Gov. Cuomo Lays Out 30-Day Budget Amendments, Includes SALT Fixes
through a set of 30-day budget amendments
legislature
"The FY 2019 Budget protects New Yorkers against attacks from Washington and helps further our bold, progressive agenda to move New York forward," Governor Cuomo said. "After working with experts and stakeholders, I am advancing further reforms through these budget amendments that to safeguard our competitiveness and help protect residents from this federal economic assault."
The New York Business Journal said small businesses so far have been skeptical of this plan, with many owners saying they already received hefty tax breaks through the federal reforms, and so why would they change their tax structure to do something that has no direct benefit for them?
Mark Klein, a speaker at the Foundation for Accounting Education's conference "Impact of the New Tax Law: a Sid Kess Workshop" on Jan. 31, was similarly skeptical as to whether either a payroll tax or a charitable fund could function as an effective workaround to the SALT deduction cap. Klein said that this measure isn't as simple as it might seem, as it might in fact even further increase taxes for some people, such as out-of-state workers. Further, by definition, the payroll tax would only be applicable to those on a payroll, which leaves out things like self-employment income or capital gains, both of which also represent a significant portion of revenue for the state. This means that the workaround would not cover as many people as an unlimited SALT deduction. Klein also felt that it is extremely unlikely that a charitable fund would work, since it flies in the face of many of the rules surrounding what counts as a charitable contribution. In general, for a charitable contribution to be eligible for a deduction, the taxpayer cannot receive value from it; otherwise it's more of a transaction.
Tax Cut and Jobs Act (TCJA) Ad Hoc Committee
Mark Klein, a speaker at the Foundation for Accounting Education's conference "Impact of the New Tax Law: a Sid Kess Workshop" on Jan. 31, was similarly skeptical as to whether either a payroll tax or a charitable fund could function as an effective workaround to the SALT deduction cap. Klein said that this measure isn't as simple as it might seem, as it might in fact even further increase taxes for some people, such as out-of-state workers. Further, by definition, the payroll tax would only be applicable to those on a payroll, which leaves out things like self-employment income or capital gains, both of which also represent a significant portion of revenue for the state. This means that the workaround would not cover as many people as an unlimited SALT deduction. Klein also felt that it is extremely unlikely that a charitable fund would work, since it flies in the face of many of the rules surrounding what counts as a charitable contribution. In general, for a charitable contribution to be eligible for a deduction, the taxpayer cannot receive value from it; otherwise it's more of a transaction.