Skip to content
Subscriber Only

IRS Looks for Ways to Squelch New York, Connecticut SALT Workarounds

  • Rules could be a blow to last-ditch efforts to skirt the cap
  • Agency’s already invalidated popular SALT workaround strategy
A pedestrian walks past the IRS headquarters in Washington, D.C.
Photographer: Andrew Harrer/Bloomberg

The Internal Revenue Service is considering issuing rules that could invalidate some of the last remaining strategies in New York and Connecticut to circumvent the state and local tax, or SALT, deduction cap that kicked in for the 2018 tax year.

The IRS is “likely” to issue additional regulations to address high-tax states’ efforts to work around the $10,000 annual write-off limitation, Scott Dinwiddie of the IRS’s Income Tax and Accounting Division said on Friday. The regulations could address programs in New York and Connecticut to circumvent the SALT cap that the IRS hasn’t already knocked down.