FAQs
States
Why are the interest results in DMI48 for TN and OR different from those computed in other software?
TN and OR have odd rules for the computation of interest,. In the case of OR there is an interest increase if the balance is not paid within 30 days, we default the computations to not include the OR rate bump. In the case of TN the interest rate for an adjustment is set based on the date of assessment. As we have no way of knowing what that date is we use the rate table with all fluctuations, this will level the swings from quarter to quarter for reserve purposes. Please note that custom rate tables can be established via the use of a Base Case in InterestNet. .
Does the system calculate state issues net of federal benefit?
Yes, to enable the calculation of Federal benefit related to state tax and interest as well as Federal interest, enter the appropriate percentages in the Tax Effecting table on the Jurisdiction/Periods screen. The Tax Effect Calculation Report has been added so that you can review the benefit calculations. Make sure to set the overall Tax Effecting Method in the General parameters tab to indicate whether you want the benefit posted to Tax Only or to Tax and Interest.
Does the system have a table that includes state interest rates? If so, does this table get updated with state interest rates the way the federal table gets updated?
Federal and State interest tables are provided with DMI48 and InterestNet. Federal and state interest rate updates will be provided as part of the system updates as they become available. Users can also download interest rate updates directly from this website. Save the .INT file to the your computer, then use the Import feature from Utilities>Interest Rates.
Will there be a way for users to import state tax rates into the FIN48 software instead of having to enter the rate for each jurisdiction and year?
The default state tax rates will be included with an update to the software each year.
We understand that the software has been licensed for federal issues, but how are the other jurisdictional calculations run; simple interest vs. compound? Does the simple interest calculation in DMI48 for states include compound interest for relevant states?
State jurisdictions are computed based on each state’s rules; most use compounded interest. However, there are still some jurisdictions with simple rates (some switch back and forth, i.e., MA). Netting can be performed in DMI48 for States jurisdictions with the use of a Base Case developed in InterestNet, even though there is no state that affirmatively authorizes it.
Does the system have separate interest calculations for state contingencies and how are the rates/details determined?
Separate interest calculations are done for each jurisdiction based on the rates for that jurisdiction.
