Many states are exploring work-around approaches to the $10,000 cap on the federal deduction for state and local taxes enacted in the Tax Cuts and Jobs Act.
Because this issue affects practitioners who advise and assist pass-through entity (PTE) owners, and because many CPA firms are formed as PTEs, the AICPA has created a list of issues that lawmakers, regulators and others should consider as they evaluate this potential work-around approach.
The in-depth issue paper provides background, potential benefits, challenges and complexities of a state PTE-level tax.