Gottheimer announces legislation to fight tax rules

U.S. Congressman Josh Gottheimer (NJ-5) announced new legislation, the “Preserve the Charitable Deduction Act,” that will stop IRS regulatory overreach.
When passes, it will allow New Jersey towns to use the charitable tax deduction that 33 other states have been utilizing for decades now. Last year, after NJ passed legislation allowing for towns to set up charitable funds, the IRS, without any legislative basis, issued provisional rules that would severely limit the state’s ability to offer tax relief — not to mention curtail the tax benefits in other states.
Fair Lawn is one of the towns in New Jersey that passed a resolution in favor of setting up a charitable fund, but, under the IRS’s proposed new rules, cannot move forward with their plans.
Gottheimer was joined by Assemblywoman Lisa Swain and Fair Lawn Mayor Kurt Peluso, who is ready to utilize the charitable tax deduction.
“Simply put, Congress didn’t give the IRS permission to interpret the tax law as they see fit, which they are trying to do by dismantling the charitable tax deduction," Gottheimer said. "Their new, proposed cap is not in last year’s tax legislation — no one told them to do it. Yet, now, they’ve gone ahead and punched us in the gut. Ironically, this time, they’re also hitting the 33 states who’ve been utilizing the charitable provision for decades. The legislation I’ll be introducing in the coming weeks will stop the IRS in their tracks, so that towns like Fair Lawn can allow its residents to utilize the charitable tax deduction – and finally get real tax cuts. It’s long overdue.
Gottheimer, alongside Peluso and Swain, pushed for New Jersey to deploy the new charitable tax deduction after Congress passed the Tax Hike Bill last year, gutting the State and Local Tax deduction and capping it at $10,000. The average tax payer in Bergen County claimed $24,783 in State and Local taxes. In Sussex County, the average taxpayer claimed $14,267. In Warren County, $12,588 was the average amount claimed, and in Passaic County the average taxpayer claimed $14,714.
For example, for decades, Red States like Alabama, Montana, South Carolina, and Georgia allow their residents to utilize the charitable tax deduction for their private school tuition, and give their residents back a full 100 percent of their contributions as a state tax credit.