IRS Blended Tax Rate Guidance for Fiscal Year-end Corporations

OMA Connections Partner, RSM, posted this Tax Alert: “The 21 percent federal corporate tax rate now in effect applies to tax years beginning after Dec. 31, 2017. Previously, the maximum federal corporate tax rate was 35 percent. For a corporation’s fiscal year or companies with tax years that begin before Dec. 31, 2017, but end after that date (an Affected Fiscal Year) – for example, a year beginning Oct. 1, 2017 and ending Sept. 30, 2018, – a blended rate applies.

“The IRS has released Notice 2018-38, explaining how to apply the blended rate under section 15 of the Tax Code, as well as news release IR-2018-99, conveying the basic message that for Affected Fiscal Years, the blended rate applies in lieu of either the new 21 percent rate or the tax rate applicable under old law.”