DC Response – State Conformity With Federal Changes

We are still working on many of the changes from the federal tax reform. Here are our thoughts (in bold) on the questions, these may change with future legislation.

Disaster Tax Relief – I would think we conform to these under 47-1803.03(b) – there is no guidance on what the District did for previous hurricanes.

  • Qualified Hurricane casualty loss deductions – For federal purposes a qualified hurricane disaster casualty loss is calculated as the loss less $500. The the 10% AGI limit does not apply to these casualty losses. The deductible loss can be taken as either an itemized deduction or an increase in the taxpayer’s standard deduction.
  • Qualified retirement plan distributions for individuals that were in a Hurricane disaster area are not subject to early withdrawal penalty and may be taxed over a three year period.
  • Charitable contributions for hurricane relief are not subject to the overall limit on itemized deductions or the 50% AGI limit.

Itemized DeductionsMedical deduction threshold of 7.5%  (Was supposed to be 10% for all taxpayers before the Tax Cuts and Jobs Act was passed). We conform to these under 47-1803.03(b)

Bonus Depreciation – We do not conform to bonus depreciation – D.C. Code Ann. § 47-1803.03(a)(7)

  • If your state allows bonus depreciation will you allow the 100% bonus depreciation percentage for qualified assets (both new and used) placed in service after September 27, 2017?
  • If you will allow for 100% bonus depreciation will you allow a taxpayer to elect to use a 50% bonus rate for assets placed in service between September 28, 2017 and December 31, 2017?
  • If you allow bonus depreciation will you allow the new 100% rate for qualified film, TV and theatrical production assets?

Does your state require the legislature to meet in order to conform with any federal changes signed into law during the year? If so when will they meet – No, the District has a rolling conformity to the Code – D.C. Code Ann. § 47-1801.04(28)