A new proposal from a Los Angeles lawmaker has emerged aiming to help Californians evade a key provision of the federal tax overhaul passed last year.
Assembly Bill 2217 from Assemblywoman Autumn Burke (D-Marina del Rey) would create a tax-credit system linking charities, educational institutions, the state treasury and individual taxpayers in an effort to allow Californians to sidestep the new $10,000 federal cap on state and local tax deductions.
Under Burke’s plan, taxpayers could make a contribution to nonprofits, universities, community colleges or K-12 public school districts, and those entities would transfer 90% of that donation to the state. In turn, the state would lower a taxpayer’s state income tax liability by issuing a credit equal to 80% of the original donation. And by making a charitable donation, California taxpayers would be able to deduct that entire amount from their federal taxes, Burke said.