As Dems push SALT cap repeal, many states have OK’d workaround – By Brittany De Lea (FOX Business) / July 12 2021
The IRS says it is okay for small business to pay income taxes at the entity level
Some Democrats in Congress are pressing President Biden to repeal a $10,000 cap on state and local tax deductions as he considers tax increases, but a number of states have already approved a method that allows some residents to circumvent the cap.
The push to repeal the cap has garnered the support of Sen. Majority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., who live in high-tax states where residents would benefit from terminating the cap.
A number of states have implemented a variation of a workaround that the IRS already allows.
The IRS issued guidance allowing small businesses – classified as pass-through entities, proprietorships and partnerships – to circumvent the cap by allowing them to pay their income taxes at the entity level.
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