Three States That May See Bigger Tax Refunds Because of Trump Change
Summary
President Trump’s administration increased the state and local tax (SALT) deduction cap from $10,000 to $40,000. This change means people in high-tax states like New York, New Jersey, and California might get bigger tax refunds this year. The increase could save taxpayers in these states thousands of dollars.Key Facts
- The SALT deduction cap increased from $10,000 to $40,000 under President Trump’s new tax law.
- This change benefits taxpayers in New York, New Jersey, and California the most, where state and local taxes are high.
- Tax bills in these states could be reduced by $1,000 to $3,000 because of the new deduction cap.
- Couples that maximize the deduction could see up to $9,600 cut from their taxes.
- Taxpayers with incomes up to $500,000 can claim the full $40,000 deduction, while those earning $600,000 or more are limited to a $10,000 deduction.
- The new deduction rules provide a total of $32.2 billion in tax savings.
- The change aims to allow residents to write off more of their local taxes, potentially preventing migration to states with lower taxes.
- The long-term impact of the change is uncertain and may affect federal revenue.
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