State and Local Tax Refunds & the Tax Benefit Rule

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In years prior to 2019, and the enactment of the Tax Cuts and Jobs Act (TCJA), taxpayers were accorded an “unlimited” federal income tax deduction for all state and local income taxes as well as real estate taxes, if they were able to itemize deductions. In those instances when the state and local income taxes […]

Analyzing the TCJA’s Impact on States

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Not subject to as much media attention as federal income tax legislation, the state impacts resulting from the enactment of federal legislation always poses budgetary challenges for leadership in those jurisdictions. Oftentimes, federal income tax incentives, such as accelerated and bonus depreciation, can prove unduly costly for states whose income tax regimes are predicated upon […]

IRS vs. NJ Battle Continues

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IRS Reiterates Its “Prepaid Property Tax” Position for NJ Under the Tax Cuts and Jobs Act (TCJA), enacted on December 22, 2017, a taxpayer’s itemized deduction for state and local taxes for the tax years 2018-2025 is limited to $10,000 ($5,000 for married filing separately) per year. This new limitation was particularly burdensome for taxpayers […]

Internal Revenue Service Draws Ire of the New Jersey Attorney General

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In response to the Notice issued  by the Internal Revenue Service (IRS)  requiring taxpayers to adhere to federal tax law and its guiding concepts in deducting  property tax payments on their federal income tax returns, the New Jersey Attorney General has threatened to take the matter to Court, if necessary, to preserve state and local […]

House Democrats Accuse IRS of “Bureaucratic Overreach”

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On March 5, 2018, 11 Democratic members of the House Ways and Means Committee sent a letter to Acting Internal Revenue Service Commissioner David J. Kautter, requesting an explanation for restrictions placed on the prepayment of property taxes in 2017. Kautter is serving as commissioner until Charles P. Rettig, President Trump’s nominee, is confirmed by […]