State and local tax deduction

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The state and local tax deduction (SALT deduction) is a United States federal itemized deduction that allows taxpayers to deduct certain taxes paid to state and local governments from their adjusted gross income.

The SALT deduction is intended to avoid double taxation by allowing taxpayers to deduct state and local taxes from their federal income tax. Eligible taxes include state and local income taxes and property taxes.^[1]

The deduction disproportionately benefits wealthy and upper-middle class taxpayers living in areas with comparatively high state and property taxes.^[2][3][4]

The Tax Cuts and Jobs Act of 2017 signed into law by President Donald Trump put a $10,000 cap on the SALT deduction for the years 2018–2025.^[5]

The Tax Policy Center estimated in 2016 that fully eliminating the SALT deduction would increase federal revenue by nearly $1.3 trillion over 10 years.^[6]