Overview
Peter Faber said that a “wonderful tax shelter opportunity” is available when an individual receives both a full state income tax credit for a charitable contribution and a federal tax deduction for the same amount. “If a person gave $1,000 to charity and got a $1,000 credit against his state income tax for the ‘contribution,’ the contribution would cost him nothing,” he said. “If, in addition, he got a federal tax deduction for the $1,000, he would actually make money—the federal tax savings on the $1,000 deduction—by giving money away.”