IRS Likely to Issue Regulation Addressing States’ Efforts to Avoid SALT Cap

On Friday, March 8, Bloomberg News published an article claiming that the IRS is likely to issue additional regulations regarding states’ efforts to circumvent the state and local tax deduction limitation put in place pursuant to the Tax Cuts and Jobs Act. Bloomberg News quotes Scott Dinwiddie, of the IRS’s Income Tax and Accounting Division as having said, “From the IRS perspective, the workarounds certainly have not gone unnoticed.” It is unclear when such regulations may be issued and what, if any, impact they might have on the Connecticut Pass-Through Entity Tax (“PET”), but we will continue to monitor this situation closely and post updates here as may be appropriate.