SALT Deduction Cap

About SALT Deduction Cap

The Tax Cuts and Jobs Act of 2017 capped the state and local tax SALT deduction at 10,000. Previously, taxpayers could deduct all state and local income, property, and sales taxes. The cap primarily affected taxpayers in high tax states like California, New York, New Jersey, and Connecticut. The SALT cap was estimated to generate approximately 600 billion over 10 years, helping to offset the cost of the corporate tax cut. Governors and members of Congress from affected states have fought to repeal or raise the cap. The cap became a major political issue in suburban districts. Some states created workaround charitable funds, but the IRS issued regulations limiting these. The SALT cap remains one of the most contentious provisions of the TCJA.