ON AIR NOW

LISTEN NOW

Weather

cloudy-day
82°
Partly Cloudy T-storms
H 90° L 70°
  • cloudy-day
    82°
    Current Conditions
    Partly Cloudy T-storms. H 90° L 70°
  • partly-cloudy-tstorms-day
    90°
    Today
    Partly Cloudy T-storms. H 90° L 70°
  • clear-day
    90°
    Tomorrow
    Mostly Clear. H 90° L 70°
LISTEN
PAUSE
ERROR

Wsb news on-demand

00:00 | 00:00

LISTEN
PAUSE
ERROR

Wsb traffic on-demand

00:00 | 00:00

LISTEN
PAUSE
ERROR

Wsb weather on-demand

00:00 | 00:00

Business
Treasury limits state and local tax cap workarounds
Close

Treasury limits state and local tax cap workarounds

Treasury limits state and local tax cap workarounds
Photo Credit: AP Photo/Patrick Semansky
This Thursday, June 6, 2019, photo shows the U.S. Treasury Department building at dusk, in Washington. The Treasury Department issued final rules Tuesday, June 11 that would clamp down on taxpayers trying to circumvent a new cap on state and local tax deductions. (AP Photo/Patrick Semansky)

Treasury limits state and local tax cap workarounds

The Treasury Department issued final rules Tuesday that would clamp down on taxpayers trying to circumvent a new cap on state and local tax deductions.

The Tax Cut and Jobs Act, promoted by the Trump administration and passed in late 2017, limits the amount of state and local taxes that can be deducted on an individual's federal taxes to $10,000 a year. The tax law's rules on SALT deductions, as they are known, caused a lot of upset in high-tax states, such as New York, New Jersey and California, where residents had previously benefited from being able to deduct much more.

It also became a highly politicized issue as many of high-tax states tend to vote for Democrats.

Some states tried to find workarounds. This included states allowing taxpayers to donate to charity funds and, in exchange, receive tax credits against their state or local taxes. Taxpayers could then deduct their donations as charitable contributions on federal taxes, lessening their broader tax burden.

But under the new regulations, taxpayers would only be able to deduct charitable contributions greater than the amount of the tax credit they received. For example, if a taxpayer donates $1,000 to a state program and receives a 70% credit, they could only claim $300 — not the $700 they may have been aiming for.

There are some exceptions for dollar-for-dollar state tax deductions and for tax credits in which a taxpayer gets a credit worth less than 15% of their donation.

The Treasury Department said in a statement that the regulation is "based on a longstanding principle of tax law" that if a taxpayer receives a valuable benefit in return for a donation, they can only deduct the net value of the donation.

The final regulations take effect Aug. 11 but apply to contributions made after Aug. 27, 2018.

The regulations are "neither new nor surprising in clarity and direction" said Mark Steber, chief tax officer at Jackson Hewitt Tax Services.

He said the Treasury Department has been very clear from the get-go that any "creative interpretations or constructs intended to bypass the limitation" would be met with a negative response and potentially harsh consequences. While there have been many creative and alternative ideas for bypassing the limitation, Steber said they "all have been denounced by the most optimistic of tax experts."

All the same, the announcement was not warmly received by some of the affected states.

New York Gov. Andrew Cuomo said that the by finalizing the rule, the federal government is "continuing its politically motivated assault on New York" and that the cap uses New Yorkers "as ATMs." Cuomo argued the rules do not have any basis in law and that the state will pursue all options, including litigation, to fight the issue.

Read More

News

  • The Cherokee County teen cancer patient who wanted to participate in his high school graduation has passed away. Cherokee County Fire and Emergency Services said 17-year-old Logan Droke died Sunday at MD Anderson Center in Houston, Texas. First responders around metro Atlanta and the country sent video messages of support to Droke while he was hospitalized at Children’s Healthcare of Atlanta at Scottish Rite, the Cherokee fire department said. He was later transferred to MD Anderson to continue his cancer treatments.  RELATED Senior battling cancer wants to take part in graduation Firefighters will walk at graduation for teen cancer patient Cherokee and Cobb County firefighters also organized fundraisers to help the Droke family offset the cost of the teen’s medical bills.  Logan’s father, Cherokee County firefighter Randall Droke, said his son wanted to attend his May 31 high school graduation ceremony, but doctors advised the teen against making that decision. Cherokee firefighters attended the teenager’s Creekview High School ceremony in his place. Return to AJC.com for updates. Like Cobb County News Now on Facebook | Follow on Twitter
  • River “Oakley” Nimmo wanted to be in the Army when he grew up, but he will never have the chance after losing his battle with cancer.  The 5-year-old died last week after a 3-year battle, KTHV reported. According to River’s obituary, “Oakley spent most of this life, fighting to live and did it with a smile on his face. In between hospital stays, Oakley spent his free time driving his power wheels and shooting his toy guns. He often talked about being an “Army Man,” as he called it, when he grew up.” >> Read more trending news  The child’s parents are now asking current and past members of the military to come to their son’s funeral Tuesday, dressed in full dress uniform to honor their son’s dream. The service will be held at Cullendale First Baptist Church in Camden, Arkansas, with burial following at Furr Cemetery in Locust Bayou, Arkansas.
  • Deputies routinely pull over speeders. However, a Florida deputy had the opposite issue when traffic was slowed down by a gopher tortoise taking a leisurely stroll along the highway. >> Read more trending news  Deputy Leonard Fontenot 'conducted a traffic stop' on the animal for 'impeding traffic flow,' officials with the St. Johns County Sheriff's Office wrote in a Facebook post published Friday. The result was a selfie with Fontenot and the tortoise. The tortoise was trudging along the Nocatee Parkway south of Jacksonville when Fontenot approached the 'Gopherus Genus, exact age unknown.' According to the Facebook post, the tortoise 'failed to clear the roadway' when asked to do so by Fontentot. But after a 'heartfelt conversation' about risks of walking on a roadway while vehicles sped past, the tortoise was released. 'Gopherus was cooperative during the remainder of my encounter with him, so I chose to use discretion and let him go with a warning,' Fontenot was quoted in the Facebook post. 'In fact, our interaction was so positive, we posed for a selfie together!' Gopher tortoises, actually known as Gopherus polyphemus, and their burrows are protected by state law, according to the Florida Fish and Wildlife Conservation Commission. The animal can live between 40 to 60 years in the wild and more than 90 years in captivity, according to the commission's website.
  • Friends and family are asking for the public's help after they say 23-year-old University of Utah student MacKenzie Lueck went missing after taking a Lyft ride from an airport. In a news release, the Salt Lake City Police Department said Lueck returned to Salt Lake City after visiting family on June 17. She took a Lyft from Salt Lake City Airport to an address in North Salt Lake, Utah, early Monday morning.  The Salt Lake Tribune reported that Lueck was in her home state of California for her grandmother's funeral. When she returned to Salt Lake City, she texted her parents around 1 a.m. Lueck's parents reported her missing Thursday afternoon, according to the publication. She is 5 feet, 6 inches tall with blond, medium-length hair and weighs about 120 lbs, KUTV reported. CBS News reported that her best friend, Juliana Cauley, said Lueck doesn't live in North Salt Lake and she doesn't know why she went there.  >> Read more trending news  'SLCPD has been conducting a missing persons investigation and have spoken with both Lyft as well as the Lyft driver,' the department said in the news release. 'Lyft and their driver have cooperated with the investigation.' “We don’t have anyone searching any particular area right now because we don’t have any credible evidence of where she might be,' Sgt. Brandon Shearer told The Salt Lake Tribune. A representative for Lyft told CBS News there were no irregularities with Lueck's ride and that it ended at the destination she entered on the app and the driver continue to pick up and drop off other customers right after Lueck arrived at her destination. 'We recognize how scary this must be for those who know and love Ms. Lueck,' Lyft said in a statement to KSTU. 'The safety of our community is fundamental to Lyft and we are actively assisting law enforcement with their investigation.' 'Our primary goal is to find Mackenzie and bring her home,' Lueck's family said in a statement to KUTV. 'Her family is grateful for the concern, prayers and the tireless efforts of the Salt Lake City Police and members of the community.' 'The SLCPD has not discovered any information that would lead us to believe that Mackenzie has been harmed or is in danger at this time,' the department said. 'Detectives are concerned for Mackenzie’s welfare. If anyone has any information on Mackenzie or where she may be, please contact SLCPD at (801)799-3000 re: case 19-111129.
  • A 25-year-old Texas man was electrocuted early Sunday after possibly trying to steal copper from a transformer on a telephone pole in Dallas, police said. >> Read more trending news  Gabrield Monjaraz, was found dead by police about 30 feet away from the transformer after authorities responded to a 911 caller at 3:12 a.m. who said she heard gunshots, WFAA reported. When first responders arrived, they thought Monjaraz had been hit by a vehicle, The Dallas Morning News reported. However, the Dallas County medical examiner determined Monjaraz had been electrocuted. >> Alabama man electrocuted while stealing electricity, sheriff says After investigating the scene, police found Monjaraz was wearing rubber gloves and the nearby transformer had black marks on it, KTVT reported.
  • Topgolf wants to build a new driving range in Gwinnett. The golf range company has been long suspected as the “golf entertainment complex” proposed for the forthcoming Exchange at Gwinnett mixed-use development. Those suspicions were confirmed when the Texas company filed permit applications with the county planning and development department on May 30. MORE | Brewery, food hall proposed for new development near Mall of Georgia READ | Gwinnett greenlights big mixed-use project near Mall of Georgia Topgolf is a popular driving range company that offers a video game-like experience to players featuring colorfully lit targets and microchipped golf balls. The ranges also feature bars and arcade games. There are currently two metro Atlanta Topgolf locations: one near Atlantic Station in Atlanta and another in Alpharetta. The 14-acre range would be part of the Exchange at Gwinnett, a 64-acre mixed-use development near the Mall of Georgia and Coolray Field. Plans including the “golf entertainment complex” that could become Topgolf have already been approved. Initial plans also included 500 apartments, restaurants, retail space, a hotel and a fitness center. A plan for an additional 34.5 acres including a food hall, brewery space and rooftop bar have been recommended for approval by the county and will likely see a public hearing on July 2. The additional space would also include a medical building, movie theater and 500 more apartments, taking the total number of living units to 1,000.  The planning and development department has not yet made a recommendation for approval or denial regarding the Topgolf permit applications to the Gwinnett County Board of Commissioners. Like Gwinnett County News on Facebook | Follow us on Twitter and InstagramStay up to the minute with breaking news on Channel 2 Action News This Morning