# SALT Deduction Fairness Act

This bill would remove the $10,000 cap on the State and Local Tax (SALT) deduction that currently limits how much you can deduct from your federal income taxes for state and local taxes you've paid. Right now, if you pay more than $10,000 in combined state income taxes, property taxes, and sales taxes, you can only deduct $10,000 of that amount when calculating your federal taxes. This bill would eliminate that cap entirely, allowing you to deduct the full amount of state and local taxes you pay.

The main impact would be on higher-income earners and people living in states with high tax rates, particularly in places like California, New York, New Jersey, and Connecticut. If you live in a high-tax state and earn a substantial income, removing this cap could mean a larger tax deduction, which would lower your federal tax bill. For example, someone paying $25,000 in state and local taxes could deduct the full amount instead of just $10,000, potentially saving hundreds or thousands of dollars on their federal taxes. However, most middle and lower-income Americans wouldn't see much benefit since they typically don't pay more than $10,000 in state and local taxes anyway.

The trade-off is that removing this cap would reduce federal tax revenue, meaning less money for the government unless other taxes are raised or spending is cut elsewhere. Critics argue this primarily benefits wealthy people in high-tax states, while supporters say it's unfair to tax people twice on the same income—once at the state level and again at the federal level.

SALT Deduction Fairness Act

Collins, Susan M.

SALT Deduction Fairness Act This bill increases the limitation on the deduction for state and local taxes to $20,000 for individuals filing a joint tax return. The limitation applies to taxable years 2018 through 2025.