August 7, 2018

(SCHOOL CHOICE AND VOUCHERS) Permanent link   All Posts

AASA Leads Letter to Administration on Regulatory Treatment of Voucher Programs

AASA along with 21 other organizations that belong to the National Coalition for Public Education wrote a letter asking the Trump administration to close a tax shelter that allows donors to state tax credit voucher programs to reap both state and federal tax benefits. Eighteen states have tax credit scholarship programs, which award individuals or businesses a full or partial tax credit when they donate to organizations that grant private school scholarships.  The letter specifically addresses a soon-to-be-released regulation on the State and Local Tax Cap that was put in place under the GOP tax proposal last year that caps state and local tax deductions at $10,000. 

While the letter does not take a position on how the IRS treats states that have proposed a similar workaround that would allow taxpayers to get a federal deduction and a state credit for their donations to support public schools, the IRS is expected to block theses efforts in high-tax states. If the IRS denies states like New Jersey, New York, Oregon and others to use an identical state tax credit/federal deduction work-around the letter argues that it would create a tax preference for donations to private schools over public schools. 

When the proposed SALT regulation is released we will be asking school leaders to submit comments to the IRS, so stay tuned! 

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