Fighting Back Against the Federal SALT Cap

The 2018 State Budget included important provisions to help shield NY taxpayers from the federal government’s cap on State and Local Tax Deductions (“SALT”). This included:


  • The creation of new State charitable funds for education and health care: Taxpayers may make donations to these funds and receive a State tax credit equal to 85 percent of the donation amount for the tax year after the donation is made. The charitable deduction should be federally deductible. Local governments are also authorized to setup similar funds.
  • Creation of new optional payroll tax: Allows employees to pay income taxes through an employer “payroll tax” while receiving a credit on their income taxes. Taxpayers should see no decline in take-home pay. The payroll tax for employers would remain federally deductible
  •  De-Coupling the NY Tax Code from the Federal Tax Code: This ensures NYS taxpayers who take the new federal Standard Deduction can still itemize their State taxes if they choose. It prevents the State from receiving a $1.5 billion windfall because of the changes to federal law

Keeping New York Affordable

  •  The Assemblyman fought to phase out the 18-a utility surcharge imposed on energy bills.
  • Provided much-needed reform to the State’s estate tax by raising the income threshold from $1 million to $5.2 million over the next four years.


Improving the Business Climate

  •  Assemblyman Magnarelli voted to eliminate the corporate tax on manufacturers, saving businesses $193 million.
  • Provided manufacturers with a 20% tax credit to offset their property taxes.
  • Supported State Budgets that included a corporate tax cut that will amount to approximately $500 million when fully phased in.

Tax Relief and Reform

Reducing the Tax Burden

  • The 2018 State Budget continued the phase-in of middle-class tax cuts passed in the 2017 State Budget that will lower the tax rates on middle-class families to be at the lowest levels in 70 years. In 2018, the average taxpayer will save approx. $250 and when fully phased in will save approx. $700.
  • Extended the real property tax cap until 2019-2020 to continue controlling the property tax burden in NY.
  • Extended the County-Wide Shared Services Panel for three years to allow local governments to continue working together to provide services more efficiently and reduce property taxes. $225 million is available from the State to help counties match savings achieved in their plans.
  • Doubling the Child Tax Care Credit. In the 2017 State Budget Assemblyman Magnarelli voted to double the State Child Tax Care Credit for families earning between $60,000 and $150,000, bringing the total credit from $169 to $376 per household on average.
  • The 2018 State Budget also extended the Local Property Tax Relief Credit. This credit will provide an average reduction of $380 in local property taxes to 2.6 million homeowners this year alone. By 2019, the program will provide an additional $1.3 billion in property tax relief and an average credit of $530.