Last chance to take action on SALT deduction; move to electronic payments

A provision tucked into the federal reconciliation bill, the One Big Beautiful Bill Act (H.R.1), will negatively impact all pass-through entities (PTEs) that can currently deduct state and local taxes (SALT) through Ohio’s IT 4738.     

The legislation as passed by the U.S. House of Representatives, unfairly targeted specified service trades or businesses (SSTBs) by severely limiting their ability to deduct SALT while allowing the deduction for non-SSTBs.     

The U.S. Senate took a different approach in the version it released on June 16. Under that plan, all pass-through business owners could get deductions for SALT, but it’s now limited to either $40,000 or 50% of the entity level filing benefit, whichever is greater.  While it’s a step in the right direction, a recent AICPA letter recommends three changes that are needed.  Click here to read more details.  

The Ohio Society made it a top priority to ensure Ohio was among the 36 states (see map) that enacted an entity level SALT deduction (S.B. 246, 134th GA), and later expanded to allow the resident tax credit to be taken for SALT income subject to other states’ PTE taxes. The recently passed Ohio budget bill also includes a provision to fix the multi-tier PTE issue.  

Please also use your voice, and take action now. Contact your federal elected officials to ensure these OSCPA legislative victories do not become futile.  It will only take a couple of minutes, and we have a template message already written for you.  

While you are at it, please take this last opportunity to submit feedback to the U.S. Treasury about its upcoming move to electronic payments (no paper checks).