Illinois Assembly Approves SALT Workarounds for Partnerships

May 31, 2021, 9:49 PM

Illinois lawmakers approved legislation permitting a workaround to the federal $10,000 state and local tax cap for partnerships, sending the bill to Gov. J.B. Pritzker.

The Legislature Sunday passed S.B. 2531, which allows partnerships and S corporations to pay their income tax at the entity-level at a rate of 4.95% and then claim a credit on their state return. The bill essentially permits such businesses to circumvent the $10,000 “SALT cap” added to the 2017 tax reform law because the cap doesn’t apply to business taxes.

  • Late last year the IRS opened the door for this type of workaround ...

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