IRS final rules codify safe harbors for businesses who make charitable contributions in exchange for state tax credits.
The rules (T.D. 9907) clarify that businesses that donate to charitable funds in exchange for a state tax credit can deduct those costs from their federal tax returns.
Friday’s guidance follows the agency’s crackdown on state workarounds for the federal limit on state and local tax deductions. The 2017 tax law capped SALT deductions at $10,000.
The agency adopted its December proposed version, with some clarifications in response to comments and testimony.
The “final regulations do not adopt ...
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