Skip to Main Content Back to Project Angel Food Homepage
We believe no one fighting critical illness should go hungry
Project Angel Food nourishes the health and spirit of vulnerable people facing critical and life-threatening illness, by preparing and delivering medically tailored meals with love, care and dignity.

Create an enduring legacy of compassion, healing and kindess

Create an enduring legacy of compassion, healing and kindess
and help us
Thrive with simple
Giving Strategies

Meet your philanthropic and financial goals while making a significant impact on our future.

Learn About Ways to Give

Giving Home > Giving News > Washington News > Increased State and Local Tax Deduction

Increased State and Local Tax Deduction

Published August 1, 2025

For many years, state and local income and property taxes (SALT) have been deductible by taxpayers who itemize. However, the SALT deduction limit was set at $10,000 by the 2017 Tax Cuts and Jobs Act (TCJA). This limit was a concern for members of Congress from states with substantial income taxes. Taxpayers in those states who face high state or local income taxes and significant taxes on their homes were not able to deduct the full amount of those tax payments.

After a stirring debate in Congress, a compromise was reached, and the SALT limit increased to $40,000 in 2025 and $40,400 in 2026. It will be scaled up by an additional 1% each year until 2029. This higher limit will permit most taxpayers who itemize to deduct their full state and local income tax and the property tax on their home.

The new $40,000 SALT limit applies for 2025 through 2029. However, high income taxpayers will have a reduced deduction. If your 2025 income is over $500,000, your deduction is reduced by 30% of the excess amount. A couple with joint income of $550,000 would have a reduction of 30% of the $50,000 excess. Their SALT limit would be reduced by $15,000 and they could deduct $25,000.

The increased SALT deduction may benefit taxpayers in all 50 states, but the largest benefit will be states with higher taxes. Some top states are New York, California, Connecticut, New Jersey, Illinois and Minnesota.

Editor’s Note: The increased SALT deduction will cause more taxpayers to itemize. Some friends of nonprofits may discover that the SALT increase and charitable “bunching” could be helpful. The charitable “bunching” strategy is to give double the amounts to charity in one year and itemize deductions. The next year, the donor uses the standard deduction. This will be especially popular for those who benefit from the new $6,000 Senior Deduction (added to the standard deduction).