Tax Law and News Changes Now in Effect for Blended Corporate Federal Income Tax Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Intuit Accountants Team Published Apr 27, 2018 1 min read Due to a provision in the Tax Cuts and Jobs Act, a corporation with a fiscal year that includes Jan. 1, 2018, will pay federal income tax using a blended tax rate and not the flat 21 percent tax rate under the Act that would generally apply to taxable years beginning after Dec. 31, 2017. Many U.S. corporations elect to use a fiscal year end and not a calendar year end for federal income tax reporting purposes. Corporations determine their federal income tax for fiscal years that include Jan. 1, 2018, by first calculating their tax for the entire taxable year using the tax rates in effect prior to the Act and then calculating their tax using the new 21 percent rate, subsequently proportioning each tax amount based on the number of days in the taxable year when the different rates were in effect. The sum of these two amounts is the corporation’s federal income tax for the fiscal year. The blended rate applies to all fiscal year corporations whose fiscal year includes Jan. 1, 2018. Fiscal year corporations that have already filed their federal income tax returns that do not reflect the blended rate may want to consider filing an amended return. The federal sequester law remains in effect for the 2018 federal fiscal year. Corporations need to be aware of how this may affect their tax credits and refunds. Revised forms and instructions can be found on IRS.gov. Visit the Intuit® ProConnect™ Tax Reform Resource Center for continuous updates and review our articles on tax reform on the Tax Pro Center. Previous Post How to Prepare Taxes for DACA Recipients Next Post May 2018 Tax and Compliance Deadlines Written by Intuit Accountants Team The Intuit® Accountants team provides ProConnect™ Tax, Lacerte® Tax, ProSeries® Tax, and add-on software and services to enable workflow for its customers. Visit us at https://proconnect.intuit.com, or follow us on Twitter @IntuitAccts. More from Intuit Accountants Team Comments are closed. Browse Related Articles Practice Management Cloud automation drives results for Three Peaks Tax Law and News Tax relief for victims of Hurricane Ernesto Advisory Services La función de un contador en la planificación de la s… Advisory Services Preparing your clients’ children for inheritance Practice Management New Education Resource Center is now live! Practice Management Accountant spotlight: Nick Boscia, CPA, EA Webinars ProConnect: Setup/Firm Admin: Sept. 17 Webinars Power of the Intuit Platform: Sept. 11 Webinars Energy/Clean Vehicle Credits: Sept. 26 Webinars Simple 1040s in ProSeries: Sept. 23