Federal Government Plans to Limit SALT Workarounds

June 12th, 2018

Last Wednesday, Treasury Department and IRS said that they plan to propose regulations addressing the federal income tax treatment of certain payments that allow taxpayers to claim a federal credit against their state and local taxes, according to a notice from the agencies.

This year’s state budget included a new, option payroll tax and a charitable contribution program in a bid to get around the federal tax code changes that limit state and local tax deductions.

The IRS seems to be warning taxpayers they could be in trouble if they rely on new state laws to take a federal deduction to which they are not entitled.

Gov. Cuomo said “The IRS should not be used as a political weapon, and I urge this administration to stop its partisan assault on New Yorkers and instead work with us to deliver real, lasting relief for hardworking families.”