The New York State Division of Budget says $93 million was contributed to the state's Charitable Gift Trust Fund in Fiscal Year 2019 — which ended in March — $58 million toward health care and another $35 million for education.
- State reports $93 million to SALT workaround fund
- Governor's office said the IRS wants to end it
- Assemblyman said program is limited because there's not a "dollar-for-dollar" tax credit
The state expected the plan would allow taxpayers, who could contribute the difference of their state and local obligation after a $10,000 cap, to make the same amount of federal deductions they had before the federal Tax Cuts and Jobs Act of 2017 limited it. However, the IRS in August of last year proposed regulations which would ban those reductions — a proposal the state is fighting.
"The Federal government has even taken aim at this successful program by proposing regulations that would effectively end it, continuing its partisan assault on New York and widening the $36 billion gap between the taxes New Yorkers send to Washington and what we receive in return — all so that large corporations and other states can reap the rewards,” Jason Conwall, a spokesperson for the governor, said.
Assemblyman Robin Schimminger, D-Kenmore, pointed out the state only offered a credit for 85 percent of the contribution to its fund — and 95 percent of any local funds — creating a risk he believes many taxpayers were unwilling to take with federal uncertainty.
"When I proposed this same concept for the state, I proposed a dollar-for-dollar tax credit, so that there would not be that little extra taken off the top to benefit the state and it would've eliminated the reluctance factor, the reluctance of taxpayers to take advantage of this," Schimminger said.
However, he believes the IRS is obligated to honor the deductions and the issue is ripe for a lawsuit from a New York taxpayer.
"I would think that person would win, based upon past precedents but that's what it will take to ultimately resolve this," Schimminger said.
Meanwhile, the City of Buffalo said it has approximately $3.1 million in commitments to its fund for this year and next and the money will go to the general fund to help cover programs, services and expenses.