2017 state income taxes paid in 2018. Are they subject to SALT limit?

[davidchavkin]

I paid some 2017 state income taxes with my 2017 return in 2018.  TurboTax treated those 2017 taxes as subject to the $10,000 SALT limit for 2018 itemized deductions.  Is that correct?

[HelenaC · Accepted solution]

Yes, TurboTax is correct. You are a "cash basis" tax payer. It doesn't matter what year the state income taxes are for, what matters is when you paid them. You paid them in 2018 so they are reported on the 2018 income tax return and subject to 2018 tax law. 

Most individuals are cash basis, calendar year taxpayers. Under the cash method, income is not counted until cash (or a check) is actually received, and expenses are not counted until they are actually paid.

Related information:

• How will tax reform affect my 2018 federal tax return?