President Donald Trump 's "big beautiful bill" raised the state and local tax deduction, known as SALT, to $40,000 for 2025. The change comes less than a decade after a cap was placed on this tax break for the first time in its history.

Taxpayers who itemize tax breaks can claim the SALT deduction, which includes state and local income taxes and property taxes. Trump's 2017 legislation capped SALT at $10,000. Before 2018, the deduction was unlimited — but curbed by the alternative minimum tax for some wealthier households.

"This was in effect for over 100 years prior to the 2017 passage of the Tax Cuts and Jobs Act," said Rep. Mike Lawler, R-N.Y., who led the push on Capitol Hill for the higher cap.

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