MARLBORO TOWNSHIP, N.J. (CBS) – New Jersey Governor Phil Murphy is leading an effort to allow taxpayers to take advantage of a loophole in the federal tax code to retain most of the state and local tax deductions they now have despite changes imposed by the Trump Administration.
Flanked by several Monmouth County mayors, Murphy said he’d push for the state to do what a few towns in North Jersey are trying to do now.
The IRS can, and often does, approve allowing towns to accept income tax revenue as a charitable contribution to support a local need. 33 states do it in one form or another, and Murphy wants to make New Jersey the 34th.
“If we do this right, and doing it right is important, working and middle class families and seniors could retain most if not all of the deduction and tax benefit they currently enjoy,” the Governor said.
Murphy says his staff is working with legislators on a way to allow both state and local income taxes to be counted as contributions to get past the $10,000 annual cap on deductions now in place on the federal level.
“Cutting New Jerseyans’ SALT, that’s state and local tax deduction is a tax hike on working and middle class families and seniors. Period,” he added.
Murphy concedes the state needs to fix the long-standing property tax problem, and that’ll take time. But this will at least prevent the feds from making things worse.