Under the Tax Cuts and Jobs Act (TCJA), the deduction for state and local taxes has been restricted to $10,000 per year, which affects many New Jersey taxpayers. On May 4, 2018, Governor Murphy signed legislation to allow local governments to establish non-profit funds that will accept property tax payments as a workaround to TCJA’s cap on $10,000 deduction. The IRS issued a statement on May 23, 2018 that federal tax law will overrule state tax law and stated that details will follow. NJ Attorney General Gurbir Grewal states he will fight any challenge by the IRS to a law that preserves state and local property tax deductions. STAY TUNED!
