August 24, 2018

Proposed IRS Regulations will Limit Charitable Contributions and State Tax Credits, for Payments Made After August 27

By John Bonk, Senior Manager, Tax & Business Services

Related Services Tax & Business, Family Wealth Services, Cost Recovery & Accounting Methods, Tax Return Compliance, State & Local Tax, Corporate Tax, Valuation, Forensic & Litigation Services, Valuation

Proposed IRS Regulations will Limit Charitable Contributions and State Tax Credits, for Payments Made After August 27 Tax & Business

On August 23, the IRS published proposed regulations (REG-112176-18) on the deductibility of state and local tax payments for federal income tax purposes. The regulations provide limits on the deductibility of charitable contributions and state tax credits for all taxpayers. While the aim of the guidance is the individual taxpayer trying to circumvent the limits placed on the state tax deductions in the 2017 Tax Cuts and Jobs Act, the regulations also limit deductions from long standing state programs related to corporations.

The regulations clearly state that the limitations apply to contributions made after August 27, 2018. Therefore, contributions made prior to August 28, 2018 appear not to be limited by the regulation. New York, New Jersey, California, Pennsylvania and other states have proposed or enacted charitable funds for the purpose of circumventing the state tax deduction limit. Taxpayers planning on utilizing the charitable contribution programs of their state who have yet to make a contribution should contact their tax professional.

Please contact your dedicated Marcum professional to address any questions regarding these regulations or any other tax matter.

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John  Bonk

John Bonk

Senior Manager

  • Tax & Business
  • Miami, FL