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SALT Charitable Rules Create Qualms for Scholarship Funds (1)

Feb. 20, 2020, 4:49 PMUpdated: Feb. 20, 2020, 6:01 PM

Groups representing schools and scholarship funds raised concerns about IRS guidance that would give businesses a tax incentive for donating to charities—although they said the rules are a step in the right direction.

The proposed rules—tied to the 2017 tax law’s $10,000 cap on state and local tax (SALT) deductions for individuals—clarify that corporations and pass-through businesses that donate to charities for a state tax credit can deduct those costs as business expenses. Witnesses at an IRS hearing Thursday encouraged the IRS to finalize the guidance, while offering criticism and calling for it to be applied narrowly.

“Although the ...