Conformity to GILTI provisions — IRC § 951A inclusion and IRC § 250 deduction
This chart shows whether each state conforms, for corporate income tax purposes, to the federal treatment of global intangible low-taxed income, as introduced by the federal Tax Cuts and Jobs Act (P.L. 115-97, 12/22/2017). This chart considers state conformity to both the GILTI addition (IRC § 951A) and the GILTI deduction (IRC § 250(a)(1)(B)).
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State
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Global intangible low-taxed income (GILTI)
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AK
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Yes.
For purposes of calculating corporate income tax, Alaska begins with taxable income as determined under the IRC, before NOLs and the federal dividends received deduction — generally line 28 of IRS Form 1120. However, Alaska adopts the IRC by reference, including IRC § 951A and IRC § 250, unless modified, and while the deduction provided under IRC § 250 is a special deduction, it is not a dividends-received deduction. Thus, the IRC § 250 deduction would be permitted. Accordingly, while the GILTI addition is included in Alaska taxable income, Alaska corporate taxpayers are also allowed to take the GILTI deduction. Note that Alaska provides a separate subtraction modification for IRC 78 gross-up amount included in federal taxable income.
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AL
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No.
Effective retroactively for tax years beginning after December 31, 2017, all amounts included in income under IRC §951A must be deducted from federal taxable income for purposes of computing taxable income. As to any amount deducted, there must also be added to taxable income all expenses deducted on the taxpayer's return for the tax year that are attributable, directly or indirectly, to the subtracted amount.
The deduction allowed under IRC §250 will apply only to the extent the same income is included in Alabama taxable income.
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AR
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Varies.
For corporations operating only in Arkansas, the starting point for calculating Arkansas corporate income tax is federal gross sales less returns and allowances — as reported on line 1c of the taxpayer's federal corporate income tax return — which does not include the GILTI addition. Accordingly, Arkansas corporate taxpayers operating solely within the state would not adjust Arkansas taxable income for either the GILTI addition or deduction. For a multistate corporation, Arkansas taxable income may be calculated by beginning with federal taxable income, before special deductions, and with certain adjustments. Because no adjustment is provided for the GILTI addition, the GILTI addition would be included in Arkansas taxable income. However, because Arkansas taxable income is calculated without regard to federal special deductions, and no adjustment is otherwise provided for the GILTI deduction, an Arkansas corporate taxpayer may not be entitled to the GILTI deduction.
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AZ
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Yes.
For purposes of calculating corporate income tax, Arizona begins with federal taxable income as determined under the IRC as in effect on January 1, 2019, and thus conforms to either the GILTI addition under IRC 951A(a) or the GILTI deduction under IRC 250. Effective from and after December 31, 2018, GILTI is considered a foreign dividend for Arizona purposes and is subtractable from Arizona gross income in the calculation of Arizona taxable income.
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CA
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No.
For purposes of calculating corporate franchise — income — tax, California begins with taxable income as determined under the IRC as in effect on January 1, 2015, and thus does not conform to either the GILTI addition under IRC § 951A(a) or the GILTI deduction under IRC § 250.
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CO
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No.
A subtraction from federal taxable income is allowed in the amount of any GILTI included in federal taxable income pursuant to IRC § 951A(a) with respect to a controlled foreign corporation that is a C corporation incorporated in a foreign jurisdiction for the purpose of tax avoidance, and as such, is required to be included in a combined Colorado income tax return. The amount of the subtraction is reduced by any amount deducted under IRC § 250(a)(1)(B) with respect to such GILTI. Otherwise, for general purposes of calculating corporate income tax, Colorado begins with taxable income as determined under the IRC as currently in effect, after special deductions. Accordingly, while the GILTI addition is included in Colorado taxable income, Colorado corporate taxpayers are also allowed to take the GILTI deduction. Note that Colorado provides a separate subtraction modification for IRC § 78 gross-up amount included in federal taxable income.
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CT
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No.
Since GILTI is treated in a manner similar to Subpart F income for federal tax purposes, Connecticut treats such income as dividend income but provides a dividend received deduction that fully offsets the dividend income that a corporation receives from foreign corporations to the extent that the income is not otherwise deducted. After a corporation claims the dividends received deduction, it must add back its expenses that relate to its dividend income on its Connecticut return. The addback is equal to 5% of the gross amount of GILTI prior to any corresponding federal deduction, resulting in a net 95% dividends received deduction for GILTI.
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DC
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Yes: GILTI addition
No: GILTI deduction
For purposes of calculating corporation franchise tax, D.C. begins with federal gross income, as determined for the applicable tax year, which is before special deductions. Accordingly, while the GILTI addition is included in D.C. taxable income, D.C. corporate taxpayers may not be able to take the GILTI deduction under current law.
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DE
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Yes.
For purposes of calculating corporate income tax, Delaware begins with taxable income as determined under the IRC as currently in effect, after special deductions. Accordingly, while the GILTI addition is included in Delaware taxable income, Delaware corporate taxpayers are also allowed to take the GILTI deduction. Note that Delaware provides a separate subtraction modification for IRC § 78 gross-up amount included in federal taxable income.
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FL
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Yes.
GILTI is included in the computation of the federal taxable income, which is the starting point for the Florida corporate income tax computation. Florida law provides for a subtraction from federal taxable income for GILTI to the extent that it is not deductible in determining federal taxable income. Note that Florida provides a separate subtraction modification for IRC § 78 gross-up amount included in federal taxable income.
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GA
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No.
GILTI is statutorily excluded from the Georgia corporate income tax base — GILTI is effectively included in state dividend received deduction as subpart F income.
The GILTI deduction is allowed to the extent of any GILTI addition.
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HI
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No.
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, so Hawaii does not conform to the GILTI provisions enacted by the TCJA.
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IA
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No.
For tax years beginning on or after January 1, 2019, global intangible low-tax income (GILTI) under IRC § 951A is excluded from the Iowa corporate income tax base.
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ID
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Yes.
For purposes of calculating corporate income tax, Idaho begins with taxable income as determined under the IRC as in effect as of a certain date, after special deductions.
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IL
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No.
For taxable years ending on or after June 30, 2021, an amount equal to the deduction allowed under IRC § 250(a)(1)(B)(i) for the taxable year is required to be added back to federal taxable income. Before the enactment of the addback, Illinois corporate taxpayers were allowed to take the GILTI deduction.
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IN
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No.
For purposes of calculating corporate income tax, Indiana begins with taxable income as determined under the IRC as in effect on January 1, 2023. However, while the GILTI addition is included in the taxable income of a corporate taxpayer, Indiana has expanded its definition of “foreign source dividends” to include GILTI inclusions and the GILTI deduction is required to be added back in calculating Indiana taxable income. Accordingly, the full amount of the GILTI addition is eligible for Indiana's dividend received deduction.
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KS
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No: GILTI addition
No: GILTI deduction
For purposes of calculating corporate income tax, Kansas begins with taxable income as determined under the IRC as currently in effect, which reflects IRC § 965 amounts. Kansas corporate taxpayers are allowed to take the GILTI deduction. Effective July 1, 2021, and applicable to tax years commencing after December 31, 2020, 100% of GILTI under IRC § 951A before any deductions allowed under IRC § 250(a)(1)(B) are to be subtracted from Kansas gross income. For tax years commencing before January 1, 2021, the GILTI addition is included in Kansas taxable income. For all tax years commencing after December 31, 2020, the amount of any deduction claimed under IRC § 250(a)(1)(B) must be added to federal taxable income. Note that Kansas provides a separate subtraction modification for the IRC § 78 gross-up amount included in federal taxable income.
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KY
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No.
Since GILTI is treated like Subpart F income for federal tax purposes, Kentucky will treat such income as dividend income, which is excluded in calculating gross income for Kentucky income tax purposes. Because GILTI is considered nontaxable income, Kentucky will not allow the Internal Revenue Code Sec. 250 deduction. Any expenses related to GILTI must be added back.
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LA
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Yes: GILTI addition
No: GILTI deduction
Louisiana conforms to the federal GILTI Addition (IRC 951A) but does not conform to the federal GILTI deduction (IRC 250(a)(1)(B). The taxable portion of GILTI income is included in federal taxable income, which is the starting point for Louisiana corporation income tax purposes. Under Louisiana law, dividend income is 100% deductible from Louisiana taxable income, and GILTI is classified as dividend income for Louisiana corporation income tax purposes. The deduction for dividends is reported on CIFT-620, Schedule F, Line 3b; therefore, no portion of the GILTI income is taxable for Louisiana corporation income tax purposes. Accordingly, any deduction taken on the corporation's federal return related to GILTI income is not allowed for Louisiana corporation income tax purposes and will need to be added back on Schedule F of the CIFT-620.
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MA
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Yes.
Applicable to the last taxable year of a taxpayer commencing before January 1, 2018, and to the taxpayer's subsequent taxable years, amounts included in federal gross income pursuant to IRC § 951 and IRC § 951A will be treated as dividends received and included in the definition of “net income.”
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MD
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Yes.
For purposes of calculating corporate income tax, Maryland begins with a corporation's federal taxable income as determined under the IRC as in effect for the applicable tax year, after special deductions reported on Line 29b of federal Form 1120. Because no adjustment is provided for the GILTI addition, the GILTI addition is included in Maryland taxable income. A taxpayer is also entitled to the GILTI deduction, because the GILTI deduction is a special deduction for federal income tax purposes. Note that Maryland provides a separate subtraction modification for IRC § 78 gross-up amount included in federal taxable income.
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ME
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No.
Effective for tax years beginning on or after January 1, 2018, taxpayers are required to add back to taxable income an amount equal to the taxpayer's GILTI income deduction claimed in accordance with IRC § 250(a)(1)(B). They are then allowed a deduction in an amount equal to 50% of the apportionable GILTI income that the taxpayer included in federal gross income during the taxable year in accordance with IRC § 951A, net of related expenses and other related deductions deducted in computing federal taxable income.
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MI
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No.
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. The Michigan Department of Treasury has concluded that, like subpart F income, a CIT taxpayer's GILTI income is subtracted from federal taxable income when determining CIT tax base. Since GILTI is excluded from the CIT tax base “to the extent included in federal taxable income” under Mich. Comp. Laws Ann. § 206.623(2)(d), it is the net amount of a CIT taxpayer's GILTI reflected in its federal taxable income that is deducted when determining CIT tax base. To the extent deducted in arriving at federal taxable income, any deduction under IRC § 250(a)(1)(B) is added back — that is, netted against subtractions.
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MN
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No.
Effective retroactively for tax years beginning after December 31, 2017, taxpayers may subtract from federal taxable income the amount of global intangible low-taxed income included in gross income under IRC § 951A. For taxable years beginning before January 1, 2023, Minnesota required taxpayers to add back to federal taxable income the amount of any special deductions under IRC § 965. Minnesota requires taxpayers to add back to federal taxable income any special deduction allowed under IRC § 250.
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MO
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Yes.
For purposes of calculating corporate income tax, Missouri begins with taxable income as determined under the IRC as currently in effect, after special deductions. Accordingly, while the GILTI addition is included in Missouri taxable income, Missouri corporate taxpayers also are allowed to take the GILTI deduction.
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MS
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Yes: GILTI addition
No: GILTI deduction
For reporting purposes, Mississippi net taxable income may be computed by beginning with federal taxable income, before special deductions, and with certain adjustments. 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. Because no adjustment is provided for the GILTI addition, the GILTI addition would be included in Mississippi taxable income. However, Mississippi considers foreign-sourced income to be nonbusiness income.
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MT
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Yes.
For purposes of calculating corporate income tax, Montana begins with federal taxable income before special deductions. The GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. No state addback is required. Pursuant to Mont. Code Ann. § 15-31-325(4), a corresponding deduction is allowed as a foreign dividend deduction. Specific rules apply to water's edge filers, worldwide filers, and separate company, domestic, or limited combination filers.
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NC
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No.
North Carolina specifically decouples from the GILTI addition under IRC §951A(a) and the GILTI deduction under IRC §250.
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ND
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Varies.
Both the GILTI and the GILTI Deduction are reflected in federal taxable income, which is the starting point for North Dakota taxable income. GILTI is treated the same as other federal deductions for dividends received, and North Dakota requires the federal special deduction for dividend income to be added back to North Dakota taxable income. This results in 100% of the GILTI being tentatively included in North Dakota apportionable income. However, for water's edge filers, North Dakota provides a partial exclusion for amounts included in income under IRC § 951 through IRC § 954 — which includes the GILTI addition under IRC § 951A — because such amounts are considered to be dividends from foreign corporations.
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NE
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Yes.
For purposes of calculating corporate income tax, Nebraska begins with taxable income as determined under the IRC as currently in effect, after special deductions. Accordingly, while the GILTI addition is included in Nebraska taxable income, Nebraska corporate taxpayers are also allowed to take the GILTI deduction.
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NH
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Yes.
A deduction of gross profits as attributable to global intangible low-taxed income (GILTI) under IRC § 951A as determined by IRC § 250(a) is allowed.
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NJ
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Yes: for tax years ending before July 31, 2023
No: for tax years ending on or after July 31, 2023
For tax years ending on or after July 31, 2023, GILTI income is treated as a dividend and may be excluded if the corporation meets the ownership tests for exclusion and the IRC 250 exclusion for GILTI income is no longer permitted. For tax years ending before July 31, 2023, for purposes of calculating corporate income tax, GILTI was included in entire net income and was not treated as a dividend. New Jersey begins with taxable income as determined under the IRC as currently in effect but before special deductions — line 28 of IRS Form 1120. For tax years ending before July 31, 2023, both the income under IRC 951A and the deduction under IRC § 250 are included in entire net income before NOL and dividend exclusion. The IRC § 78 gross up is included in taxable income but is deducted in calculating entire net income before NOL and dividend exclusion. For tax years beginning on and after January 1, 2018, a taxpayer is permitted a deduction for computing entire net income in the amount of the full value of the deduction that the taxpayer was allowed for federal income tax purposes.
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NM
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No.
Effective for taxable years beginning on and after January 1, 2020, New Mexico allows a subtraction modification equal to 100% of the income of the corporation under IRC § 951A after allowing the deduction provided in IRC § 250.
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NV
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N/A
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NY
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Yes.
For purposes of calculating corporate income tax, New York begins with taxable income as determined under the IRC as currently in effect. GILTI is included in New York taxable income, but Article 9-A taxpayers can take the GILTI deduction allowable under IRC § 250(a)(1)(B)(i) to arrive at the net GILTI amount in computing entire net income.
Effective January 1, 2019, New York C corporations can exclude 95% of gross GILTI — before the GILTI deduction. The remaining 5% of gross GILTI is included in the denominator of the apportionment factor only. New York S corporations must include all their GILTI income, also in the denominator only. The definition of GILTI was recently changed to mean “the amount required to be included in the taxpayer's federal gross income pursuant to subsection (a) of section 951A of the Internal Revenue Code.” The law no longer permits the IRC § 250(a)(1)(B)(i) deduction.
IRC § 78 dividends from GILTI are not included in an Article 9-A taxpayer's entire net income.
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OH
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N/A
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OK
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Yes.
For purposes of calculating corporate income tax, Oklahoma begins with taxable income as determined under the IRC as currently in effect, but before special deductions — line 28 of IRS Form 1120. Oklahoma then provides a line-item deduction for special deductions shown on line 29b of IRS Form 1120, which includes the GILTI deduction. Accordingly, while the GILTI addition is included in Oklahoma taxable income, Oklahoma also allows taxpayers to take the GILTI deduction.
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OR
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Yes: GILTI addition
In part: GILTI deduction
For purposes of calculating corporate income tax, Oregon begins with taxable income as determined under the IRC as currently in effect, but before special deductions. Accordingly, the GILTI addition is included in Oregon taxable income. Oregon does not allow taxpayers to take the GILTI deduction pursuant to IRC §250. Oregon does provide a subtraction modification for any IRC §78 gross up — which comprises part of the GILTI deduction — so the deduction is allowed in part.
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PA
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Yes: GILTI addition
In part: GILTI deduction
For purposes of calculating corporate income tax, Pennsylvania begins with federal taxable income as determined by the IRC before special deductions. Accordingly, while the GILTI addition is included in Pennsylvania taxable income, Pennsylvania does not currently allow corporate taxpayers to take federal GILTI deduction, but will allow a dividends received deduction with respect to GILTI.
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RI
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Yes.
For purposes of calculating corporate income tax, Rhode Island begins with taxable income as determined under the IRC as currently in effect, but before special deductions — line 28 of IRS Form 1120. Rhode Island then provides a line-item deduction for special deductions shown on IRS Form 1120, Schedule C, line 20, which includes the GILTI deduction. Accordingly, while the GILTI addition is included in Rhode Island taxable income, Rhode Island also allows taxpayers to take the GILTI deduction. Note that Rhode Island provides a separate subtraction modification for IRC § 78 gross-up amount included in federal taxable income.
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SC
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No.
South Carolina does not conform to either the GILTI addition under IRC§ 951A(a) or the GILTI deduction under IRC § 250. South Carolina specifically decouples from IRC § 944 through IRC § 989, relating to the taxation of foreign income.
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SD
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N/A
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TN
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No.
The treatment of GILTI income is as follows: (1) any amount included in federal taxable income for global intangible low-tax income under IRC § 951A is deductible from net earnings and losses, and (2) 5% of the amount included in federal taxable income for global intangible low-tax income under IRC § 951A before the IRC § 250 deduction must be reported as an addition to net earnings and losses.
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TX
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No.
The starting point for determining net taxable margin for Texas franchise tax purposes is federal gross income as determined under the IRC in effect on January 1, 2007. Therefore, Texas does not conform to either the GILTI addition or GILTI deduction.
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UT
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Yes: GILTI addition
Yes: GILTI deduction
For purposes of calculating corporate income tax, Utah begins with taxable income as determined under the IRC as currently in effect, but before “special deductions.” Utah does not conform to the federal treatment that allows for the GILTI deduction. However, Utah does allow a 50% deduction for dividends received or considered to be received from a subsidiary that is organized or incorporated outside of the United States that is a member of the unitary group, that are included in federal taxable income under IRC § 965(a) or IRC § 951A.
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VA
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Yes.
For purposes of calculating corporate income tax, Virginia begins with taxable income as determined under the IRC as amended, after special deductions. While the GILTI addition is included in Virginia taxable income, Virginia corporate taxpayers are also allowed to take the GILTI deduction. Virginia provides a separate subtraction modification for IRC § 78 gross-up amount included in federal taxable income.
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VT
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N/A
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WA
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N/A
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WI
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No.
Wisconsin passed legislation that updated the state's IRC conformity date but specifically decouples the state from the GILTI tax regime — including both the GILTI addition and GILTI deduction.
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WV
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Yes.
For purposes of calculating corporation net income tax, West Virginia begins with taxable income as determined under the IRC, including all amendments made prior to January 1, 2022, after special deductions. Accordingly, while the GILTI addition is included in West Virginia taxable income, West Virginia corporate taxpayers are also allowed to take the GILTI deduction. Note that West Virginia provides a separate subtraction modification for the IRC § 78 gross-up amount included in federal taxable income.
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WY
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N/A
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