Florida Enacts Legislation to Advance IRC Conformity Date
By: Peter Baisch
Florida corporations are facing a last-minute state tax law change that may impact 2020 income tax liability. On June 29, 2021, Florida Governor Ron DeSantis signed legislation that revised the Internal Revenue Code (“IRC”) conformity date in the Florida Income Tax Code. The Florida Income Tax Code now incorporates federal tax laws in effect as of January 1, 2021. The Florida law amends the Florida Income Tax Code to retroactively adopt the most recent version of the IRC and, at the same time, decouples from certain provisions of the IRC added by the CARES Act and Consolidated Appropriates Act. For example, the Florida law follows the federal corporate income tax treatment of Paycheck Protection Program Loans but decouples from federal treatment of qualified improvement property introduced by the CARES Act.
On August 13, 2021, the Florida Department of Revenue updated its Tax Information Publication (TIP 21C01-01R) which provides guidance on amending returns to incorporate the IRC conformity legislation. Other deductions mentioned in the TIP include interest expense limitations under IRC Sec. 163(j), net operating loss carryovers, and business meal expenses.
To discuss how this law change may impact your corporation’s 2020 income tax liability, please contact your Cherry Bekaert advisor or Peter Baisch, Senior Manager of Cherry Bekaert’s State and Local Tax practice.