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Federal GILTI Adjustments for Corporations
Income Tax Guidance on Global Intangible Low-Taxed Income GILTI For Corporations, Individuals, Trusts, and Estates
Federal GILTI Adjustments for Corporations
In addition to determining the amount of GILTI in gross income, a corporate taxpayer may make two adjustments. First, for some taxpayers, IRC 78 “grosses up” income by treating as a dividend certain foreign taxes deemed paid, including taxes attributable to GILTI.6 Second, IRC 250(a)(1)(B) allows a 50% deduction of GILTI and the IRC 78 gross-up attributable to GILTI.7
Example 1: Assume a corporation is subject to IRC 78 gross-up and is deemed to have paid foreign tax of $10 on $90 of GILTI included in gross income.
GILTI for Corporations
GILTI under IRC 951A: $90.00
Plus: IRC 78 gross-up attributable to GILTI: 10.00
Less: IRC 250(a)(1)(B) deduction of 50%: (50.00)
GILTI included in FTI: $50.00
6IRC 78, IRC 960.
7The 50% deduction is reduced to 37.5% for taxable years beginning after 2025. IRC 250(a)(3)(B).