Florida legislation changes several provisions involving the credit for contributions to nonprofit scholarship funding organizations (SFOs).
In determining corporate income tax liability, Florida requires additions to federal taxable income for both:
- the federal deduction for excess charitable contribution carryover under IRC §170; and
- the credit for SFO contributions.
The law creates an exception to the charitable contribution adjustment if:
- the credit is added to taxable income in a previous tax year; and
- the SFO contribution is claimed as a federal charitable carryover deduction in the current tax year.
An addition is not required for the amount of that federal charitable deduction. The exception is intended to ensure that the credit addback does not result in a duplicate addition in a later tax year.
Under the law, contributions to SFOs must be made by the due date for filing a taxpayer’s Florida corporate income tax return.
Estimated Tax Compliance Requirements
The law clarifies the estimated tax requirements for taxpayers that qualify for a credit after filing a return extension request. The credit does not reduce the amount of the taxpayer’s estimated tax liability.
A taxpayer’s noncompliance with estimated tax requirements will result in the revocation and rescindment of the credit. In addition, the taxpayer will be assessed for any taxes, penalties, or interest resulting from the taxpayer’s noncompliance.
Ch. 2018-6 (H.B. 7055), Laws 2018, effective July 1, 2018