What Is the SALT Deduction, and How Does It Benefit You?

The SALT deduction is a tax deduction to relieve Americans from high local taxes.

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The 2017 Tax Cuts and Jobs Act (TCJA) changed the state and local tax (SALT) deduction. It put a lower cap on the deduction. But the One Big Beautiful Bill Act, which the U.S. House of Representatives recently passed and is now before the Senate, is set to raise that cap.

But what exactly is the SALT deduction, and how does a lower or higher cap affect American taxpayers?

What Is SALT Deduction?

The SALT deduction allows taxpayers who itemize tax deductions to deduct certain state and local taxes from their taxable income on their federal tax return.