Summary
Some homeowners in the U.S. could save on taxes thanks to a change in the SALT cap, which allows higher deductions for state and local taxes. This benefit is mostly for homeowners in states with high taxes like New York and California. The changes begin gradually in 2026 and benefit high-income areas the most.
Key Facts
- The SALT cap limits how much state and local taxes people can deduct from federal taxes.
- As of 2025, the SALT cap will let married couples filing separately deduct up to $20,000, and everyone else up to $40,000.
- Incomes over $500,000 will lower these deductions starting in 2025.
- States with high income and property taxes benefit most from this change.
- The District of Columbia has the highest share of homeowners benefiting, at 97.9%.
- Homeowners in New York could save around $7,092 a year due to the higher cap.
- Texas and Louisiana benefit more from sales tax deductions since they have low or no state income tax.
- Homeowners in Tennessee and Nevada, states without income tax, see little benefit, with savings around $1,090 to $1,097.
