Representative Tom Suozzi, D.Y., speaks during a news conference announcing the State and Local Tax (SALT) Caucus outside the U.S. Capitol on April 15, 2021.
Sarah Silbiger | Bloomberg | Getty Images
Three House Democrats are still pushing for relief over the $10,000 limit on federal deductions for state and local taxes, known as SALT.
Reps. Josh Gottheimer, DNJ.; Tom Suozzi, DNY; and Mickey Sherrill, DNJ, on Friday joint letter sent U.S. Department of Treasury Secretary Janet Yellen and IRS Commissioner Charles Rattig, to reverse a 2019 rule blocking state-level SALT relief workarounds.
Enacted by the Tax Cuts and Jobs Act of 2017, the SALT cap created legislation in Connecticut, New Jersey and New York that allowed residents to bypass the limit. These state-level laws allowed property tax credits to be provided to homeowners who contributed to local charitable funds.
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However, the Treasury and the IRS Blocked this strategy in 2019Saying that receiving a SALT credit in exchange for charitable donations would be “quid pro quo”.
“As Americans struggle with rising costs and the continued economic turmoil caused by the COVID-19 pandemic, we encourage you to take immediate action to support nonprofit charities,” the lawmakers wrote.
“Thirty-three states offer tax credits that encourage charitable donations to certain causes, and this rule unnecessarily restricts states’ ability to encourage charitable donations to nonprofits,” he said.
The letter comes after five House Democrats, including Gottheimer, Sherrill and Suozzi, told the House Appropriations Subcommittee on Financial Services and General Government that Deny IRS funds to stop state-level SALT cap workaround,
Given the slim House majority of Democrats, the SALT limit was a key point in the Build Back Better talks. Although in November, House Democrats $80,000 salt cap by 2030 As part of his spending package, Sen. Joe MunchkinDW.Va. blocked the plan in the Senate.