If a Florida Department of Revenue notice suddenly appeared in your company’s payroll account, you are not alone.
Several startups have recently received the same notice, and at first glance it looks like something may be wrong with the company’s Florida taxes.
In most cases, that is not what the letter means.
The document is Tax Information Publication 26C01-01, issued by the Florida Department of Revenue on July 7, 2026. It explains how Florida will handle several federal tax changes enacted over the past year.
There is no balance due on the notice, no penalty being assessed, and no response requested.
01Why did Florida send this?
Florida corporate income tax starts with federal taxable income. Each year, Florida updates its tax law to determine which version of the Internal Revenue Code it will follow.
For 2026, Florida generally adopted the federal tax code as of January 1, 2026. But it made some significant exceptions.
Florida kept the January 1, 2025 versions of several federal provisions, including:
- Section 174(a), research expenditures
- Section 168(k), bonus depreciation
- Section 163(j), business interest limitations
- Section 179 expensing
- Section 274, certain business expense limitations
Florida also specifically excluded new Sections 174A and 168(n) from its tax code.
For many startups, most of that list will not make a material difference. One item, however, could.
02The biggest issue for startups: R&D
Federal R&D rules changed substantially.
Beginning in 2025, new federal Section 174A generally allows businesses to deduct domestic research and experimental expenditures currently rather than requiring them to capitalize those costs under the prior rules. Software development can fall within these rules as well.
Florida chose not to adopt Section 174A.
That means a startup may have one R&D deduction for its federal return and a different calculation for its Florida return.
For example, suppose a software company incurs significant U.S. engineering and development costs and deducts those costs immediately on its federal return. If the company is also filing a Florida corporate income tax return, it cannot automatically assume the same deduction carries over to Florida.
Instead, its federal taxable income may need to be recomputed using Florida's version of the federal rules.
This does not necessarily mean the startup will owe Florida tax. A company that is still generating losses may continue to have no current Florida tax liability. But its Florida taxable loss and Florida net operating loss carryforward can be different from the federal amount, which matters in future years.
03Bonus depreciation is another difference
Federal law also restored 100% bonus depreciation for many qualifying assets acquired and placed in service after January 19, 2025.
Florida does not simply follow that federal deduction.
The Florida notice explains that bonus depreciation deducted federally for qualifying assets placed in service before January 1, 2027 generally must be added back for Florida purposes. Florida then provides the deduction back over seven years, at one-seventh per year beginning with the year of the addback.
For a typical software startup with relatively little equipment, this may not be a major issue. It can be much more important for companies buying substantial computers, lab equipment, machinery, or other depreciable property.
04Does receiving the notice mean your startup has to file in Florida?
No.
Receiving this publication does not, by itself, establish that your company owes Florida corporate income tax or is required to file a Florida corporate income tax return.
In fact, the Florida Department of Revenue says directly in the notice that the publication is intended to alert taxpayers to Florida tax requirements and does not by its own effect require compliance.
Whether your startup actually has a Florida filing obligation is a separate question based on the company's activities and connection to Florida.
So if this notice was simply forwarded to you through your payroll provider, do not assume that it means another tax return suddenly needs to be filed.
What should founders do with the notice?
If your company already files, or expects to file, a Florida corporate income tax return, send the notice to your tax preparer. The R&D and depreciation differences should be considered when preparing the Florida return. If your company does not currently file a Florida corporate income tax return, the first question is whether it actually has a Florida filing requirement. The notice itself does not create one. And if an affected Florida return was already filed using a different treatment, Florida says an amended Form F-1120X may be required. The Department has also said it will work with taxpayers regarding penalties directly resulting from these changes.
05The bottom line
The Florida letter showing up in startup payroll accounts looks like a tax notice, but it is primarily an informational update.
There is no amount to pay simply because you received it.
For startups that actually file in Florida, however, it highlights an important issue: Florida and federal taxable income may now diverge in areas such as R&D and depreciation.
And for R&D-heavy startups in particular, that difference is worth tracking now rather than discovering it several years later when the company becomes profitable.
This article is general information, not tax or legal advice. The rules are fact-specific, change over time, and depend on details unique to your company. Talk to us about how they apply to your situation.