'SALT' deduction in limbo as Senate Republicans unveil tax plan for Trump's spending package
Source: NBC News/CNBC
June 16, 2025, 6:17 PM EDT / Source: CNBC
As Senate Republicans release key details of President Donald Trump’s spending package, some provisions, including the federal deduction for state and local taxes, known as SALT, remain in limbo.
Enacted via the Tax Cuts and Jobs Act, or TCJA, of 2017, there’s currently a $10,000 limit on the SALT deduction through 2025. Before 2018, the tax break — including state and local income and property taxes — was unlimited for filers who itemized deductions. But the so-called alternative minimum tax reduced the benefit for some higher earners.
The Senate Finance Committee’s proposed text 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 approved by House Republicans in May.
The SALT deduction has been 'contentious'
“SALT has been contentious for eight years,” said Andrew Lautz, associate director for the Bipartisan Policy Center’s economic policy program. 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.
Read more: https://www.nbcnews.com/business/personal-finance/salt-deduction-limbo-senate-republicans-unveil-tax-plan-trump-bill-rcna213358