completing their Connecticut return. Connecticut did not adopt the election to defer payment within an 8-year installment period.
Additional Information: Connecticut's dividend received deduction fully offsets the amount of any required inclusion. Connecticut, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA) and the state has issued official guidance requiring the full amounts included in federal taxable income pursuant to IRC §965 to also be included in Connecticut taxable income on Line 9 of Form CT-1120, Schedule D and Form CT-1120 ATT, Schedule I, Column A.
However, Connecticut provides a dividend received deduction that fully offsets dividend income received from foreign corporations. In addition, Connecticut requires a corporation that claims a dividend received deduction to add back expenses related to such dividend income. The amount of reportable expenses would equal 5% of IRC 965 income.
DELAWARE
Does the State Conform to Federal Guidelines? No
Reporting Information: Sec 965 income should be included in the computation of Delaware taxable income; however, taxpayers are afforded an exclusion for Subpart F income.
Additional Information: Delaware, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). However, Delaware does not conform to the federal treatment of Subpart F income. Thus, Delaware does not conform to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
Reporting Information: Sec 965 income should be included in the computation of Delaware taxable income; however, taxpayers are afforded an exclusion for Subpart F income.
Additional Information: Delaware, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). However, Delaware does not conform to the federal treatment of Subpart F income. Thus, Delaware does not conform to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
DISTRICT OF COLUMBIA
Does the State Conform to Federal Guidelines? No (pending guidance)
Reporting Information: In the absence of official guidance, it is unclear how any repatriation transition tax amounts should be reported for District income tax purposes.
Additional Information: The District of Columbia, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). However, a deduction is available for Subpart F income as defined in IRC 952. Guidance has not been issued indicating whether the District will interpret this deduction as applicable to Subpart F income that is included in gross income under IRC 951(a), pursuant to IRC 965.
Reporting Information: In the absence of official guidance, it is unclear how any repatriation transition tax amounts should be reported for District income tax purposes.
Additional Information: The District of Columbia, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). However, a deduction is available for Subpart F income as defined in IRC 952. Guidance has not been issued indicating whether the District will interpret this deduction as applicable to Subpart F income that is included in gross income under IRC 951(a), pursuant to IRC 965.
FLORIDA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts are not included in FL taxable income, and should be excluded from FL return.
Additional Information: Although the Florida corporate income tax calculation begins with a taxpayer's "taxable income" as defined under IRC § 63 as amended and in effect on January 1, 2018, which includes any IRC § 965 income required to be included in the last tax year beginning before January 1, 2018, repatriation income under IRC § 965 does not flow into federal taxable income and there is no Florida addition for repatriated income excluded from the federal income tax computation. Thus, no Florida corporate income tax is due on repatriation income that is excluded from the standard computation of federal taxable income. In addition, such repatriation income is excluded from the Florida apportionment fraction computation. However, if the repatriation income flows into federal taxable income (e.g., federal Form 1120-REIT), it is included in the starting point of the Florida corporate income tax computation but the repatriated amount is subtracted as subpart F income, net of direct and indirect expenses incurred in the tax year. Thus, Florida does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Section 965 amounts are not included in FL taxable income, and should be excluded from FL return.
Additional Information: Although the Florida corporate income tax calculation begins with a taxpayer's "taxable income" as defined under IRC § 63 as amended and in effect on January 1, 2018, which includes any IRC § 965 income required to be included in the last tax year beginning before January 1, 2018, repatriation income under IRC § 965 does not flow into federal taxable income and there is no Florida addition for repatriated income excluded from the federal income tax computation. Thus, no Florida corporate income tax is due on repatriation income that is excluded from the standard computation of federal taxable income. In addition, such repatriation income is excluded from the Florida apportionment fraction computation. However, if the repatriation income flows into federal taxable income (e.g., federal Form 1120-REIT), it is included in the starting point of the Florida corporate income tax computation but the repatriated amount is subtracted as subpart F income, net of direct and indirect expenses incurred in the tax year. Thus, Florida does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
GEORGIA
Does the State Conform to Federal Guidelines? No
Reporting Information: Georgia does not require Sec 965 amounts to be included on Georgia income tax returns; however, if the amounts are included in the starting point of Federal taxable income, then the amounts need to be removed.
Additional Information: Georgia's corporate income tax calculation begins with a taxpayer's "taxable income" as defined under the IRC as enacted on or before February 9, 2018. However, Georgia requires Subpart F income (as defined by the IRC) to be subtracted from taxable income, and does not permit a taxpayer to take the subtraction under IRC § 965 to the extent the income to which it relates has been subtracted. Thus, Georgia does not conform to the federal repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act.
Reporting Information: Georgia does not require Sec 965 amounts to be included on Georgia income tax returns; however, if the amounts are included in the starting point of Federal taxable income, then the amounts need to be removed.
Additional Information: Georgia's corporate income tax calculation begins with a taxpayer's "taxable income" as defined under the IRC as enacted on or before February 9, 2018. However, Georgia requires Subpart F income (as defined by the IRC) to be subtracted from taxable income, and does not permit a taxpayer to take the subtraction under IRC § 965 to the extent the income to which it relates has been subtracted. Thus, Georgia does not conform to the federal repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act.
HAWAII
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included on HI income tax returns.
Additional Information: Applicable to taxable years beginning after December 31, 2017, the IRC Section 951A inclusion and IRC Section 250 deduction are not operative for Hawaii tax purposes and so Hawaii does not conform to the Global Intangible Low-Taxed Income (GILTI) provisions enacted by the Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Section 965 amounts should not be included on HI income tax returns.
Additional Information: Applicable to taxable years beginning after December 31, 2017, the IRC Section 951A inclusion and IRC Section 250 deduction are not operative for Hawaii tax purposes and so Hawaii does not conform to the Global Intangible Low-Taxed Income (GILTI) provisions enacted by the Tax Cuts and Jobs Act of 2017 (TCJA).
IDAHO
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts must be included in ID taxable income, and the participation deduction allowed under Section 965(C) must be added back when computing Idaho taxable income.
Additional Information: Idaho conforms to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), but requires corporate taxpayers to add back the amount deducted under IRC § 965(c), as amended by the TCJA, when computing Idaho taxable income.
For 2017 Idaho income tax returns, taxpayers must report and pay tax on the repatriation of previously unreported overseas earnings that could apply to 2017. Taxpayers who file on a water's-edge basis should attach their IRC § 965 Transition Tax Statement to their Idaho return.
Reporting Information: Section 965 amounts must be included in ID taxable income, and the participation deduction allowed under Section 965(C) must be added back when computing Idaho taxable income.
Additional Information: Idaho conforms to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), but requires corporate taxpayers to add back the amount deducted under IRC § 965(c), as amended by the TCJA, when computing Idaho taxable income.
For 2017 Idaho income tax returns, taxpayers must report and pay tax on the repatriation of previously unreported overseas earnings that could apply to 2017. Taxpayers who file on a water's-edge basis should attach their IRC § 965 Transition Tax Statement to their Idaho return.
ILLINOIS
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts must be added to IL taxable income, and the taxpayer can then take a subtraction SCH M for the excludable portion of foreign dividends.
Additional Information: Corporate taxpayers must include IRC § 965 net income (IRC § 965(a) amount less IRC § 965(c) deduction) on Schedule M. The Illinois subtraction modification for foreign dividends on Schedule J will exclude a portion of the increase from Illinois base income for certain taxpayers.
Illinois does not follow either the election under IRC § 965(h) to pay the tax liability in installments over eight years or the election under IRC § 965(i) in the case of S corporation shareholders to defer payment of the tax liability until the taxable year which includes a triggering event.
Reporting Information: Section 965 amounts must be added to IL taxable income, and the taxpayer can then take a subtraction SCH M for the excludable portion of foreign dividends.
Additional Information: Corporate taxpayers must include IRC § 965 net income (IRC § 965(a) amount less IRC § 965(c) deduction) on Schedule M. The Illinois subtraction modification for foreign dividends on Schedule J will exclude a portion of the increase from Illinois base income for certain taxpayers.
Illinois does not follow either the election under IRC § 965(h) to pay the tax liability in installments over eight years or the election under IRC § 965(i) in the case of S corporation shareholders to defer payment of the tax liability until the taxable year which includes a triggering event.
INDIANA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in IN taxable income.
Additional Information: Indiana conforms to the Internal Revenue Code as amended and in effect on February 11, 2018, and specifically decouples from the federal treatment of Subpart F income. Thus, Indiana does not conform to the federal deemed repatriation rules under IRC §965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). Update: 05/14/2018 eff. retroactive to 01/01/2018. Before 01/01/2018, Indiana conformed to IRC as amended and in effect on 01/01/2016.
Reporting Information: Section 965 amounts should not be included in IN taxable income.
Additional Information: Indiana conforms to the Internal Revenue Code as amended and in effect on February 11, 2018, and specifically decouples from the federal treatment of Subpart F income. Thus, Indiana does not conform to the federal deemed repatriation rules under IRC §965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). Update: 05/14/2018 eff. retroactive to 01/01/2018. Before 01/01/2018, Indiana conformed to IRC as amended and in effect on 01/01/2016.
IOWA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included on IA income tax returns.
Additional Information: Iowa conforms to the Internal Revenue Code as amended and in effect on January 1, 2015, and specifically does not include any amendment to the IRC enacted after that date, including any amendment with retroactive applicability or effectiveness. Iowa, therefore, does not conform to the deemed repatriation rules under IRC § 965 as amended by the federal Tax Cut and Jobs Act.
Reporting Information: Section 965 amounts should not be included on IA income tax returns.
Additional Information: Iowa conforms to the Internal Revenue Code as amended and in effect on January 1, 2015, and specifically does not include any amendment to the IRC enacted after that date, including any amendment with retroactive applicability or effectiveness. Iowa, therefore, does not conform to the deemed repatriation rules under IRC § 965 as amended by the federal Tax Cut and Jobs Act.
KANSAS
Does the State Conform to Federal Guidelines? Yes
Reporting Information: 965 amounts are included in KS taxable income, but the taxpayer is afforded an 80% exclusion for foreign dividends.
Additional Information: Although Kansas is a rolling conformity state, corporate taxpayers are allowed to subtract 80% of dividends received from corporations incorporated outside of the U.S. or DC, which are included in federal taxable income. Thus, Kansas does not conform to the deemed repatriation rules under IRC § 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: 965 amounts are included in KS taxable income, but the taxpayer is afforded an 80% exclusion for foreign dividends.
Additional Information: Although Kansas is a rolling conformity state, corporate taxpayers are allowed to subtract 80% of dividends received from corporations incorporated outside of the U.S. or DC, which are included in federal taxable income. Thus, Kansas does not conform to the deemed repatriation rules under IRC § 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
KENTUCKY
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in KY taxable income.
Additional Information: For tax years beginning prior to January 1, 2018, Kentucky conforms to the IRC in effect on December 31, 2015, exclusive of any amendments made subsequent to that date, other than amendments that extend provisions in effect on December 31, 2015, that would otherwise terminate. Kentucky thus does not conform to the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). Kentucky also allows corporations to exclude all dividend income received after December 31, 1969, from gross income. Since all Subpart F income is subtracted in arriving at Kentucky net income, IRC §965 is not a consideration for Kentucky tax purposes. Kentucky thus does not conform to the federal deemed repatriation rules under IRC §965, as amended by the TCJA.
Reporting Information: Section 965 amounts should not be included in KY taxable income.
Additional Information: For tax years beginning prior to January 1, 2018, Kentucky conforms to the IRC in effect on December 31, 2015, exclusive of any amendments made subsequent to that date, other than amendments that extend provisions in effect on December 31, 2015, that would otherwise terminate. Kentucky thus does not conform to the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). Kentucky also allows corporations to exclude all dividend income received after December 31, 1969, from gross income. Since all Subpart F income is subtracted in arriving at Kentucky net income, IRC §965 is not a consideration for Kentucky tax purposes. Kentucky thus does not conform to the federal deemed repatriation rules under IRC §965, as amended by the TCJA.
LOUISIANA
Does the State Conform to Federal Guidelines? Yes
Reporting Information: LA is in full conformity, and all section 965 amounts should be included in LA taxable income.
Additional Information: Louisiana, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC §965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), and conforms to the federal treatment of Subpart F income. Thus, Louisiana conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
Reporting Information: LA is in full conformity, and all section 965 amounts should be included in LA taxable income.
Additional Information: Louisiana, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC §965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), and conforms to the federal treatment of Subpart F income. Thus, Louisiana conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
MAINE
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in Maine income.
Additional Information: Maine conforms to the Internal Revenue Code of 1986 as amended through December 31, 2016, and thus does not conform to the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Section 965 amounts should not be included in Maine income.
Additional Information: Maine conforms to the Internal Revenue Code of 1986 as amended through December 31, 2016, and thus does not conform to the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
MARYLAND
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts are included in Maryland taxable income by Maryland taxpayers owning 50% or more of the stock of a corporation organized under the laws of a foreign government are afforded a 50% exclusion of dividend income from that corporation.
Additional Information: Maryland, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). However, Maryland allows a subtraction of dividends from a corporation if the taxpayer owns 50% or more of the paying corporation's outstanding shares of capital stock and the paying corporation is organized under the laws of a foreign government. Thus, Maryland does not conform to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
Reporting Information: Section 965 amounts are included in Maryland taxable income by Maryland taxpayers owning 50% or more of the stock of a corporation organized under the laws of a foreign government are afforded a 50% exclusion of dividend income from that corporation.
Additional Information: Maryland, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). However, Maryland allows a subtraction of dividends from a corporation if the taxpayer owns 50% or more of the paying corporation's outstanding shares of capital stock and the paying corporation is organized under the laws of a foreign government. Thus, Maryland does not conform to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
MASSACHUSETTS
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should be included in MA taxable income, but MA taxpayers are afforded a 95% exclusion of subpart F income.
Additional Information: Although Massachusetts is a rolling conformity state, in calculating net income for purposes of the corporate income tax, the state provides for an exclusion of 95% of certain dividends. Subpart F income included in a corporation's federal gross income is treated as a dividend for Massachusetts corporate excise tax purposes and qualifies for Massachusett's dividends received deduction. Thus, Massachusetts does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cut and Jobs Act.
Reporting Information: Section 965 amounts should be included in MA taxable income, but MA taxpayers are afforded a 95% exclusion of subpart F income.
Additional Information: Although Massachusetts is a rolling conformity state, in calculating net income for purposes of the corporate income tax, the state provides for an exclusion of 95% of certain dividends. Subpart F income included in a corporation's federal gross income is treated as a dividend for Massachusetts corporate excise tax purposes and qualifies for Massachusett's dividends received deduction. Thus, Massachusetts does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cut and Jobs Act.
MICHIGAN
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should be included in MI income, but MI taxpayers are afforded an exclusion for dividends received from foreign corporations for 100% of the amount that is included in federal taxable income.
Additional Information: Although Michigan conforms to the IRC in effect on January 1, 2018, there is an exclusion from the base for the corporate income tax for dividends received from persons other than United States persons and foreign operating entities to the extent included in federal taxable income. This includes, but is not limited to, amounts determined under IRC § 78 or IRC § 951 to IRC § 964.
Reporting Information: Section 965 amounts should be included in MI income, but MI taxpayers are afforded an exclusion for dividends received from foreign corporations for 100% of the amount that is included in federal taxable income.
Additional Information: Although Michigan conforms to the IRC in effect on January 1, 2018, there is an exclusion from the base for the corporate income tax for dividends received from persons other than United States persons and foreign operating entities to the extent included in federal taxable income. This includes, but is not limited to, amounts determined under IRC § 78 or IRC § 951 to IRC § 964.
MINNESOTA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in MN income.
Additional Information: Minnesota conforms to the Internal Revenue Code of 1986, as amended through December 16, 2016, and thus does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
Reporting Information: Section 965 amounts should not be included in MN income.
Additional Information: Minnesota conforms to the Internal Revenue Code of 1986, as amended through December 16, 2016, and thus does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
MISSISSIPPI
Does the State Conform to Federal Guidelines? No (pending guidance)
Reporting Information: For tax reporting purposes, a corporation's computation of Mississippi taxable income begins with federal taxable income as reported on line 28 of IRS Form 1120 (which does not include federal deemed repatriation transition amounts). In the absence of official guidance, it is unclear how the federal deemed repatriation amounts, if any, should be reported for state income tax purposes.
Additional Information: Mississippi follows federal rules, regulations and revenue procedures relating to dividends to the extent that such procedures are not deemed contrary to the context and intent of Mississippi Law. As a selective conformity state, Mississippi has not specifically conformed to or decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the TCJA. However, dividends are included in Mississippi taxable income, with modifications to the extent dividends are received by a holding corporation from a subsidiary corporation. Thus, Mississippi does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
Reporting Information: For tax reporting purposes, a corporation's computation of Mississippi taxable income begins with federal taxable income as reported on line 28 of IRS Form 1120 (which does not include federal deemed repatriation transition amounts). In the absence of official guidance, it is unclear how the federal deemed repatriation amounts, if any, should be reported for state income tax purposes.
Additional Information: Mississippi follows federal rules, regulations and revenue procedures relating to dividends to the extent that such procedures are not deemed contrary to the context and intent of Mississippi Law. As a selective conformity state, Mississippi has not specifically conformed to or decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the TCJA. However, dividends are included in Mississippi taxable income, with modifications to the extent dividends are received by a holding corporation from a subsidiary corporation. Thus, Mississippi does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
MISSOURI
Does the State Conform to Federal Guidelines? Yes
Reporting Information: Missouri is in full conformity with the TCJA amended IRC, and requires that section 965 amounts be included in Missouri taxable income.
Additional Information: Missouri, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), and conforms to the federal treatment of Subpart F income. Thus, Missouri conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
Reporting Information: Missouri is in full conformity with the TCJA amended IRC, and requires that section 965 amounts be included in Missouri taxable income.
Additional Information: Missouri, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), and conforms to the federal treatment of Subpart F income. Thus, Missouri conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
MONTANA
Does the State Conform to Federal Guidelines? Yes
Reporting Information: Montana is in full conformity with the IRC as amended by the TCJA. Section 965 amounts should be included in Montana taxable income.
Additional Information: Montana, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), and conforms to the federal treatment of Subpart F income. Thus, Montana conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
Reporting Information: Montana is in full conformity with the IRC as amended by the TCJA. Section 965 amounts should be included in Montana taxable income.
Additional Information: Montana, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), and conforms to the federal treatment of Subpart F income. Thus, Montana conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
NEBRASKA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in Nebraska taxable income.
Additional Information: Nebraska, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the TCJA, but does not conform to the federal treatment of Subpart F income. As such, Nebraska does not conform to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
Reporting Information: Section 965 amounts should not be included in Nebraska taxable income.
Additional Information: Nebraska, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the TCJA, but does not conform to the federal treatment of Subpart F income. As such, Nebraska does not conform to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
NEVADA
Nevada has no state income tax.
NEW HAMPSHIRE
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in New Hampshire taxable income.
Additional Information: For tax years beginning on or after January 1, 2017, and prior to January 1, 2018, New Hampshire conformed to the Internal Revenue Code as of December 31, 2015. For tax years beginning on or after January 1, 2018, New Hampshire conforms to the Internal Revenue Code in effect on December 31, 2016. For tax years beginning on or after January 1, 2000, but prior to January 1, 2017, New Hampshire conformed to the Internal Revenue Code in effect on December 31, 2000. Thus, New Hampshire does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Section 965 amounts should not be included in New Hampshire taxable income.
Additional Information: For tax years beginning on or after January 1, 2017, and prior to January 1, 2018, New Hampshire conformed to the Internal Revenue Code as of December 31, 2015. For tax years beginning on or after January 1, 2018, New Hampshire conforms to the Internal Revenue Code in effect on December 31, 2016. For tax years beginning on or after January 1, 2000, but prior to January 1, 2017, New Hampshire conformed to the Internal Revenue Code in effect on December 31, 2000. Thus, New Hampshire does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
NEW JERSEY
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should be included in New Jersey taxable income. Taxpayers are then allowed a 95% dividend exclusion.
Additional Information: For New Jersey Corporation Business Tax purposes, a shareholder's pro rata share of deemed repatriation dividends are included in entire net income before the dividend exclusion.
Entire net income after the dividends exclusion is reduced (1) by 95% of the dividends if the recipient of the dividends owns 80% or more of the stock, and (2) by 50% of the dividends if the corporation owns 50% or more of the stock.
Reporting Information: Section 965 amounts should be included in New Jersey taxable income. Taxpayers are then allowed a 95% dividend exclusion.
Additional Information: For New Jersey Corporation Business Tax purposes, a shareholder's pro rata share of deemed repatriation dividends are included in entire net income before the dividend exclusion.
Entire net income after the dividends exclusion is reduced (1) by 95% of the dividends if the recipient of the dividends owns 80% or more of the stock, and (2) by 50% of the dividends if the corporation owns 50% or more of the stock.
NEW MEXICO
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in New Mexico income.
Additional Information: New Mexico, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), but does not conform to the federal treatment of Subpart F income. Thus, New Mexico does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
Reporting Information: Section 965 amounts should not be included in New Mexico income.
Additional Information: New Mexico, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), but does not conform to the federal treatment of Subpart F income. Thus, New Mexico does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
NEW YORK
Does the State Conform to Federal Guidelines? No (New York City - Yes)
Reporting Information: New York taxpayers should not include Section 965 income in computation of New York taxable income; however, section 965 income must be included to compute NYC taxable income.
Additional Information: Exempt Controlled Foreign Corporation (CFC) income includes deemed repatriation amounts under IRC § 965(a), as adjusted by IRC § 965(b), and without regard to IRC § 965(c). New York does not conform to the federal deemed repatriation provisions under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). For purposes of the New York City General Corporation Tax, the Banking Corporation Tax, and the Unincorporated Business Tax, taxpayers must include net section 965 income in calculating the City tax.
Reporting Information: New York taxpayers should not include Section 965 income in computation of New York taxable income; however, section 965 income must be included to compute NYC taxable income.
Additional Information: Exempt Controlled Foreign Corporation (CFC) income includes deemed repatriation amounts under IRC § 965(a), as adjusted by IRC § 965(b), and without regard to IRC § 965(c). New York does not conform to the federal deemed repatriation provisions under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). For purposes of the New York City General Corporation Tax, the Banking Corporation Tax, and the Unincorporated Business Tax, taxpayers must include net section 965 income in calculating the City tax.
NORTH CAROLINA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in North Carolina taxable income.
Additional Information: North Carolina conforms to the Internal Revenue Code enacted as of January 1, 2017, including any provisions enacted as of that date that become effective before or after that date. Thus, North Carolina does not conform to the federal deemed repatriation provisions under IRC §965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Section 965 amounts should not be included in North Carolina taxable income.
Additional Information: North Carolina conforms to the Internal Revenue Code enacted as of January 1, 2017, including any provisions enacted as of that date that become effective before or after that date. Thus, North Carolina does not conform to the federal deemed repatriation provisions under IRC §965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
NORTH DAKOTA
Does the State Conform to Federal Guidelines? Yes
Reporting Information: In the absence of official state guidance, it is unclear how any repatriation transition tax additions should be reported for state income tax purposes.
Additional Information: North Dakota, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA) and conforms to the federal treatment of Subpart F income. Thus, North Dakota conforms to the federal deemed repatriation ruled under IRC 965, as amended by the TCJA.
Note, however, that according to the Form 40 instructions, a corporation's North Dakota computation of taxable income begins with federal taxable income as reported on line 30 of IRS Form 1120 (which does not include repatriation transition tax additions).
Reporting Information: In the absence of official state guidance, it is unclear how any repatriation transition tax additions should be reported for state income tax purposes.
Additional Information: North Dakota, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA) and conforms to the federal treatment of Subpart F income. Thus, North Dakota conforms to the federal deemed repatriation ruled under IRC 965, as amended by the TCJA.
Note, however, that according to the Form 40 instructions, a corporation's North Dakota computation of taxable income begins with federal taxable income as reported on line 30 of IRS Form 1120 (which does not include repatriation transition tax additions).
OHIO
No Current GuidanceOKLAHOMA
Does the State Conform to Federal Guidelines? Yes
Reporting Information: Oklahoma is in full conformity with the IRC as amended by the TCJA.
Additional Information: Oklahoma, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA) and conforms to the federal treatment of Subpart F income. Thus, Oklahoma conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
Reporting Information: Oklahoma is in full conformity with the IRC as amended by the TCJA.
Additional Information: Oklahoma, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA) and conforms to the federal treatment of Subpart F income. Thus, Oklahoma conforms to the federal deemed repatriation rules under IRC 965, as amended by the TCJA.
OREGON
Does the State Conform to Federal Guidelines? No
Reporting Information: Oregon has been refactored to meet non-conformity provisions.
Additional Information: For purposes of determining "taxable income," Oregon conforms to the IRC on a rolling basis. However, Oregon requires an add back of amounts deducted for income deemed or actually repatriated under IRC §965, as amended by the federal TCJA. Oregon also provides a credit for the state tax attributable to income reported under IRC 965. Thus, Oregon does not conform to the federal deemed repatriation rules under IRC §965, as amended by the TCJA.
Instead, Oregon corporate taxpayers must include the gross amount of the IRC §965 inclusion in their Oregon taxable income by adding to federal taxable income the amount included on Line 1 of the IRC 965 Transition Tax Statement, on Schedule OR-ASC-CORP, using code 184, and including a copy of the federal Transition Tax Statement with the Oregon return. Oregon allows an 80% dividend received deduction against the deemed repatriation inclusion amount if the repatriation is derived from a 20% owned corporation (defined under Or. Rev. Stat. 317.267(2)(b), and a 70% dividend received deduction in all other instances. The dividend received deduction should be reported on Schedule OR-ASC-CORP using code 377. Finally, Oregon allows a credit that cannot exceed the lesser of (1) the amount of Oregon tax attributable to the inclusion under IRC §965 the 2017 tax year, or (b) the total tax (if any) that is attributable to the Oregon addition (under Or. Rev. Stat. 317.716) to the unitary.
Reporting Information: Oregon has been refactored to meet non-conformity provisions.
Additional Information: For purposes of determining "taxable income," Oregon conforms to the IRC on a rolling basis. However, Oregon requires an add back of amounts deducted for income deemed or actually repatriated under IRC §965, as amended by the federal TCJA. Oregon also provides a credit for the state tax attributable to income reported under IRC 965. Thus, Oregon does not conform to the federal deemed repatriation rules under IRC §965, as amended by the TCJA.
Instead, Oregon corporate taxpayers must include the gross amount of the IRC §965 inclusion in their Oregon taxable income by adding to federal taxable income the amount included on Line 1 of the IRC 965 Transition Tax Statement, on Schedule OR-ASC-CORP, using code 184, and including a copy of the federal Transition Tax Statement with the Oregon return. Oregon allows an 80% dividend received deduction against the deemed repatriation inclusion amount if the repatriation is derived from a 20% owned corporation (defined under Or. Rev. Stat. 317.267(2)(b), and a 70% dividend received deduction in all other instances. The dividend received deduction should be reported on Schedule OR-ASC-CORP using code 377. Finally, Oregon allows a credit that cannot exceed the lesser of (1) the amount of Oregon tax attributable to the inclusion under IRC §965 the 2017 tax year, or (b) the total tax (if any) that is attributable to the Oregon addition (under Or. Rev. Stat. 317.716) to the unitary.
PENNSYLVANIA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 income is included in the computation of Pennsylvania taxable income; however, Pennsylvania taxpayers are allowed a dividend received deduction against subpart F income.
Additional Information: Since Repatriation Transition Tax (RTT) income is included in a U.S. shareholder's subpart F income and subpart F income is included in the definition of federal taxable income for purposes of the Pennsylvania Corporate Net Income Tax (CNIT), RTT income is subject to CNIT because it is part of federal taxable income. However, net RTT income is subject to a dividends received deduction under Pennsylvania law. Thus, Pennsylvania does not entirely conform to the deemed repatriation rules under IRC 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Section 965 income is included in the computation of Pennsylvania taxable income; however, Pennsylvania taxpayers are allowed a dividend received deduction against subpart F income.
Additional Information: Since Repatriation Transition Tax (RTT) income is included in a U.S. shareholder's subpart F income and subpart F income is included in the definition of federal taxable income for purposes of the Pennsylvania Corporate Net Income Tax (CNIT), RTT income is subject to CNIT because it is part of federal taxable income. However, net RTT income is subject to a dividends received deduction under Pennsylvania law. Thus, Pennsylvania does not entirely conform to the deemed repatriation rules under IRC 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
RHODE ISLAND
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in the computation of Rhode Island taxable income.
Additional Information: Rhode Island, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), but does not conform to the federal treatment of Subpart F income. Thus, Rhode Island does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
Reporting Information: Section 965 amounts should not be included in the computation of Rhode Island taxable income.
Additional Information: Rhode Island, a rolling conformity state, has not decoupled from the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA), but does not conform to the federal treatment of Subpart F income. Thus, Rhode Island does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
SOUTH CAROLINA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in the computation of South Carolina taxable income.
Additional Information: South Carolina specifically decouples from the federal rules governing the taxation of foreign income, including IRC § 944 through IRC § 989 (Subpart F income). Thus, South Carolina does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Section 965 amounts should not be included in the computation of South Carolina taxable income.
Additional Information: South Carolina specifically decouples from the federal rules governing the taxation of foreign income, including IRC § 944 through IRC § 989 (Subpart F income). Thus, South Carolina does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
SOUTH DAKOTA
South Dakota has no state income tax.
TENNESSEE
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in the computation of Tennessee taxable income.
Additional Information: Tennessee does not follow the federal deemed repatriation rules under IRC §965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
The starting point for determining income subject to the Tennessee excise tax is federal taxable income as reported on federal Form 1120. Since earnings deemed repatriated under IRC §965, as amended by the TCJA, are reported on IRC 965 Transition Tax Statement and not reported as part of federal taxable income on federal Form 1120, those earnings are not included in the net earnings calculation on the Tennessee Schedule J-4, and should not be deducted as dividends, nor should they be included in the apportionment formula.
Reporting Information: Section 965 amounts should not be included in the computation of Tennessee taxable income.
Additional Information: Tennessee does not follow the federal deemed repatriation rules under IRC §965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
The starting point for determining income subject to the Tennessee excise tax is federal taxable income as reported on federal Form 1120. Since earnings deemed repatriated under IRC §965, as amended by the TCJA, are reported on IRC 965 Transition Tax Statement and not reported as part of federal taxable income on federal Form 1120, those earnings are not included in the net earnings calculation on the Tennessee Schedule J-4, and should not be deducted as dividends, nor should they be included in the apportionment formula.
TEXAS
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 amounts should not be included in the computation of Texas taxable income.
Additional Information: Texas does not follow the federal treatment of Subpart F income, and thus does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Section 965 amounts should not be included in the computation of Texas taxable income.
Additional Information: Texas does not follow the federal treatment of Subpart F income, and thus does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA).
UTAH
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 income should be included in the computation of UT taxable income; however, UT taxpayers are afforded an exclusion of 50% of subpart F income.
Additional Information: Utah, a rolling conformity state, allows certain corporate taxpayers to pay in installments the tax owed on deferred foreign income under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). However, Utah provides for a subtraction from federal taxable income of 50% of the dividends that are received or deemed received from a unitary foreign subsidiary that is not included in a combined report
Reporting Information: Section 965 income should be included in the computation of UT taxable income; however, UT taxpayers are afforded an exclusion of 50% of subpart F income.
Additional Information: Utah, a rolling conformity state, allows certain corporate taxpayers to pay in installments the tax owed on deferred foreign income under IRC § 965, as amended by the Tax Cuts and Jobs Act of 2017 (TCJA). However, Utah provides for a subtraction from federal taxable income of 50% of the dividends that are received or deemed received from a unitary foreign subsidiary that is not included in a combined report
VERMONT
Does the State Conform to Federal Guidelines? Yes
Reporting Information: Vermont is in full conformity with the IRC as amended by the TCJA.
Additional Information: Vermont conforms to the IRC as in effect through December 31, 2017, for taxable years beginning on or after January 1, 2017, and thus conforms to the deemed repatriation rules under IRC 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Vermont is in full conformity with the IRC as amended by the TCJA.
Additional Information: Vermont conforms to the IRC as in effect through December 31, 2017, for taxable years beginning on or after January 1, 2017, and thus conforms to the deemed repatriation rules under IRC 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
VIRGINIA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 income should be included in the computation of Virginia taxable income; however, VA taxpayers are afforded a complete exclusion of all Subpart F income.
Additional Information: Virginia conforms to the IRC as it existed on February 9, 2018. Specifically, for tax years beginning after December 31, 2016, and before January 1, 2018, Virginia conforms to provisions of the federal Tax Cuts and Jobs Act of 2017 (TCJA) that affect the computation of federal taxable income of corporations (other than the temporary reduction in the medical expense deduction).
Virginia provides a subtraction modification for any amount included in federal taxable income by virtue of IRC § 951 (Subpart F income), which includes any IRC § 965 inclusions. Thus, Virginia does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
Reporting Information: Section 965 income should be included in the computation of Virginia taxable income; however, VA taxpayers are afforded a complete exclusion of all Subpart F income.
Additional Information: Virginia conforms to the IRC as it existed on February 9, 2018. Specifically, for tax years beginning after December 31, 2016, and before January 1, 2018, Virginia conforms to provisions of the federal Tax Cuts and Jobs Act of 2017 (TCJA) that affect the computation of federal taxable income of corporations (other than the temporary reduction in the medical expense deduction).
Virginia provides a subtraction modification for any amount included in federal taxable income by virtue of IRC § 951 (Subpart F income), which includes any IRC § 965 inclusions. Thus, Virginia does not conform to the federal deemed repatriation rules under IRC § 965, as amended by the TCJA.
WASHINGTON
Washington has no state income tax.
WEST VIRGINIA
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 income should be included in the computation of West Virginia taxable income; however, West Virginia taxpayers are afforded a subtraction for Subpart F income.
Additional Information: West Virginia adopts all amendments made to the IRC after December 31, 2016, but prior to January 1, 2018. However, West Virginia provides a subtraction modification to federal taxable income for the amount included in federal adjusted gross income under IRC § 951, which includes IRC § 965 amounts. Thus, West Virginia does not conform to the deemed repatriation rules under IRC § 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
Reporting Information: Section 965 income should be included in the computation of West Virginia taxable income; however, West Virginia taxpayers are afforded a subtraction for Subpart F income.
Additional Information: West Virginia adopts all amendments made to the IRC after December 31, 2016, but prior to January 1, 2018. However, West Virginia provides a subtraction modification to federal taxable income for the amount included in federal adjusted gross income under IRC § 951, which includes IRC § 965 amounts. Thus, West Virginia does not conform to the deemed repatriation rules under IRC § 965, as amended by the federal Tax Cuts and Jobs Act of 2017 (TCJA).
WISCONSIN
Does the State Conform to Federal Guidelines? No
Reporting Information: Section 965 income should not be included in the calculation of Wisconsin taxable income.
Additional Information: For tax years beginning after December 31, 2016, and before January 1, 2018, Wisconsin does not conform to the changes resulting from the federal Tax Cuts and Jobs Act of 2017 (TCJA) (with exceptions not relevant to this provision) and thus does not conform to the deemed repatriation rules under IRC 965, as amended by the federal TCJA.
For tax years beginning after December 31, 2017, Wisconsin specifically excludes the deemed repatriation rules from its conformity statute and thus, does not conform to IRC § 965, as amended by the federal TCJA.
Notably, Wisconsin specifically decouples from the creation of IRC § 965 (prior to amendments by the federal TCJA) by P.L. 108-357, and requires subpart F income to be deducted from federal taxable income.
Reporting Information: Section 965 income should not be included in the calculation of Wisconsin taxable income.
Additional Information: For tax years beginning after December 31, 2016, and before January 1, 2018, Wisconsin does not conform to the changes resulting from the federal Tax Cuts and Jobs Act of 2017 (TCJA) (with exceptions not relevant to this provision) and thus does not conform to the deemed repatriation rules under IRC 965, as amended by the federal TCJA.
For tax years beginning after December 31, 2017, Wisconsin specifically excludes the deemed repatriation rules from its conformity statute and thus, does not conform to IRC § 965, as amended by the federal TCJA.
Notably, Wisconsin specifically decouples from the creation of IRC § 965 (prior to amendments by the federal TCJA) by P.L. 108-357, and requires subpart F income to be deducted from federal taxable income.
WYOMING
Wyoming has no state income tax.
