The IRS and Treasury are working on guidance for applying the $10,000 state and local tax (SALT) cap to pass-through entities (PTEs), but some think it could invalidate the SALT cap workarounds Wisconsin and other states have enacted.
Wisconsin was the second state to enact a SALT cap workaround with 2017 Wisconsin Act 368, signed into law Dec. 14, 2018. The act permits PTEs to elect into or revoke the election of a 7.9% PTE tax by a vote of at least 50% of the shareholders for an S corporation or at least 50% of the capital and profits interests of a partnership. (Find details in On Balance, March/April 2019).
Discover what other states have done to get around the $10,000 SALT cap.