The U.S. Department of the Treasury and the Internal Revenue Service issued a notice stating that proposed regulations will be issued addressing the deductibility of state and local tax payments for federal income tax purposes. Notice 2018-54 also informs taxpayers that federal law controls the characterization of the payments for federal income tax purposes regardless of the characterization of the payments under state law.
The Tax Cuts and Jobs Act (TCJA) limited the amount of state and local taxes an individual can deduct in a calendar year to $10,000. In response to this new limitation, some state legislatures have adopted or are considering legislative proposals allowing taxpayers to make payments to specified entities in exchange for a tax credit against state and local taxes owed.
The upcoming proposed regulations, to be issued in the near future, will help taxpayers understand the relationship between federal charitable contribution deductions and the new statutory limitation on the deduction of state and local taxes.
Taxpayers should also be aware the U.S. Department of the Treasury and the Internal Revenue Service are continuing to monitor other legislative proposals being considered to ensure that federal law controls the characterization of deductions for federal income tax filings.
The limitation imposed by the TCJA applies to taxable years beginning after Dec. 31, 2017 and before Jan. 1, 2026.
Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.
How about the dems lower taxes
Dems don’t care about the working class. They will never lower taxes.
The new Governor, a Democrat, is going to raise the gas tax and the sales tax, both affect the middle class. He stated the tax relief will have to wait until next year. You know the history of Democrats next year will come and go without anything being done, just kick the can down the road.
Time for new faces in Trenton.