Skip to content

MENU

Ropes & Gray LLP logo
HomeAboutContactCOVID-19 Thought Leadership

Disputing Tax

Quarterly Insights from Ropes & Gray

Home » Notice 2020-75: The SALT Cap Does Not Apply to Income Tax Payments Made by Partnerships and S Corporations (in contrast to actual payments made by a partner or S corporation shareholder)

Notice 2020-75: The SALT Cap Does Not Apply to Income Tax Payments Made by Partnerships and S Corporations (in contrast to actual payments made by a partner or S corporation shareholder)

Photo of Lee AllisonPhoto of Janice Lee
By Lee Allison & Janice Lee on November 10, 2020
Posted in Fall Newsletter 2020

In Notice 2020-75, the Treasury/IRS announced that proposed regulations will be issued to provide certainty that income tax payments made by partnerships and S corporations (as opposed to flowing through the tax to, and with payment then made by, each actual partner or S corp shareholder) are deductible without being subject to the SALT cap that was imposed by the 2017 Tax Cuts and Jobs Act.

The Notice explicitly states that this is true regardless of (i) whether the state gives a full or partial tax credit to a corresponding partner or S corp shareholder and (ii) whether the state law to tax the actual partnership or S corporation applies mandatorily or by election.

The applicability date is for (i) income tax payments  made on or after November 9, 2020 and (ii) also those made before then but for a taxable year ending after December 31, 2017, as long as the corresponding state law was enacted before November 9, 2020.

Please click here to view the original alert.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Lee Allison Lee Allison
Read more about Lee Allison
Photo of Janice Lee Janice Lee
Read more about Janice Lee
Related Posts
Coronavirus Thought Leadership and Updates from the Biden Administration
December 16, 2021
Final BEAT Regulations Contain Promise and Pitfalls for Taxpayers
November 13, 2020
When S Corporations Should Elect Entity Treatment for GILTI Purposes
November 3, 2020

Stay Connected

RSS LinkedIn

Topics

Archives

Recent Updates

  • U.S. Executive Order on the Development of Digital Assets
  • Damages From Inherently Physical Injuries Are Not Taxable
  • Upcoming and Noteworthy Tax Controversy Events
  • New LB&I Campaign Consistent with Increased IRS Focus on Partnership Tax Compliance
  • Hughes v. Northwestern University: Key Takeaways for 401(k) and 403(b) Plan Sponsors and Fiduciaries

Disputing Tax

Ropes & Gray LLP logo
RSS LinkedIn
DisclaimerPrivacy Policy
Copyright © 2023, Ropes & Gray LLP. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo