Some states now offer certain business owners a workaround for cap on state and local tax deduction
A growing number of states are offering pass-through business owners a workaround for the $10,000 federal deduction limit for state and local taxes, known as SALT.

A controversial part of Republicans' 2017 tax overhaul, the SALT write-off cap is costly for filers who itemize deductions and can't claim more than $10,000 for property and state income taxes.

The limit has been a burden to those in high-tax states, such as California, New Jersey and New York. While there has been a push to repeal the law, President Joe Biden hasn't included the measure in his proposals.

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Although the IRS and Treasury have blocked some individual strategies to bypass the cap, some states have created a workaround for pass-through businesses, such as partnerships, S-corporations and some LLCs.

The IRS issued guidance on these state-level tactics in November 2020, offering the green light to certain businesses.

More than a dozen states have passed legislation to approve the workaround, including Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Georgia, Idaho, Louisiana, Maryland, Minnesota, New Jersey, New York, Oklahoma, Rhode Island, South Carolina and Wisconsin, according to the American Institute of CPAs.

There is pending legislation in Illinois, Massachusetts, Michigan, North Carolina, Oregon and Pennsylvania, AICPA said.