Great news! State & Local Tax deduction has increased!
The One Big Beautiful Bill Act (“OBBBA”) brings tax relief for taxpayers who itemize their tax deductions. Since 2018, taxpayers have been limited to a maximum $10,000 deduction on their federal individual income tax return for state income taxes and property taxes (SALT) paid.
Effective for tax years beginning after December 31, 2024, eligible taxpayers may now qualify for:
Up to $40,000 of SALT deductions:
The OBBBA increases the SALT deduction limit for 2025 from $10,000 to $40,000 for those who itemize deductions on their federal return, with an increase to $40,400 for 2026. Also, the bill provides for additional annual increases for 2027 through 2029.
Caution – there are phase outs of this deduction:
The SALT deduction has a phase out for taxpayers with a Modified Adjusted Gross Income greater than $500,000 for married filing joint filers ($250,000 for all others).
Tax Planning is Key
The OBBBA provides the increased SALT deduction for a five year period and reverts back to $10,000 in 2030.
Our NCA tax professionals are available to explore how this new law change may best benefit you. Please give us a call or send us an email if you would like to schedule a time to discuss.