About this Course
This course explores the differences between the federal taxable income and state taxable income of a corporation, and it explains how these differences are incorporated into state taxable income calculations that use federal taxable income as the starting point. Conformity to the federal corporate income tax base is important because it eases the administrative burden of computing state taxable income and creates a degree of uniformity in state income tax systems. Despite the broad conformity to the federal tax base, each state has its own unique list of addition and subtraction modifications to federal taxable income. Upon completion of this course, you should be able to: List the common addition modifications to federal taxable income that are required to arrive at state taxable income; List the common subtraction modifications to federal taxable income that are required to calculate state taxable income; Distinguish between the federal and state tax treatment of dividend income; Describe the state income tax treatment of net operating losses; and Describe the expenses targeted by related party addback provisions and the common exceptions to these provisions.