# The SALT Act: What It Actually Does

The SALT Act is primarily about letting people deduct more of their state and local taxes from their federal income taxes. Right now, there's a $10,000 annual cap on how much you can deduct for state and local taxes combined—whether that's income tax, property tax, or sales tax. This bill would remove that cap entirely, meaning if you pay $15,000 in state and local taxes, you could deduct all $15,000 instead of being limited to $10,000. This mainly helps people in high-tax states like New York, New Jersey, and California, where state and local taxes are significantly higher than the national average.

The bill also includes some smaller provisions that help specific groups of workers. Teachers would get to deduct up to $1,000 in classroom expenses instead of the current $250 limit—money they spend out of pocket on supplies and materials. First responders like police officers, firefighters, and paramedics would get a new $1,000 deduction for professional development courses and uniforms they buy themselves. These changes would apply to tax years starting in 2018.

Finally, the bill raises the top income tax rate from 37% back to 39.6% for the highest earners, which was the rate before 2017. This would affect individuals earning over roughly $479,000 and married couples earning over $600,000, depending on filing status. The bill essentially reverses some of the tax cuts from 2017 for the wealthiest Americans while making it easier for middle and upper-middle class people in high-tax states to deduct their state and local taxes.

SALT Act

Pascrell, Bill

Stop the Attack on Local Taxpayers Act of 2021 or the SALT Act This bill repeals the limitation on the deductibility of state and local taxes during 2018-2025. It also increases from $250 to $1,000 the tax deduction for certain expenses of elementary and secondary school teachers and allows a deduction from gross income (above-the-line) for certain training and uniform expenses of first responders (i.e., individuals who are law enforcement officers, firefighters, paramedics, or emergency medical technicians for at least 1,000 hours during a taxable year). The bill expands individual income tax brackets and increases the top income tax rate for individual taxpayers to 39.6%.