Westfield, N.J. – On August 23rd, the U.S. Department of Treasury released new rules affirming the federal government’s stance on recent legislative initiatives enacted by states, such as New Jersey, granting donations to local “charitable funds” in lieu of property tax payments in order to receive income tax credit. These laws were in direct response to a $10,000 cap on State and Local Tax (SALT) deductions placed on Federal Income Taxes through the Tax Cuts & Jobs Act of 2017.

“The recent ruling set by the U.S. Department of Treasury affirming the federal government’s position on donations to charitable funds as a means to circumvent the $10,000 SALT deduction cap should not be at all surprising,” said Brian Thomas, Executive Director of Citizens for Accountable Taxation which operates the “Fair Property Taxes for All New Jersey” platform. “Both the IRS & Department of Treasury have long indicated that attempts to workaround last year’s SALT cap would likely not meet federal thresholds.”

According to the newly stated rules, residents who donate to these charitable funds will not be able to receive a full tax credit regardless of the individual states’ laws suggesting otherwise. New Jersey’s law offered a 90% tax credit for donations in lieu of property taxes; however, the Federal Government will not recognize this. Instead, New Jerseyans will only be able to deduct the difference between the amount “donated” and the tax credit which they would receive. For example, if a New Jersey resident “donated” $20,000 to a local charitable fund and received an $18,000 tax credit, they would only be allowed a $2,000 federal SALT deduction.

“Regardless of your stance on SALT and New Jersey’s charitable funds law, we need to focus on combating the root issue here in the State – excessive property taxes. At an average property tax bill of $8,690 per year, New Jerseyans have long been suffering before a cap was implemented and will continue to do so for years to come if nothing is altered, this SALT policy change only goes to further highlight a problem that we know already exists, “said Brian Thomas.

Citizens for Accountable Taxation is a 501c3 non-profit, founded by the organization’s president Sarah Neibart, which seeks to educate and inform residents pertaining to the issue of property taxes through its “Fair Property Taxes for All New Jersey” platform. In addition to building a statewide resource for taxpayers, the campaign’s website provides a forum for policymakers and scholars to share their ideas for fixing the current situation and a hub for connecting people interested in shaping the future of NJ property taxes.

For more information, please visit: www.FairPropertyTaxesForAllNewJersey.com
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