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).