Interested in training for your team? Click here to learn more

Section 163(j) and the CARES Act: Special Partnership Rules, International Tax and U.S. State Tax Implications

Recording of a 90-minute premium CLE/CPE webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, June 25, 2020

Recorded event now available

or call 1-800-926-7926

This CLE/CPE course will provide tax professionals a critical analysis of the recent changes made to Section 163(j) under the CARES Act. The panel will discuss new special partnership rules and the impact of the revisions to Section 163(j) under the CARES Act on international and U.S. state taxes. The panel will also offer effective tax planning techniques for pass-through entities in light of the CARES Act and provisions of Section 163(j).


The CARES Act amended Section 163(j) of the Internal Revenue Code, significantly impacting taxpayers, partnerships, and international transactions. Tax professionals must understand critical tax rules and calculations for purposes of the business interest expense limitation and implement effective planning methods for taxpayers.

Under the 2017 tax reform bill, Section 163(j) placed limits on the deductibility of interest in a variety of situations, creating significant tax consequences for many partnerships. The recently amended Section 163(j) under the CARES Act allows taxpayers to deduct more business interest expense for the 2019 and 2020 tax years by increasing the adjusted taxable income (ATI) from 30% to 50% and allowing the carryback of net operating losses (NOLs) up to five years. Tax advisers to partnerships need a clear understanding of the impact of the amended rules on partners and to avoid unanticipated tax costs.

Amendments to Section 163(j) by the CARES Act impact both international and state tax planning and reporting. The ability to elect out of the increase in the ATI limitation or not elect to use 2019 ATI for the 2020 year, requires careful consideration for taxpayers for purposes of the base erosion and anti-abuse tax (BEAT) and the interaction of the NOL rules and current international tax laws. The new rules may also cause state tax issues for taxpayers in states that conform to the IRC in effect on a specific date.

Listen as our panel discusses new special partnership rules and the impact of the changes to Section 163(j) under the CARES Act on international and U.S. state taxes.



  1. Section 163(j) overview, CARES Act changes to Section 163(j)
  2. Special partnership rules
  3. International tax impact
  4. State tax impact


The panel will review these and other key issues:

  • The impact of the CARES Act on Section 163(j)
  • Critical provisions of Rev. Proc. 2020-22
  • Increase of ATI limitation for partnerships
  • Using pre-CARES Act Section 163(j) rules in the context of the BEAT
  • Potential compliance issues based on state conformity
  • Specific exceptions to the application of new Section 163(j)
  • How to calculate ATI for purposes of determining deduction limitations


Howlett, Andrew
Andrew L. Howlett

Miller & Chevalier

Mr. Howlett practices in the area of federal income tax with an emphasis on tax planning, tax-related...  |  Read More

Kaufman, Charles
Charles Kaufman
Managing Director

Mr. Kaufman’s practice includes advising clients regarding transactions involving the taxation of partnerships,...  |  Read More

Wilhelmson, Bradley
Bradley R. Wilhelmson

Managing Director

Mr. Wilhelmson practices in the firm’s State and Local Tax (SALT) practice and serves as a dedicated resource for...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video