Tax Reform and Non-Profits

SALT Workaround Legislation Clears State Senate

Updated February 26, 2018

Legislation designed to mitigate the impact of the federal tax law on New Jersey property owners has been advancing in Trenton.  S-1893 (Sarlo/Sweeney) was introduced and reported out of the New Jersey Senate Budget and Appropriations Committee on February 15, and passed the state Senate by a vote of 28-9 on February 26. It now moves to the Assembly where an Assembly companion bill, A-3499, is awaiting formal introduction and committee referral.

The new federal tax law which took effect January 1, 2018, caps federal deductibility of state and local taxes (SALT) to $10,000, an amount lower than many New Jersey taxpayers have actually claimed in prior years. S-1893 would allow taxpayers to offset their property tax bills by “donating” to specific charitable funds created by municipalities or school districts. The basic premise is that since the charitable giving tax deduction is not capped under the new tax law, taxpayers who itemize deductions on their federal returns would be able to circumvent the $10,000 SALT limits.

Read our analysis of S-1893 and watch this page and our social media feeds for additional updates.


[Related: More background about the new tax law and New Jersey Non-Profits]


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