August 31, 2010
New York Limits Charitable Contribution Deductions for High Earners
Earlier this month, the Chronicle of Philanthropy reported that New York Governor David A. Paterson signed into a law a bill that limits wealthy individuals - those with adjusted gross income above $10 million annually - to a deduction equal to 25 percent of their charitable contributions. Previous law only imposed a 50 percent limit, which is still the limit for other New York taxpayers. While only directly affecting about 3,500 people, it is estimated that the provision will raise up to $100 million in the current fiscal year alone (according to an earlier Chronicle article), indicating that a significant amount of contributions will be hit by the now lower limit. Given that President Obama has proposed a similar, although less draconian, limit on charitable contribution deductions by the highest earners (as previously blogged about), it will be interesting to see what effect, if any, the NY law has on giving in that state.
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