Final rule on charitable contributions and state taxes

Treasury has announced the IRS has issued final rules and additional guidance on the federal income tax treatment of payments made under state and local tax credit programs. The regulations prevent charitable contributions made in exchange for state tax credits from circumventing the new limitation on state and local tax deductions. The amendments to the Internal Revenue Code are scheduled for Federal Register publication on June 13, and to be effective 60 days later, on August 12. They will be retroactively applicable to amounts paid or property transferred by a taxpayer after August 27, 2018.