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U.S. Senate Majority Leader John Thune (R-SD) speaks at a press conference following the U.S. Senate Republicans\u2019 weekly policy luncheon on Capitol Hill in Washington, D.C., U.S., June 10, 2025. <\/p>\n
Kent Nishimura | Reuters<\/p>\n<\/div>\n<\/div>\n<\/div>\n
As Senate Republicans release key details<\/a> of President Donald Trump<\/a>\u2018s spending package, some provisions, including the federal deduction for state and local taxes<\/a>, known as SALT, remain in limbo.<\/p>\n Enacted via the\u00a0Tax Cuts and Jobs Act<\/a>, or TCJA, of 2017, there\u2019s currently a\u00a0$10,000 limit<\/a>\u00a0on the SALT deduction through 2025. Before 2018, the tax break \u2014 including state and local income and property taxes \u2014 was unlimited for filers who itemized deductions. But the so-called alternative minimum tax<\/a> reduced the benefit for some higher earners.<\/p>\n The Senate Finance Committee\u2019s proposed text<\/a> released on Monday includes a $10,000 SALT deduction cap, which is expected to change during Senate-House negotiations on the spending package. That limit is down from the $40,000 cap<\/a> approved by House Republicans in May.<\/p>\n More from Personal Finance:<\/strong> \u201cSALT has been contentious for eight years,\u201d said Andrew Lautz, associate director for the Bipartisan Policy Center\u2019s economic policy program.<\/p>\n Since 2017, the SALT deduction cap has been a key issue for certain lawmakers in high-tax states like New York, New Jersey and California. These House members have leverage during negotiations amid a slim House Republican majority.<\/p>\n Under current law, filers who itemize tax breaks can\u2019t claim more than $10,000 for the SALT deduction, including married couples filing jointly<\/a>, which is considered a \u201cmarriage penalty.\u201d<\/p>\n<\/div>\n However, raising the SALT deduction cap has been controversial. If enacted, benefits would primarily flow to higher-income households<\/a>, according to a May analysis from the Committee for a Responsible Federal Budget.<\/p>\n Currently, the vast majority of filers \u2014\u00a0roughly 90%<\/a>, according to the latest IRS data \u2014 use the standard deduction and don\u2019t benefit from itemized tax breaks.<\/p>\n<\/div>\n Plus, the 2017 SALT cap was enacted to help pay for other TCJA tax breaks, and some lawmakers support the lower limit for funding purposes.<\/p>\n In the Senate, \u201cthere isn\u2019t a high level of interest in doing anything on SALT,\u201d Senate Majority Leader John Thune said June 15 on \u201cFox News Sunday<\/a>.\u201d<\/p>\n \u201cI think at the end of the day, we\u2019ll find a landing spot, hopefully that will get the votes that we need in the House, a compromise position on the SALT issue,\u201d he said.\u00a0<\/p>\n But some House Republicans have already<\/a> pushed back<\/a> on the proposed $10,000 SALT deduction cap included in the Senate draft.\u00a0<\/p>\n Rep. Mike Lawler, R-N.Y., on Monday described the Senate proposed $10,000 SALT deduction limit as \u201cDEAD ON ARRIVAL\u201d in an X post<\/a>.<\/p>\n Meanwhile, Rep. Nicole Malliotakis, R-N.Y., on Monday also posted about the $10,000 cap on X<\/a>. She said the lower limit was \u201cnot only insulting but a slap in the face to the Republican districts that delivered our majority and trifecta.\u201d<\/p>\n<\/div>\n<\/div>\n\n
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IRS: Make your second-quarter estimated tax payment by June 16<\/a><\/p>\n<\/div>\nThe SALT deduction has been \u2018contentious\u2019<\/h2>\n
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