Businesses donating to charitable funds in exchange for a state tax credit can deduct those costs from their federal taxes, according to new IRS regulations released Friday, Aug. 7.
The regulations (T.D. 9907) finalize proposed regulations issued in December 2019 and also incorporate two earlier pieces of IRS guidance, Rev. Proc. 2019-12 and Notice 2019-12.
The final regulations also provide further guidance on the issue of states’ and taxpayers’ attempts to avoid the $10,000 cap on state and local tax deductions by making charitable contributions instead.