June 25, 2025
The state and local tax deduction, a write-off that primarily benefits higher-income Americans living in high-tax areas, is one of the most disputed provisions of Trump’s tax bill.
Answer five simple questions about your taxes to see your estimated gain under the bill approved in the House and currently being revised in the Senate, which raises the SALT cap from $10,000 to $40,000.
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A higher SALT cap overwhelmingly benefits more affluent Americans. Under the House bill, for instance, a married couple in Washington, DC is unlikely to receive any money back if their income is below $200,000.
Households Earning Up to $500K Would Get Thousands More Back under House Bill
Tax benefits for a Washington, DC married couple at $10K vs $40K SALT cap
Source: Committee for a Responsible Federal Budget
Note: Estimates based on a married couple filing jointly in Washington, DC who own a home worth five times their annual income and has combined charitable and mortgage interest deductions worth 12% of income. All references to income represent the adjusted gross income.
The lopsided benefits of a bigger SALT write-off have made it one of the most contentious pieces of Trump’s tax bill. The gains disproportionately go to wealthy residents of blue states, where state and local taxes tend to be higher. This makes an increased cap unpopular to most Republicans.
But in a tight House where few votes can be spared, a handful of Republicans from swing districts in New York, New Jersey and California have staked their support of the bill on a higher deduction for state and local taxes.
Blue Districts Gain More From SALT Cap Hike
Average SALT paid per itemized return in congressional districts
Source: Internal Revenue Service Statistics of Income Division ZIP Code data
Note: As of 2022 tax year. ZIP Codes that overlap multiple districts are weighted in proportion to land area.
The Senate bill currently places the SALT cap at $10,000, a placeholder while negotiations continue. Several House Republicans have threatened to block the bill if the cap is reduced.
Some compromise may be found in maintaining the $40,000 cap but lowering the income threshold, but SALT remains one of the crucial holdouts for the tax bill’s passage.
By Christopher CannonCedric Sam Editors: Kate Rabinowitz With the assistance of: Mathieu Benhamou
Methodology
The estimated gain is solely from the increased SALT deduction for 2025 and does not take into account other provisions in the tax bill, many of which are not slated to go into effect until 2026. The calculation assumes no other itemized deductions are taken beyond those shown. The mortgage interest rate deduction only covers interest on the first $375,000 of a mortgage for those married filing separately and $750,000 for everyone else. We’ve capped the interest paid at $40,000 for those married filing separately and $80,000 for everyone else. The charitable giving deduction is capped at 60 percent of the adjusted gross income. The SALT deduction begins to phase down for joint incomes of $500,000 and individual incomes of $250,000. To calculate the rate of phase down, it is assumed that adjusted gross income and modified adjusted gross income are the same.
