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S-Corporation SALT

Baker Donelson

SALT Select Developments - February 2024

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State and local taxes impact almost every taxpayer, and developments in any one jurisdiction can be frequent and sometimes confusing. ln this newsletter edition, we will briefly summarize selected state and local tax (SALT)...more

Kohrman Jackson & Krantz LLP

Maximizing Tax Benefits: Exploring SALT Cap Workarounds

Recently, the Wall Street Journal published an article entitled “The SALT Cap Has a $20 Billion Hole.” The premise of the article was that the projections of the additional revenue that would be received by limiting the SALT...more

Miles & Stockbridge P.C.

Maryland Updates Pass-Through Entity Election Requirements

The Maryland Comptroller’s Office issued a Tax Alert on April 11, 2023 addressing policy and procedural changes to pass-through entity (PTE) filings and payments. For tax years beginning after Dec. 31, 2022, PTEs are required...more

Kohrman Jackson & Krantz LLP

Ohio Enacts New Elective Pass-Through Entity Tax

Last month, Governor Mike DeWine signed Senate Bill 246, authorizing Ohio pass-through entities (PTE), including S corporations, partnerships and limited liability companies taxed for federal income tax purposes as...more

Alston & Bird

PTET Elections: Don’t Let Them “Pass” By Unnoticed in M&A Transactions

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The potential complexities surrounding pass-through entity tax elections might make you cry, but the potential tax benefits won’t make you blue. Our Federal Tax Group examines how PTET elections have become an important...more

Williams Mullen

Tax Planning Opportunity for Owners of Pass-Through Entities: Virginia Enacts Workaround to $10,000 Federal Income Tax Limitation...

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Virginia recently enacted legislation that provides an opportunity for the owners of a qualified pass-through entity (PTE) to reduce their federal income tax liability if the PTE makes an election to pay Virginia taxes at the...more

Mitchell, Williams, Selig, Gates & Woodyard,...

Arkansas's Answer to the SALT Cap for Business Owners: The Arkansas Pass-Through Entity Tax Act

The Tax Cuts and Jobs Act of 2017 (The “TCJA”) imposes a $10,000 cap on the amount an individual may deduct for federal tax purposes for the payment of state and local income, property and sales taxes (referred to as “SALT”)....more

Kramer Levin Naftalis & Frankel LLP

M&A Structuring Opportunities Utilizing State Level Pass-Through Entity Tax Regimes

State-level pass-through entity tax (PTET) regimes offer structuring opportunities in M&A transactions involving S corporation targets. PTET regimes have been adopted by a growing number of states as a workaround to the...more

Rivkin Radler LLP

New York’s Pass-Through Entity Tax, F Reorgs, and the Sale of An Electing S Corp

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Timing- I had planned to post this piece during the third week of December, a day or so after the exchange between Senator Manchin and the White House sealed the fate of the Build Back Better plan, at least in its current...more

Kerr Russell

Michigan Enacts SALT Cap Workaround For Pass-Through Entities

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On December 20, 2021, Governor Gretchen Whitmer signed legislation (H.B. 5376) allowing owners of S corporations and partnerships (including limited liability companies taxed as partnerships) to pay their state and local...more

Bodman

Michigan Enacts Elective Flow-Through Entity Tax as “SALT Cap Workaround”

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On Monday, December 20, 2021, Michigan Governor Gretchen Whitmer signed House Bill (H.B.) 5376 into law.  H.B. 5376, also referred to as Michigan’s “SALT Cap Workaround,” amends the Michigan Income Tax Act to allow...more

Miller Canfield

Michigan Pass-Through Entity Tax Enacted - Quick Action May Be Needed for 2021

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Michigan Gov. Gretchen Whitmer signed legislation on December 20, 2021, allowing Michigan pass-through entities to elect to pay a newly enacted 4.25% income tax and for the owners of those entities to claim a tax credit...more

Foster Garvey PC

The Oregon SALT Cap Workaround for Pass-Through Entities Is Finally Here – Governor Kate Brown Has Signed Senate Bill 727 Into Law

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Last fall, the IRS announced, with respect to pass-through entities (LLCs or other entities taxed as partnerships or S corporations), that, if state law allows or requires the entity itself to pay state and local taxes (which...more

ArentFox Schiff

One, Two, Three, Four . . . Can I Have a Little More? Another State Enacts SALT Cap Workaround

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While business owners wait to see whether Congress raises the U.S. long-term capital gains rate from 20 percent to 25 percent and enacts relief from the limitations on the deductibility of state and local taxes (SALT),...more

Bowditch & Dewey

Massachusetts Legislature Passes Legislation Enacting Work Around to Federal $10,000 SALT Deduction Limitation, but Governor Baker...

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On July 16, 2021, Governor Baker approved a $47.6 billion fiscal 2022 budget, but sent back a provision the Massachusetts Legislature passed creating a workaround for the federal cap on the state and local tax deduction. ...more

Bowditch & Dewey

Massachusetts Enacts Work Around to Federal $10,000 SALT Deduction Limitation

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On July 16, 2021, Governor Baker enacted legislation that allows (a) individual, trust and estate taxpayers who are partners in partnerships (or limited liability companies taxed as partnerships) and (b) individual, trust and...more

Gould + Ratner LLP

Pending Changes to Illinois Tax Laws Include SALT Workaround

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Illinois lawmakers have approved legislation that is both good news and bad news for Illinois taxpayers. The good news is that, if approved by Gov. Pritzker, Illinois taxpayers will be able to take advantage of a workaround...more

Kelley Drye & Warren LLP

New York State Enacts Elective Pass-through Entity Tax as a SALT Deduction Limitation Workaround

In April 2021, New York State enacted legislation providing for a new elective pass-through entity (PTE) tax on partnerships and Subchapter S corporations. The 2017 Tax Cuts and Jobs Act generally limits an individual’s...more

Rivkin Radler LLP

New York Budget Deal Includes SALT Cap Workaround

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The New York state budget deal announced yesterday includes a workaround of the temporary federal limit on state and local tax deductions (the SALT cap). The provision was part of Gov. Cuomo’s initial budget proposal in...more

Sullivan & Worcester

Massachusetts DOR Report Endorses SALT Cap Workaround

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A new Massachusetts Department of Revenue (DOR) Report to the Legislature supports changing the Commonwealth’s tax law to enable owners of partnerships and S corporations to avoid the federal limitation on state and local tax...more

Cole Schotz

SALT CAP Workaround – An IRS Holiday Gift

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The 2017 Tax Act made life harder on individuals living in high tax states (such as New York, New Jersey, and California) by limiting the deduction for state and local taxes (“SALT”) to $10,000. In an attempt to circumvent...more

Fox Rothschild LLP

Partnerships And S Corporations Exempted From Limits On State And Local Tax Deduction

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The IRS intends to issue proposed regulations to permit a partnership or an S corporation to deduct specified income tax payments made to a domestic state or local jurisdiction. In Notice 2020-75, the IRS clarifies that...more

Pullman & Comley, LLC

Good News for Owners of Connecticut Pass-Through Entities

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The Internal Revenue Service (IRS) released Notice 2020-75 on November 9, 2020, which validates the federal income tax deductibility of the payment of the Connecticut Pass-Through Entity Tax (the “PET”)....more

Ballard Spahr LLP

Treasury Announces Pass-Through Entities Will Not Be Subject to SALT Deduction Cap

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In a surprising—but taxpayer-friendly—development, Treasury announced in Notice 2020-75 (available here) that it will be issuing proposed regulations that allow partnerships and S corporations to deduct certain state and...more

McGlinchey Stafford

No Partner/S-Corp Shareholder SALT Deduction Limit On Entity Income Taxes

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The Internal Revenue Service has announced that it will be issuing proposed regulations clarifying that certain state or local income taxes imposed on and paid by a partnership and/or an S corporation will not be subject to...more

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