The federal offset of saving $1 of federal taxable income for a $1 of SALT paid was severely restricted. The New York State legislature and the governor included this SALT workaround in the most recently approved budget that was passed on April 6, 2021. Assume Partnership Y, a New York State partnership, has three partners; Lynn, Jen, and Tammy who are all New York State residents. Partnership Y decides to make the pass-through entity tax election and pay the 2022 New York State tax directly. After all, with the ever-increasing New York State income tax rates there has to be some enticement to keep businesses around.

Source: Forbes May 27, 2021 15:40 UTC