Date Start Date: 1/29/2026 Start Time: 2:00 PM EST End Date: 1/29/2026 Contact Name: Luke Rogers Email
ny taxpayer that has paid Michigan or Pennsylvania corporate income tax as a consequence of applying the federal interest expense limitation under IRC § 163(j) may be entitled to a refund—but the time to claim the benefit is limited. The Michigan Department of Treasury and Pennsylvania Department of Revenue take the position that the IRC § 163(j) limitation applies in calculating their respective corporate income taxes, and that taxpayers must compute the limit on a separate-company basis. This separate-company calculation differs from the consolidated calculation most taxpayers apply on their federal returns, and can be particularly detrimental for taxpayers that borrow externally or manage group financing from a company with limited operations. This is particularly true in Michigan because the state requires combined reporting such that applying the limit on a separate-company basis makes little sense. But, there may be a solution. Join us for a short webinar on Thursday January 29 to hear why Michigan and Pennsylvania are arguably prohibited from applying 163(j)’s interest expense limitation at all. We will also discuss some unusual problems presented by Michigan’s policy of calculating the limit on a separate-company basis, and how to protect your rights to a refund in both states. This is important because the statute of limitations to claim a refund on the basis that the states are prohibited from conforming to the limitation is shorter than the typical refund statute in most states: Michigan has a limited 90-day refund period, meaning that the 2024 tax year closes for calendar-year taxpayers on March 31; Pennsylvania refund claims are due based on the un-extended due date of the return, meaning that the ordinary 3-year refund statute for the 2022 tax year closes for calendar-year taxpayers on May 15. Visit the Website
