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Beating the SALT Deduction Limit

As you can see by the details of the programs from the states above that have some form of pass-through entity tax that the rules vary widely by state. Many use a credit to pass-through the benefit while others adjust income on the member level.

Many considerations need to be taken into account. Even if the SALT limit were eliminated there would still be instances where the pass-through entity tax would be beneficially to entity members. 

There are also reasons not to make the election (except in Connecticut where it is mandatory) as the pass-through entity tax can affect the Qualified Business Income Deduction, Earned Income Credit, Saver’s Credit, Premium Tax Credit and more.

The tax professional preparing the entity return and that of all the members will have an easier time determining the best course of action.

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