It has been reported that the House tax committee’s draft bill to renew President Donald Trump’s tax cuts proposes to increase the state and local tax deduction to $30,000 for couples, but limits the write-off to households earning $400,000 or less.
It was further reported that the bill provides that individuals earning up to $200,000 could claim $15,000 in SALT deductions under the proposal.
While raising the $10,000 cap for state and local tax deduction to $30,000 falls short of what many lawmakers in high-tax states have advocated, negotiations regarding the details of the package are likely ongoing. It was also reported that House Speaker Mike Johnson told reporters today that no final SALT limit had been set yet. The House Ways and Means Committee is slated to debate the legislation Tuesday.
SALT cap increases benefit higher earners who are more likely to itemize deductions. Currently, if you itemize deductions on your federal income tax return, instead of taking the standard deduction, you cannot deduct more than $10,000 in levies paid to state and local governments, including income and property taxes.
Contact Liskow attorneys Bob Angelico, Caroline Lafourcade, and Kevin Naccari, Jr. for additional information or questions regarding how this proposed SALT deduction change might impact your tax planning. Visit our Tax Practice Page for more insights.