The Vermont Department of Taxes recently posted information on the state’s conformity to the Tax Cuts and Jobs Act on its website. In addition to addressing the state treatment of section 965 income, the guidance confirms that Vermont taxes GILTI and allows corporations the section 250 deduction for both GILTI and FDII. For individual taxpayers, Vermont net income is defined as adjusted gross income with a few adjustments. GILTI income will therefore be included automatically in the starting point. The section 250 deductions are not available to individual Vermont taxpayers. The guidance confirms that Vermont conforms to the 163(j) business interest deduction limitation, which “reduces federal taxable income and flows to Vermont tax.” Finally, because Vermont starts at adjusted gross income for calculation of individual income tax, the IRC section 199A deduction does not affect or reduce Vermont individual income tax liability. Please stay tuned to TWIST for future TCJA-related updates.
To view past weeks of TWIST that you may have missed, please visit our TWIST homepage.
To receive the TWIST e-mail each Monday, make sure that State and Local Tax is checked off as one of your topics of interest on the KPMG Tax subscription site.