Massachusetts draft guidance for businesses looking to blunt the burden of the federal SALT deduction cap is “well-written” and leaves little room for confusion, tax practitioners say.
The working draft, issued by the state’s Revenue Department Dec. 30, outlines the election process for pass-through businesses to pay a 5% income tax in exchange for a 90% refundable credit for their owners, unencumbered by the $10,000 federal limit on deductions for state and local taxes.
“Nothing jumps out,” said Timothy Noonan, a partner at Hodgson Russ LLP in New York, who called the guidance cut and dried.