IRS blocks state plans to get around the $10,000 limit on SALT deductions. After Congress passed the tax reform law, a few states tried to bypass the cap on federal write-offs for state and local taxes by offering state tax credits in exchange for donations to state-run charitable funds. The idea was to convert nondeductible taxes into deductible charitable gifts. IRS pushed back on these schemes from the start. Final regs deny charitable deductions to the extent SALT credits are received or expected to be received in consideration for the taxpayer’s payment to the charity. There are a couple of exceptions: A de minimis rule for state tax credits that don’t exceed 15% of the amount given to charity. Plus payments to charity in exchange for state tax deductions received equal to the amount of money donated. Under a safe harbor, itemizers can deduct the disallowed charitable write-off as state or local taxes on Schedule A, provided the $10,000 limit hasn’t been reached.