Oroho: Proposed IRS Regulations Highlight Need to Cut Cost of NJ Government
| Oroho: Proposed IRS Regulations Highlight Need to Cut Cost of NJ Government
IRS Clarifies that Charitable Contributions to Sidestep $10k SALT Limit Are Not Deductible Senator Steven Oroho said that a regulation proposed by the Internal Revenue Service that would derail an attempt to sidestep the recently enacted $10,000 cap on the federal deduction for state and local taxes highlights the need to advance major reforms to lower the cost of government in New Jersey. Sen. Steven Oroho said that a proposed IRS regulation highlights the need to advance major reforms to lower the cost of government in New Jersey. (SenateNJ.com) “I appreciate the legislative attempt to preserve the value of tax deductions for New Jersey residents following the limitation of the federal SALT deduction,” said Oroho (R-Sussex). “Unfortunately, the IRS is now taking the action it promised to take to prevent efforts to sidestep the new SALT limit. It’s clear that the best way we can help New Jersey taxpayers is to directly lower the cost of government in the Garden State.” Federal tax reforms enacted in 2017 limited the SALT deduction to $10,000, while allowing charitable contributions to remain fully deductible. To prevent New Jerseyans from losing a major federal tax deduction, a state law was enacted allowing taxpayers to shift property tax payments to new local charities that support government functions in exchange for offsetting tax credits. The proposed IRS regulations, however, clarify that the federal income tax deduction for a charitable contribution will be reduced by the value of a state or local tax credit that a taxpayer receives in return for making the contribution. “The SALT deduction was always a band-aid that covered up the underlying problem of overly expensive government in New Jersey,” added Oroho. “It’s imperative that we attack the problem at its source, which is exactly what the cost-saving recommendations of the Economic & Fiscal Policy Workgroup seek to do. We put forward a real plan to provide billions in tax relief to New Jerseyans. Now that the IRS position on charitable contributions is clear, we have no excuse to delay action on these reforms.” Oroho is a member of the Senate Budget & Appropriations Committee and co-chair of the Economic & Fiscal Policy Workgroup. Related Facebook Post: Related Tweet: Website Post: |
