On Dec. 16, 2020, New York legislation was submitted to impose an unincorporated business tax (UBT) on partnerships and limited liability companies that are treated as partnerships for federal tax purposes. The legislation is intended to provide a workaround for the $10,000 limitation on deductions of state and local taxes (SALT) put in place in the Tax Cuts and Jobs Act of 2017 and was recently given the green light in IRS Notice 2020-75. Several states including Connecticut and New Jersey have enacted taxes on unincorporated entities as workarounds; this prompted the IRS to issue Notice 2020-75.

Continue reading the full GT Alert, “Proposed New York State Unincorporated Business Tax Provides SALT Limitation Workaround.”