One of the tallest hurdles House lawmakers had to overcome to pass The One, Big, Beautiful Bill involved the limit on the state and local tax (SALT) deduction. The Tax Cuts and Jobs Act imposed a $10,000 cap on the deduction. Lawmakers from higher-tax states have wanted to increase the limit (or eliminate it altogether) since the TCJA was signed into law. As passed by the House, the new bill increases the cap to $40,000 for 2025. If enacted, the limitation would phase out for taxpayers with incomes over $500,000. After 2025, the cap would increase by 1% annually through 2033. Keep in mind that the Senate version of the budget bill could alter this provision. Stay tuned.
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