The SALT Deduction Is Now Much More Generous. Here’s How to Get the Most Out of the Tax Break.

A deduction to defray homeowners’ state income taxes and local property taxes is getting much more generous, following fierce debate among lawmakers in Washington.

The focus on the write-off is now coming from homeowners deciding if they should use the deduction to their advantage for the first time in years. 

The state and local tax deduction, often referred to as SALT, was quadrupled in President Donald Trump’s One Big Beautiful Bill Act, which he signed into law on July 4. 

The deduction is rising to at least $40,000 from its current $10,000 limit. That amount will increase each year through 2029, and then it will revert to the $10,000 cap put in place under the Republican tax-code overhaul that Trump signed into law in the first year of his earlier White House term.

The new law stipulates that only people below certain income limits can claim the full SALT deduction.

The changes come at a time when property taxes are rising sharply, creating a pain point for many homeowners. Other parts of the sweeping bill may limit what states can do to take the sting from higher local property taxes. The more generous SALT deduction is a temporary victory for homeowners living in states with heavier tax burdens — as long as they can make the most of the new rules.

“To the average Joe that pays a certain amount of property tax, it’s going to be really important, and it’s going to change their deduction strategy,” said Leo Varner, a managing director at UHY who leads the consulting firm’s SALT practice. “It adds some complexity you have to consider.”

Homeowners will have to think hard about whether the higher cap on the deduction makes it worthwhile for them, and they’ll have to start learning fast: These new SALT rules apply to 2025 income-tax returns, which most households will file in early 2026.

Read the full article published by MarketWatch.