You might have heard that tax reform is coming in 2025. And one of the big issues on the table? The state and local tax deduction, also known as the SALT deduction. President Donald Trump, back in political power with Republicans in control of Congress, has said he’d like to see changes to the $10,000 cap placed on SALT during his first term in office.
Let’s break down what this could mean for you and your tax bill.
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What is the SALT deduction, and why does it matter?
The SALT deduction lets you subtract certain state and local taxes (like income or property taxes) from your federal taxable income if you itemize deductions.
- In 2017, the Tax Cuts and Jobs Act (TCJA) capped this deduction at $10,000.
- This cap mostly hit people in high-tax states like New York, New Jersey, California, and Connecticut.
- Even some red states like Texas were affected, although the issue is often painted as a “blue state” concern.
For example, in Connecticut, the average SALT deduction before the cap was $20,900. After the cap, it dropped to about $9,700 — a nearly 58% drop.
Trump’s new take on SALT
Yes, Trump signed the original SALT cap into law. But now, he says he wants to reverse course.
- During his 2024 campaign, Trump said he wants to “get SALT back.”
- In recent comments, he confirmed that changing the SALT cap would be part of a broader 2025 tax reform package.
- The package could also include policies on border security and other major issues.
His shift on SALT reflects growing pressure from Republican lawmakers in high-tax states who want relief for their constituents.
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What’s on the table for 2025?
The U.S. House of Representatives recently proposed a new SALT cap structure:
- $30,000 cap for married couples earning up to $400,000
- $15,000 cap for single filers earning up to $200,000
- Above those income levels, the deduction would phase down, but never fall below the current $10,000 (married) or $5,000 (single) cap
Rep. Jeff Van Drew (R-N.J.) said, “$30,000 is fine for me. That’s where I think it ends up.”
“No SALT, no deal”—a GOP rallying cry?
Several Republicans are saying they won’t vote for any tax package that doesn’t include SALT cap relief.
- Rep. Mike Lawler (R-N.Y.): “I will not endorse a tax proposal that does not remove the cap on SALT.”
- Rep. Tom Suozzi (D-N.Y.), known as “Mr. SALT,” also pushes hard for full repeal.
The price tag
There’s a catch — and it’s a big one:
- Repealing the SALT cap entirely could cost $1.2 trillion over 10 years
- Making the TCJA permanent (another Trump goal) would cost $4 trillion over a decade
That’s why some conservatives are hesitant — they want to keep an eye on deficits and federal revenue.
What could change next?
You may see one of these scenarios:
- The $10,000 cap remains, but increases to $20,000 for married couples
- Congress adopts the proposed $30,000 cap for couples (and $15,000 for individuals)
- A total restructuring that only allows certain local taxes (like property taxes) without a cap
Bottom line for you:
If you live in a high-tax state or have large property tax bills, the SALT cap changes in 2025 could make a big difference to your tax return.
Keep an eye on Congress and President Trump’s next move.
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