United States

Connecticut: Deadline Approaching for Filing Statement of Net Deferred Tax Liability Deduction

Jun 19, 2017
From KPMG TaxWatch

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Under Connecticut law, if the adoption of combined reporting, which became effective for tax years beginning on or after January 1, 2016, results in an aggregate increase in a combined group’s deferred tax liability, or an aggregate decrease to a group’s deferred tax assets, or an aggregate change from a net deferred tax asset to a net deferred tax liability, the combined group is entitled to a deduction against net income to offset the financial statement impact. Publicly traded companies must file Form CT-DTLD (Statement of Net Deferred Tax Liability Deduction) on or before July 3, 2017 to preserve the right to take deduction. Companies that fail to file the statement will lose the right to take the net deferred tax liability deduction. Once preserved, the deduction will be taken over a seven-year period beginning with the combined group’s income year that commences in 2018. Each year, the taxpayer will be able to deduct an amount equal to one-seventh of the amount necessary to offset the increase in the net deferred tax liability or decrease in the net deferred tax assets, or the aggregate change thereof from a net deferred tax asset to a net deferred tax liability. Note that any deductions not claimed in the seven year period may be carried forward indefinitely. Please contact Steve Kralik at 860-297-5431 with questions. 

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.