Volume 5 No 3    |    Read Article

By Nina Krauthamer, Elizabeth V. Zanet, and Sheryl Shah

When the T.C.J.A. capped the deduction for state and local income and property taxes at $10,000 – more tax can be paid, but only $10,000 can be deducted – state governments did not take the provision lightly. One proposal that has gained traction in Albany and other state capitals involves creating charitable funds that would raise voluntary capital for specific governmental purposes. The goal is for taxpayers to claim the charitable contributions as a deduction for Federal tax purposes and, at the same time, benefitting from a substantial credit against their state income tax liabilities. Another, less contentious proposal would utilize employer-side payroll taxes to offer employees a credit against state and local taxes. Nina Krauthamer, Elizabeth V. Zanet, and Sheryl Shah assess the viability of these proposals and the likely impact of tax reform on New York State. Opinions are not consistent. Stay tuned.    See more →