The $40,000 cap would begin this year, with the same $500,000 income phaseout, and both figures would rise by 1% annually from 2026 through 2033.

The proposed ‘One Big Beautiful Bill Act’ would raise the SALT deduction cap to $40,000, benefiting wealthier taxpayers in high-tax states. Critics warn it could widen inequality and reduce federal revenue.

Senate Republicans passed changes to the federal deduction for state and local taxes, known as SALT. Here's how the SALT deduction cap would affect you.