United States

New Jersey: Guidance Issued on State Treatment of Amounts Deemed Repatriated Under IRC Section 965

Mar 26, 2018
From KPMG TaxWatch

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The New Jersey Division of Taxation recently issued a notice addressing the state’s treatment of amounts deemed repatriated under IRC section 965. The notice confirms that for New Jersey Corporation Business Tax purposes, the deemed repatriation dividends will be excluded from entire net income, as provided under N.J.S.A. 54:10A-4(k) (5). This statute allows a 100 percent exclusion for dividends received from 80 percent or more owned subsidiaries. A 50 percent exclusion applies if the dividends are received from 50 percent or more owned subsidiaries. If a corporation does not meet the ownership thresholds, the deemed repatriation dividends will be included in entire net income. The notice also provides that for New Jersey Gross Income Tax purposes, dividends are an enumerated category of income. Thus, deemed repatriation dividends reported under IRC section 965 must be included in New Jersey gross income in the same tax year and in the same amount as reported for federal purposes. Please contact Jim Venere at 973-912-6349 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.