Recently, there have been changes that may eliminate some of the deemed distributions from controlled foreign corporations (CFCs) for U.S. shareholders. As a result, the number of forms and the complexity in completing them is expected to be reduced. Depending on the situation, this may even reduce the amount of state taxes (including Michigan), particularly for taxpayers in states where income flows from federal returns without any credits. Since these changes allow taxpayers to elect tax returns back to 2018, there may be opportunities to file amended returns and secure a tax refund.

These changes also relate to making elections excluding certain income subject to a tax rate greater than 18.9% in a foreign country from the new GILTI deemed tax provisions. Our international affiliate, Moore Doeren Mayhew, further explores taxes on GILTI deemed distributions for US shareholders of a CFC in their latest article.