Did you get a state tax credit for giving to a municipal charitable fund in 2018? You might not be able to nab a deduction for it on your federal tax return. What that means for your taxes.
Things are looking uncertain for filers hoping to get a break on their 2018 federal taxes by contributing to state-run charitable funds.
High-tax states, including New York, New Jersey and Connecticut, responded with a workaround: They passed legislation that would permit municipalities to create charitable funds to pay for local services and offer property tax credits to incentivize homeowners to give. That means it's up in the air as to whether taxpayers who gave to state-sponsored charitable funds will be able to take a break on their federal returns for 2018.
Here's how it works: Donors to these programs collect a credit against their state income tax liability. They can also claim a charitable deduction on their federal income tax return for the contribution. "At this time last year, all of the credits — $30 million — were exhausted," she said."We now have $24 million in credits remaining."
South Carolinians who give to the program can claim a dollar-for-dollar credit on their state income tax liability, up to 60 percent of their state tax liability for that year.
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