State Addbacks and Subtractions: Managing Rolling, Fixed Date, and Selective Federal Conformity

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, May 5, 2022

Recorded event now available

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Course Materials

This webinar will detail the most frequent and recent additions and subtractions imposed by states when calculating taxable business income. Our panel of state and local tax experts will give examples of these required adjustments in specific states so that SALT advisers are aware of these when calculating and preparing multistate tax returns.

Description

States vary in their acceptance of federal provisions of the IRC. Some use rolling conformity and mirror federal guidelines to limit compliance issues and costs. Others use a fixed date approach and comply with new federal rules as of a specific date. All states adopt their own unique rules, and none conform fully with federal legislation. Most states do, however, use federal taxable income as a starting point and incorporate addbacks and subtractions to arrive at state taxable income.

Decoupling is the practice of adopting the overall federal provisions with the exception of certain items which are eliminated. 168(k) bonus depreciation has been a historically popular addition for states to decouple. The plethora of recent tax acts has left SALT professionals with even more addbacks and subtractions to consider on state returns. States have only recently decided to what degree they will allow recent tax additions and changes, including the 199A deduction, accelerated depreciation, net operating loss deductions, and interest expense deductions under 163(j).

Listen as our authoritative SALT panel discusses the most common addbacks and subtractions states require to calculate state taxable income and best practices for handling and tracking these adjustments.

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Outline

  1. Nexus
  2. How is state income tax calculated
  3. Why do states require such addbacks and subtractions
  4. Most common addbacks and subtractions
  5. Detail addback and subtractions for various states
  6. Separate or combined filings
  7. Audit issues

Benefits

The panel will cover these and other key issues:

  • Tracking depreciation differences in multiple states
  • Handling state adjustments for Section 163(j) interest expense deductions
  • What are the most common state additions and subtractions that SALT practitioners should be aware of?
  • What methods do states use for calculating state taxable income?

Faculty

Rendziperis, George
George W. Rendziperis, JD
Principal, SALT
REDW

Mr. Rendziperis represents taxpayers in matters involving state income, franchise, gross receipts, sales and use,...  |  Read More

Schenk, Jeanna
Jeanna Schenk, CPA, MST
SALT Manager
REDW

Ms. Schenk has been in tax for 10 years, worked in Big 4 and mid-size public accounting firms (KPMG, Moss Adams) and...  |  Read More

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