As part of the House’s initial draft of the legislative package known as “The One, Big, Beautiful Bill,” lawmakers have proposed increasing the federal cap on the state and local tax (SALT) deduction from $10,000 to $30,000. For taxpayers filing jointly and earning over $400,000, the higher cap would be gradually reduced, but it would not drop below the current $10,000 limit.
The SALT deduction cap, originally implemented under the Tax Cuts and Jobs Act (TCJA) of 2017, has remained a point of contention, especially in high-tax states such as New York, New Jersey, and California. Under the TCJA, for the first time in U.S. tax history, a hard cap of $10,000 was imposed on the deduction for state and local income, sales, and property taxes. Many taxpayers in high-tax states exceed this threshold early in the year, making the limitation particularly impactful.
While the proposed increase represents a potential relief for some taxpayers, it has drawn criticism from lawmakers on both sides. A group of Republican representatives from high-tax states have argued that the $30,000 cap does not go far enough and have signaled they may withhold support for the bill unless the cap is raised further. With at least five House Republicans expressing opposition, the SALT provision may pose a significant hurdle to the bill’s advancement, particularly given the narrow GOP majority in the House.
We are closely monitoring this legislation and will continue to provide updates as more details emerge.
