Treasury Dashes The Charity Workaround For SALT, Limits Tax Credit Programs For Private Schools

As warned earlier, Treasury proposed rules to block a state and local tax (SALT) deduction workaround strategy that had been adopted by New YorkNew Jersey, and Connecticut, and was being considered by several other high-income-tax states.  Under the strategy, taxpayers would be allowed a credit against state taxes for contributions to state- or local-run charitable funds that provided money for public services. The strategy was intended to sidestep the annual $10,000 cap on SALT deductions for federal income tax under the Tax Cuts and Job Act (TCJA). The goal of the workarounds: convert newly non-deductible state tax payments into deductible charitable contributions, which could save state taxpayers money and fund public services. Read More

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