"For example, if a state grants a 70 percent state tax credit pursuant to a state tax credit program, and an itemizing taxpayer contributes $1,000 pursuant to that program, the taxpayer receives a $700 state tax credit. A taxpayer who itemizes deductions must reduce the $1,000 federal charitable contribution deduction by the $700 state tax credit, leaving a federal charitable contribution deduction of $300," said the IRS. 

The measure does, however, provide exceptions for dollar-for-dollar deductions and tax credits of no more than 15 percent of the amount transferred, meaning that a taxpayer who receives a state tax deduction of $1,000 for a contribution of $1,000 is not required to reduce the federal charitable contribution deduction to take into account the state tax deduction, and a taxpayer who makes a $1,000 contribution is not required to reduce the $1,000 federal charitable contribution deduction if the state or local tax credit received or expected to be received is no more than $150.

The IRS is also allowing a safe harbor rule in response to concerns that "the proposed regulations would create unfair consequences for certain individuals who receive state or local tax credits in return for payments to section 170(c) entities." 

"These state tax credit programs effectively offer taxpayers a choice of paying tax to the state or local government or making a payment to a section 170(c) entity and receiving a tax credit that offsets the taxpayer’s state or local tax liability," said the IRS. "This situation can be analogized to situations in which a party entitled to receive a payment from a second party directs or permits the second party to satisfy its payment obligation by making a payment to a third party."

So, under the safe harbor rule, someone who makes contribution to a 170(c) entity in exchange for a dollar-for-dollar credit or deduction can treat these contributions as a tax payment, which then count towards the SALT deduction as it is currently constituted. Basically, taxpayers who've been relying on these programs before can still rely on them in the same way, though the applicable deduction must still be within the cap's limits. Those who have already filed may be able to claim a greater SALT deduction by filing an amended return, Form 1040-X, if they have not already claimed the $10,000 maximum amount ($5,000 if married filing separately).

Mark Klein, a speaker at the Foundation for Accounting Education's conference "Impact of the New Tax Law: a Sid Kess Workshop" in January 2018, predicted an outcome like this during his talk. 

"It's difficult to understand how the feds would allow that. ... If you get state income tax [benefits] for every dollar you pay charitable, how voluntary are you? There's serious questions about whether that is a valid deduction, and that you receive no value from it," he said.