State and local tax deduction

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

The SALT deduction intent is to avoid double taxation by allowing taxpayers to deduct state and local taxes from their federal income. It disproportionately benefits wealthy and high-earning taxpayers in areas with comparatively high state and local taxes.[1][2][3]

The Tax Cuts and Jobs Act of 2017 put a $10,000 cap on the SALT deduction for the years 2018–2025.[4] 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.[5]

  1. ^ Rappeport, Alan; McGeehan, Patrick (18 November 2021). "Tax Deduction That Benefits the Rich Divides Democrats Before Vote". The New York Times. Archived from the original on March 3, 2022.
  2. ^ Pulliam, Christopher; Reeves, Richard V. (September 4, 2020). "The SALT tax deduction is a handout to the rich. It should be eliminated not expanded". Brookings Institution. Archived from the original on November 10, 2021. Retrieved November 11, 2021.
  3. ^ Bellafiore, Robert (October 5, 2018). "Who Benefits from the State and Local Tax Deduction?". Tax Foundation. Archived from the original on October 8, 2021. Retrieved November 11, 2021.
  4. ^ Cite error: The named reference :6 was invoked but never defined (see the help page).
  5. ^ Sammartino, Frank; Rueben, Kim (March 31, 2016). "Revisiting the State and Local Tax Deduction" (PDF). Tax Policy Center. Archived (PDF) from the original on November 6, 2021. Retrieved November 11, 2021.

From Wikipedia, the free encyclopedia · View on Wikipedia

Developed by Nelliwinne