The $10,000 limit on the federal deduction for state and local taxes, known as SALT, is set to expire on Dec. 31, 2025, without action from Congress. This issue is important for lawmakers in high-tax states and may change during talks about President Donald Trump’s policy plans.
Experts say that any increases in the SALT cap would mainly benefit higher earners who are more likely to itemize deductions. The $10,000 SALT cap was put in place as part of the Tax Cuts and Jobs Act (TCJA) of 2017. While Trump enacted the $10,000 SALT cap in 2017, he has promised to “get SALT back” if reelected.
He has renewed calls for reform since taking office. Several updates have been suggested, including a complete repeal, which seems unlikely due to other priorities. When filing taxes, people choose between the standard deduction or itemized deductions, including SALT capped at $10,000 and medical expenses above 7.5% of adjusted gross income.
The TCJA doubled the standard deduction starting in 2018, which adjusts for inflation each year. For 2025, the standard deduction is $15,000 for single filers and $30,000 for married couples filing jointly. Because of this high threshold, most filers use the standard deduction and don’t benefit from itemized tax breaks.
Usually, itemized deductions increase with income, and higher earners tend to owe more in state income and property taxes. In general, higher earners would benefit most from raising the SALT deduction limit. For example, one proposal involves increasing the cap on the SALT deduction for married couples filing jointly from $10,000 to $20,000.
Forty of the congressional districts most affected by the SALT limit are in states like California, Illinois, New Jersey, or New York, according to a Bipartisan Policy Center analysis. If the SALT cap were completely removed, households in these states would see nearly three-quarters of the benefit, according to a separate Tax Policy Center analysis from September. The potential changes to the SALT deduction limit remain a key issue for high-tax states, and the outcome of these talks will greatly affect higher earners who itemize deductions.
A handful of SALT members are willing to derail the reconciliation package and President Donald Trump’s domestic agenda if they don’t get a favorable SALT deal. “It is a hill I am willing to stake my entire congressional career on,” Rep. Nick LaLota (R-N.Y.) said, indicating his readiness to reject the package if the SALT cap isn’t adjusted to their liking.
The reconciliation package poses a problem for moderate House Republicans due to proposed cuts to Medicaid, SNAP, and other social programs.
Salt deduction cap sparks debate
SALT, however, is an immediate issue that Republicans have yet to resolve.
House Republican leadership has been negotiating with blue-state Republicans to establish a new SALT cap. However, representatives like Lawler, LaLota, and Reps. Andrew Garbarino (R-N.J.) and Young Kim (R-Calif.), are motivated to prolong these negotiations to secure the best possible deal.
Negotiations are currently stalled, with both sides failing to agree on who should make the first offer. The SALT Caucus believes their willingness to consider a cap is already a big concession, while Smith insists it’s not his responsibility to propose an initial figure. The ideal SALT cap varies across different districts, further complicating consensus.
“If I vote for a cap that I can’t sell at home, I might as well just pack up my office now,” Garbarino stated, emphasizing the political stakes involved. The continuing debate over SALT deductions highlights the complexities within the Republican Conference and sets the stage for challenging negotiations in the coming months. With President Donald Trump’s budget bill facing major challenges, five Republican representatives from wealthy suburban districts have united to oppose the bill’s survival prospects, driven mainly by concerns over property tax caps.
“We have our individual needs, but we recognize that our strength is in numbers. The more we stick together, the more effectively we can address our collective concerns,” said Rep. Nick LaLota (R-N.Y.).
This coalition includes LaLota, Mike Lawler (R-N.Y.), Young Kim (R-Calif.), and Thomas Kean (R-N.J.), all representing suburban districts in major U.S. metropolitan areas. These areas deal with high property taxes, making the state and local tax (SALT) deduction cap particularly important. The SALT deduction allows individuals or married couples to deduct up to $10,000 of their state and local taxes when filing federal taxes.
The cap is set to expire at the end of the year along with other provisions of Trump’s 2017 Tax Cuts and Jobs Act. For instance, Westchester County, New York, had an average property tax bill on single-family homes of $17,392 last year. New York’s Binghamton County had an effective tax rate of 3.19 percent, while the national average is 0.90 percent.
The blue state GOP group has a lot of power in this year’s reconciliation negotiations given the House GOP’s slim margins. Republican leaders cannot afford to lose support from more than three Republican lawmakers without making concessions to Democrats, who are largely opposed to Medicaid cuts. This developing alliance among wealthy suburban Republicans could indeed shape the fate of the current budget discussions.