The SALT Parity Act (act) was enacted in 2021 and, for income
tax years commencing on or after January 1, 2022, the act allows pass-through entities to elect to pay state income tax at the entity level, which allows the entity to claim an unlimited deduction at the federal level for state and local taxes paid. While this election reduces federal taxable income for the pass-through entity, it does not reduce Colorado
taxable income under current law.
The bill makes provisions of the act retroactive to January 1, 2018.
