A SALT Cap Workaround That Works? Notice 2020-75
Author: Erik M. Jensen.
Source: Volume 38, Number 02, Winter 2021 , pp.75-83(9)
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Abstract:
In November 2020 the Treasury and the IRS issued Notice 2020-75 announcing that proposed regulations will be issued governing the treatment of new state laws that impose income taxes on what are passthrough entities for federal income tax purposes. Those laws are clearly intended to provide a way to circumvent the cap on the deductibility of state and local taxes (SALT) included in the Tax Cuts and Jobs Act of 2017, and the Notice is very taxpayer friendly in its understanding of these arrangements. This article considers the particulars and the implications of the Notice.Keywords: Notice 2020-75, state and local tax, SALT deduction cap, IRC Sec. 164
Affiliations:
1: Case Western Reserve University School of Law.