# Understanding the SALT Fairness for Working Families Act

Right now, when you file your taxes, you can deduct state and local taxes you've paid—things like income taxes, property taxes, and sales taxes. But there's a cap on how much you can deduct. Currently, that limit is $10,000 per person (or $5,000 if you're married filing separately). This bill would raise that cap to $15,000 per person, or $30,000 for couples filing jointly.

This change matters most for people who live in states with higher taxes or who own expensive homes. If you live in a state like New York, California, New Jersey, or Illinois where state income taxes and property taxes are substantial, you're probably hitting that $10,000 limit right now. Raising it to $15,000 means you could deduct more of what you actually pay, which could lower your federal tax bill. For example, if you pay $14,000 in state and local taxes combined, you currently can only deduct $10,000. Under this bill, you could deduct the full $14,000.

The bill also includes an inflation adjustment starting in 2024, meaning the $15,000 limit would automatically increase each year to keep pace with rising costs. This prevents the cap from becoming outdated as inflation pushes tax bills higher. The changes would apply to taxes you file starting in 2023, so you could potentially benefit when you file your 2023 return. Keep in mind this is primarily a benefit for middle and upper-income earners who itemize deductions on their taxes, since lower-income households typically use the standard deduction instead.

SALT Fairness for Working Families Act

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 2023.