The Facts on the SALT Deduction
The House Republican tax plan would eliminate a federal tax deduction for state and local income or sales taxes, and it modifies a deduction for state and local property taxes. The Senate bill eliminates the deductions entirely. These provisions have sparked criticism from lawmakers from states that would be largely affected.
Who uses the deduction and how would changing it affect them? We’ll take a look at the facts.
What is the state and local tax deduction?
Taxpayers who itemize their taxes can deduct state and local property and real estate taxes, and either state and local income or sales taxes. The ability to deduct nearly all state and local taxes was part of the federal income tax code when it was created in 1913. Some restrictions were put in place over the years, such as allowing either income or sales tax deductions, but not both. See the IRS guidelines on the deductions for more information.
The deductions for all of the state and local taxes is worth about $100 billion
