Alerts7.23.21
California Adds to List of States Allowing State and Local Tax Cap Workaround
Highlights
California now allows a workaround on the $10,000 limitation on the deduction of state and local taxes of certain taxpayers
The workaround applies to qualifying limited liability companies, partnerships and “S” corporations
The qualifying entity can elect annually to pay a 9.3 percent tax of its qualified net income to the California and the consenting owner(s) of the entity will receive a credit equal to the tax paid by the entity on such owner’s behalf
The State of California has become the latest state to allow a workaround on the $10,000 limitation on certain taxpayers to deduct state and local taxes on their federal income tax returns.
Keep Up to Date in a Changing World
Do you want to receive more valuable insights directly in your inbox? Visit our subscription center and let us know what you’re interested in learning more about.
