A majority of the reform included in The Tax Cut and Jobs act of 2017 won’t be seen by taxpayers and corporations until filing of 2018 returns begin. One major exception to that is the “transition tax” for repatriated earnings, which applies to U.S. corporations and individuals who own at least 10 percent of the voting shares of a foreign corporation.
Those who qualify must take into current income, for 2017, their pro rata share of the previously untaxed earnings and profit (E&P) of the foreign corporation. The untaxed E&P would be subject to reduced tax rates at two distinct levels. E&P held in the form of cash or cash equivalents would be subject to a 15.5 percent tax rate, while other E&P would be taxed at 8 percent.
Due to the large affect this may have on taxpayers the transition tax liability may be paid in installments over an 8-year period, with the first installment coming due during the 2017 tax year.