Perks of Federal Loss Carryback May Be Limited in Certain States

Businesses in certain states that are tapping into the new stimulus law for tax refunds could end up with larger state tax bills.

The stimulus law (Public Law 116-136) lets companies carry back losses generated in the years 2018 through 2020 for up to five years to generate a tax refund. While that’s an appealing perk for companies weathering an economic downturn, the potential benefits could be limited for taxpayers based in states that conformed to a 2017 tax law provision creating a deduction on a new category of taxable foreign income, known as global intangible low-taxed ...