Assemblymember Amy Paulin's Legislation to Provide SALT Cap Tax Relief for Partnerships Passes in the New York State Budget
By Michelle Sterling, Director of Communications, Office of Assemblymember Amy Paulin
Apr. 21, 2021: Assemblymember Amy Paulin announced the passage of legislation included in the state budget which provides SALT cap tax relief for partnerships. “This is a much needed boost for the New York economy in these difficult times,” Paulin said.
The federal Tax Cuts and Jobs Act of 2017 (the Act) eliminated the full deductibility of state and local taxes (SALT), and capped deductions at $10,000. This law disproportionately hurt Democratic states like New York, where residents’ state and local taxes often exceed $10,000.
To fight back Assemblymember Paulin authored this legislation which makes the full SALT deduction available to partnerships and other pass-through entities. The legislation allows New York State partnerships and other pass-through business entities to elect to pay a tax to New York State, for which they would get a full federal deduction, with the tax payments offsetting the partners’ New York State income tax.
This setup is fiscally neutral to New York State, but allows partners to take the full SALT deduction, which would otherwise be limited to $10,000 if the partners paid their income taxes directly to New York State.
Following the passage of the Act in 2017, several states, including New Jersey and Connecticut, passed similar laws allowing pass-through entities to pay taxes at the entity level, and receive a credit on their state income taxes to offset it, which avoids the SALT cap.
On November 9, 2020, the IRS issued a notice which stated that they would allow this arrangement to apply to tax payments made on or after November 9, 2020.
“Giving relief to New Yorkers - who have been disproportionately affected by the SALT cap – has been one of my top priorities,” said Assemblymember Paulin. “This legislation provides a common-sense benefit to New Yorkers - at no cost to New York State - for the 2021 tax year.
Pictured: Amy Paulin, Assemblymember, District 88, New York State Assembly.
Photo courtesy Office of Assemblymember Amy Paulin
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Bronxville is a quaint village (one square mile) located just 16 miles north of midtown Manhattan (roughly 30 minutes on the train) and has a population of approximately 6,500. It is known as a premier community with an excellent public school (K-12) and easy access to Manhattan. Bronxville offers many amenities including an attractive business district, a hospital (Lawrence Hospital), public paddle and tennis courts, fine dining at local restaurants, two private country clubs and a community library.
While the earliest settlers of Bronxville date back to the first half of the 18th century, the history of the modern suburb of Bronxville began in 1890 when William Van Duzer Lawrence purchased a farm and commissioned the architect, William A. Bates, to design a planned community of houses for well-known artists and professionals that became a thriving art colony. This community, now called Lawrence Park, is listed on the National register of Historic Places and many of the homes still have artists’ studios. A neighborhood association within Lawrence Park called “The Hilltop Association” keeps this heritage alive with art shows and other events for neighbors.
Bronxville offers many charming neighborhoods as well as a variety of living options for residents including single family homes, town houses, cooperatives and condominiums. One of the chief benefits of living in “the village” is that your children can attend the Bronxville School.
The Bronxville postal zone (10708, known as “Bronxville PO”) includes the village of Bronxville as well as the Chester Heights section of Eastchester, parts of Tuckahoe and the Lawrence Park West, Cedar Knolls, Armour Villa and Longvale sections of Yonkers. Many of these areas have their own distinct character. For instance, the Armour Villa section has many historic homes and even has its own newsletter called “The Villa Voice” which reports on neighborhood news.
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