July 5, 2018

The Bond Buyer: Where SALT Workarounds Are Being Promoted

media mention

he $10,000 federal cap on the deductibility of state and local taxes has led to a flurry of activity in red states to promote tax credits for taxpayers’ efforts to make charitable donations to get around that cap.

That’s the finding of a survey by the Institute for Taxation and Economic Policy that highlights the difficult task the Internal Revenue Service faces in writing updated regulations to cover this part of the new tax law.

“Tax accountants, financial advisors, private schools, and other organizations are advertising tax credits for donating to private K-12 voucher funds as ways to ‘sidestep,’ ‘bypass,’ ‘circumvent,’ or ‘mitigate’ the impact of the federal SALT deduction cap,” said the report. “In Alabama, Arizona, Georgia, Louisiana, and Pennsylvania, these tax credits are being publicly marketed to potential donors as ways to ‘convert’ or ‘exchange’ capped SALT deductions for uncapped and more lucrative charitable deductions.” Read more