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SB 113 expands benefits of SALT workaround!

Recently, California Governor Newsom signed SB 113 into law, greatly expanding the benefits of the elective pass-through entity tax commonly referred to as the SALT workaround.

Previously, under the Tax Cuts and Jobs Act of 2018, taxpayers could only deduct a yearly combined maximum of $10,000 of their state income taxes and property taxes on their federal tax return, which became known as the SALT limitation.  Last year, with the passing of AB 150, a workaround to the SALT deduction cap became available but there were still significant restrictions to the strategy (see our January 2022 Client Advisor article on “AB 150 – SALT Limitation Workaround”).

With the signing of SB 113 in February 2022, the following restrictions were loosened …

(read the full article by Richard Warner, Partner)