STATE AND LOCAL TAX (SALT) DEDUCTION: RELIEF FOR HIGH-TAX STATE FILERS
• Expanded Cap (2025–2029) The Act raises the SALT cap to $40,000 for single and joint filers, with annual 1% inflation adjustments through 2029. Without renewal, the cap reverts to $10,000 in 2030 (Thomson Reuters Tax). • Phase-Out The benefit phases out for filers above $500,000 MAGI in 2025 (and similar thresholds in later years), with the cap dropping fully back to $10,000 past $600,000 (Fidelity). • Who Benefits Most This change may sway more high-tax state residents, particularly those in California, New York, and New Jersey, to itemize deductions again. However, critics note the provision is regressive and primarily benefits upper-middle and upper-income filers (taxpolicycenter.org). The SALT deduction has historically been limited to $10,000, creating heavy burdens for taxpayers in states with high state income and property taxes.
This extended SALT relief often bolsters residential real estate’s attractiveness by enabling higher deduction thresholds for homeowners and investors alike.
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