
September 2018
Can states issue tax credits through taxpayers’ charitable contributions to offset new state and local tax (SALT) limitations under tax reform? Several states have been creative in finding ways to work around the new limitation. Specifically, the question is whether the individual taxpayer can make a charitable contribution, which is fully deductible on their individual income tax return, in exchange for a credit generally on their real estate tax bill. Several states intended this as a means to work around the state and local tax limitation that was part of tax reform enacted in December 2017.