Suffolk County Executive Steve Bellone announced this week that he will submit a plan to the Legislature to help alleviate the losses seen by families due to the cap on state and local tax (SALT) deductions, as passed in the 2017 Tax Cuts & Jobs Act.
In order to mitigate consequences of the lost tax deduction, Bellone has introduced a resolution to establish a charitable gift reserve fund and to authorize charitable gift reserve fund tax credits. This would authorize any owner of real property located in the county to make a contribution to the Suffolk County Charitable Gift Reserve Fund and claim credit against such property taxes equal to 95 percent of that contribution. The county resolution complies with the New York State-passed provision to allow taxpayers to make a voluntary charitable contribution to a charitable gift reserve fund.
In 2018, Gov. Andrew Cuomo and the New York State Legislature enacted a series of reforms to the New York State tax code designed to protect New York residents from the adverse impacts of the federal law. The new legislation authorized local governments and school districts to establish charitable gift reserve funds and to offer real property tax credits to incentivize contributions.
The Tax Cuts & Jobs Act, passed in December 2017 and signed by President Donald Trump, capped these deductions at $10,000, or $5,000 for married taxpayers filing separately. Prior to the new federal tax law, SALT deductions were not capped. According to the Urban-Brookings Tax Policy Center in Washington, a total of nearly 530,000 homeowners, or more than one in three tax filers in Nassau and Suffolk counties, are affected by the SALT cap.
Bellone argued in remarks Tuesday that New York has paid more than its fair share of federal taxes. He said the state comptroller estimates that New York sent $24 billion more in tax payments to Washington than it got back in federal spending last fiscal year. Bellone also threatened legal action against the IRS, which he said has unfairly put restrictions on efforts to alleviate the tax burden.
“My message to the IRS is clear: if you try to stop us from protecting our SALT deductions, we will see you in court,” Bellone said.
An administrator, the Suffolk County Director of the Real Property Tax Service Agency, who would issue acknowledgements to homeowners who make contributions, will manage the fund, Bellone said. Homeowners can then present this acknowledgment to their town tax receiver with a claim credit form prescribed by the county.
“While we continue to hope that Congress restores these tax deductions, Suffolk County will not wait for Washington to act,” Bellone said.
The county will also reignite an online petition, which the executive plans to bring to Washington to lobby for the reinstatement of unlimited SALT deductions.