McDermott hosted its last Tax in the City® women’s tax roundtable of the year in its Chicago office on December 14, 2017.

The Chicago Year-In-Review event featured a CLE/CPE presentation, “Key Provisions of International Tax Reform,” by Britt Haxton, Kristen Hazel and Sandra McGill, followed by a roundtable discussion on interest expense limitations, changes to net operating loss provisions, pass through tax rates and effects of tax reform on benefits.

Additionally, Catherine Battin, Mary Kay Martire and Jane May discussed the SALT perspective on the international tax reform provisions.  A summary of key Illinois income tax changes is below, and a thorough explanation of the new SALT implications in the tax reform bills can be found here.

SUMMARY OF KEY ILLINOIS INCOME TAX CHANGES

  • Mid-Year Rate Increase Effective July 1, 2017
    • From 5.25% to 7% for corporations
    • From 3.75% to 4.95% for individuals, trusts and estates
    • Statute contains guidance on how to allocate income for 2017
    • Default Rule: prorate based on days in period (35 ILCS 5/202.5(a))
    • Alternate Rule: elect to determine net income on a specific accounting basis (35 ILCS 5/202.5(b))
    • Exemptions must be evenly distributed (35 ILCS 5/202.5(c))
    • No negative net income in a single period (35 ILCS 5/202.5(c))
  • Elimination of Non-Combination Rule
    • For tax years beginning on and after 12/31/17
    • Proposed regulation expected any day
    • Use of Sub-Schedule UB for computation of income to be combined between groups with different apportionment methods (insurance companies, financial organizations, transportation companies)
  • Expanded Definition of United States
    • Unitary business group = 50 states, DC and “any area over which the USA has asserted jurisdiction or claimed exclusive rights with respect to exploration for or exploitation of natural resources”
    • Not any US territory or possession
  • Decoupled from Domestic Production Activities Deduction
  • R&D Credit Restored Retroactively to 2016 and Reliance Protected
    • Credit had expired on 1/1/16
  • Income Cap on Individual Taxpayer Eligibility for Certain Exemptions and Credits
    • No standard exemption, tax credit for residential real property taxes or education expense credit for taxpayers with AGI greater than $500,000 (joint filers) or $250,000 (all others)
    • Effective for years beginning on or after 1/1/17

We look forward to hosting Tax in the City® events in Chicago, Dallas, New York and Seattle in 2018! Email mdubinets@mwe.com  to receive invitations to our Tax in the City® events.

We invite all tax professionals who identify as female to join Tax in the City®’s official LinkedIn group to continue the conversation and share tax developments in between events and meetings! Click here to join.

McDermott established Tax in the City® in 2014 as a discussion and networking group for women in tax that facilitates in-person connections and roundtable study group events around the country.