N-2020-75: IRS provides certainty regarding the deductibility of payments by partnerships and S corporations for State and local income taxes

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Nov. 9, 2020

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Issue Number: N-2020-75

Inside This Issue

Notice 2020-75 announces that the Department of Treasury and the Internal Revenue Service (IRS) intend to issue proposed regulations to clarify that State and local income taxes imposed on and paid by a partnership or an S corporation on its income are allowed as a deduction by the partnership or S corporation in computing its non-separately stated taxable income or loss for the taxable year of payment, and therefore are not subject to the State and local tax deduction limitation for partners and shareholders who itemize deductions.

Notice 2020-75 will appear in IRB 2020-49, dated Nov. 30, 2020

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