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Charitable Contributions and State and Local Tax Credits



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Guidance has been issued by the IRS providing rules on the availability of charitable deductions when a taxpayer receives or expects to receive a corresponding state or local tax credit. 

Under the proposed regulations, taxpayers who make payments or transfer property to an entity eligible to receive deductible contributions must reduce their charitable deductions by the state or local tax credit amounts they receive or expect to receive. 

This will affect residents in states that passed laws to bypass the new $10k limit on state and local tax deductions. (IR-2018-172, Aug. 23, 2018) 

Download the 2018-19 Tax Planning Guide

LBMC tax tips are provided as an informational and educational service for clients and friends of the firm. The communication is high-level and should not be considered as legal or tax advice to take any specific action. Individuals should consult with their personal tax or legal advisors before making any tax or legal-related decisions. In addition, the information and data presented are based on sources believed to be reliable, but we do not guarantee their accuracy or completeness. The information is current as of the date indicated and is subject to change without notice.

Charitable Contributions and State and Local Tax Credits