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Speaker of the House Mike Johnson (R-LA) (L) talks with Rep. Andy Ogles (R-TN) as they leave the U.S. Capitol during a procedural vote on the One, Big, Beautiful Bill Act on July 2, 2025 in Washington, DC. <\/p>\n
Chip Somodevilla | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
House Republicans on Thursday approved<\/a> President Donald Trump<\/a>\u2018s \u201cone big beautiful\u201d bill, which includes changes<\/a> to the limit for federal deduction for state and local taxes<\/a>, known as SALT.<\/p>\n When you itemize tax breaks, you can claim the SALT deduction<\/a>, which includes state and local income taxes and property taxes.<\/p>\n Trump\u2019s 2017 tax cuts<\/a> added a $10,000 cap on the SALT deduction through 2025, which has been a key issue for certain lawmakers in high-tax blue states.\u00a0Before 2018, the SALT deduction was unlimited but curbed by the alternative minimum tax<\/a> for some wealthier households.<\/p>\n The Republicans\u2019 marquee legislation temporarily raises the SALT deduction limit to $40,000 starting in 2025. That benefit starts to phaseout, or decrease, for consumers who earn more than $500,000 of income. Both figures will increase by 1% yearly through 2029 and the higher limit will revert to $10,000 in 2030.\u00a0<\/p>\n More from Personal Finance:<\/strong> Compared to an earlier approved House bill, SALT deduction relief is two-thirds larger in Trump\u2019s legislation<\/a>, including alternative minimum tax changes, according to a Saturday analysis from the Committee for a Responsible Federal Budget.\u00a0<\/p>\n Trump\u2019s legislation also reduces itemized deductions for certain taxpayers in the top 37% income tax bracket<\/a>, which lowers the benefit of the bigger SALT cap for the highest earners.<\/p>\n<\/div>\n When filing taxes, you pick the greater of the standard deduction or your itemized deductions, which include SALT capped at $10,000, medical expenses above 7.5% of your adjusted gross income, charitable gifts<\/a> and others.<\/p>\n Starting in 2018, the Tax Cuts and Jobs Act doubled the standard deduction, and it adjusts for inflation yearly. For 2025, the standard deduction is $15,000 for single filers and $30,000 for married couples filing jointly. Under Trump\u2019s legislation, these standard deductions will increase to $15,750 and $31,500, respectively.<\/p>\n Under the current thresholds, the vast majority of filers \u2014 roughly 90%<\/a>, according to the latest IRS data \u2014 use the standard deduction and don\u2019t benefit from itemized tax breaks.<\/p>\n In 2022, the average SALT deduction was close to $10,000 in states like Connecticut, New York, New Jersey, California and Massachusetts, according to a Bipartisan Policy Center analysis<\/a> with the latest IRS data. Those high averages indicate \u201cthat a large portion of taxpayers claiming the deduction bumped up against the $10,000 cap,\u201d researchers wrote.<\/p>\n Meanwhile, the states and district with the highest share of SALT claimants were Washington, D.C., Maryland, California, Utah and Virginia, the analysis found.<\/p>\n<\/div>\n
What Trump\u2019s \u2018one big beautiful\u2019 tax-and-spending bill means for your money<\/a>
New Trump tax deductions may not carry big benefits for low earners<\/a>
Trump bill benefits rich, low earners would suffer from Medicaid, SNAP cuts<\/a><\/p>\nWho claims the SALT deduction<\/h2>\n