The IRS has issued final regulations on charitable contributions and state and local tax (SALT) credits. The regs require taxpayers to reduce their charitable contribution deductions by the amount of any SALT credits they receive or expect to receive in return. This allows some taxpayers to deduct certain payments as taxes. The IRS also has issued a safe harbor that allows individuals, in some circumstances, to deduct disallowed charitable contributions as state or local taxes. Treasury Decision 9864, available in the June 11 Federal Register, finalizes proposed regs published August 27, 2018.
This is good news for Arizona’s state credit programs like the ones for contributions to Public School Extracurricular Activities, Foster Care Organizations, Qualified Charitable Organizations, and Arizona Private School Tuition Organizations! The safe harbor allowing individuals to deduct the disallowed charitable contribution as state or local tax will eliminate the negative impact some Arizona taxpayers would have experienced under the originally proposed reg.
For more information and a list of some of our recommended Yuma-area, credit-eligible organizations, click here: http://bit.ly/2F2xSrd