# Understanding the SALT Fairness for Working Families Act

Right now, when you file your federal taxes, you can deduct certain state and local taxes you've paid—things like state income tax, property taxes, and sales taxes. But there's a cap on how much you can deduct. This bill would raise that cap, meaning more people could reduce their taxable income by a larger amount.

Currently, the limit is $10,000 per person (or $5,000 if you're married filing separately). This bill would increase it to $15,000 per person, or $30,000 for married couples filing jointly. So if you live in a state with high income or property taxes, you'd be able to deduct more of what you paid, which lowers the amount of federal taxes you owe. For example, if you pay $18,000 in state and local taxes, you could now deduct $15,000 instead of $10,000, saving you money on your federal tax bill.

The bill also includes an inflation adjustment, meaning the $15,000 limit would automatically increase each year after 2021 to keep up with the cost of living. This prevents the deduction from losing value over time as inflation happens. The changes would take effect for taxes you file starting in 2021. This bill would primarily help middle and upper-middle-class families in high-tax states like New York, California, New Jersey, and Illinois, where state and local taxes tend to be significantly higher than the national average.

SALT Fairness for Working Families Act

Underwood, Lauren

SALT Fairness for Working Families Act This bill increases the limit on the individual income tax deduction for certain state and local taxes, which is currently $10,000 per year ($5,000 for a married taxpayer filing a separate return). The bill increases the limit to $15,000 (twice that amount in the case of a joint return) and requires the increased limit to be adjusted for inflation after 2021.