TAG Tax

Contact: Jay Laurila

The Tax Cuts and Jobs Act (TCJA), signed into law on December 22, 2017, makes several changes to existing tax laws that affect Regulated Investment Companies (RICs). The big headline items of TCJA include the reduction of the maximum corporate tax rate from 35% to 21%, the repeal of the corporate alternative minimum tax (AMT), and U.S. corporate taxation’s shift from a worldwide tax system to a territorial tax system. While these wholesale changes to the corporate tax system should not have a significant direct impact RICs, as they will continue to have a 100% deduction for dividends paid to shareholders, all of the mentioned changes will indirectly impact RICs due to their investment in the companies that stand to benefit. In addition, it’s just as important to note the many significant provisions that did not make their way into the new law.

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