NJ Governor Murphy Approves SALT-cap Workaround

As you may know, the recent Federal income tax amendments reduced the ability of individuals to deduct State and Local Taxes (“SALT”) to no more than $10,000. This increased the tax burden on NJ taxpayers with more than $10,000 in SALT deductions for Federal purposes.

The NJ legislature recently passed, and the Governor has signed, a bill that permits owners of certain businesses taxed as partnerships to receive a credit for the SALT incurred by their businesses. In theory, this would have the SALT classified as a permitted business expense. The rationale is a bit complicated and we don’t know yet whether the IRS will challenge this workaround – as they have some others.

See the attached article from NJBiz. https://ow.ly/mFlp30qa2Aw

 Feel free to contact my office with any questions. (844-256-5891)