The Vermont Department of Taxes recently issued guidance on certain changes to Vermont’s personal income tax laws. In the guidance, the Department also clarifies that GILTI is included in computing Vermont net income for corporations and that the GILTI deduction allowed under IRC section 250 is also available to domestic corporations for Vermont corporate income tax purposes. The guidance did not specifically reference the deduction allowed under section 250 for FDII. The Department will issue additional guidance on the treatment of GILTI in 2019. Beginning in 2018, the new starting point in computing Vermont taxable income for individuals is federal adjusted gross income. As such, the guidance confirms that the new section 199A deduction for qualified business income will not flow through to the Vermont return. Please stay tuned to TWIST for more updates on state responses to federal tax reform.
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