Corporate and Individual Income Tax Conformity Updates
Governor Kemp signed H.B. 7EX on Dec. 8, 2021, which updates Georgia’s corporate and individual income tax conformity to the Internal Revenue Code (IRC) of 1986 provided for in federal law enacted on or before March 11, 2021 (previously, Jan. 1, 2021). This is effective for all taxable years beginning on or after Jan. 1, 2021. The enactment of the bill generally adopts certain provisions of the federal American Rescue Plan Act (ARPA) as they relate to the computation of federal adjusted gross income or federal taxable income for corporations that were enacted on or before March 11, 2021. However, under the new state law, all provisions in ARPA that “change or affect in any manner Section 461(l) shall be treated as if they were not in effect.”
Previously, House Bill 265 was signed into law on Feb. 24, 2021, and applied to taxable years beginning on or after Jan. 1, 2020, and before Jan. 1, 2021. However, since the bill was signed before ARPA was signed into law, for taxable years beginning on or after Jan. 1, 2020, and before Jan. 1, 2021, the provisions of ARPA have not been adopted.
The Georgia Department of Revenue has also issued guidance in Income Tax Federal Tax Changes 12/13/2021[1] that discusses the law change and its impact as well as Georgia’s decoupling provisions. Georgia continues to decouple from certain provision of the IRC, as well as provisions under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and federal Tax Cuts and Jobs Act (TJCA) of 2017.
For more information, please reach out to your Windham Brannon tax advisor.
[1] Income Tax Federal Tax Changes | Georgia Department of Revenue
