When considering the extension of the SALT cap in 2025, it’s important to understand the interaction between the SALT cap and the AMT exemption.
TOPLINE TAKEAWAYS:
- High-income taxpayers in high-tax states already faced a cap on their SALT deductions prior to the TCJA because the AMT limited their SALT deduction at a lower level than most realize.
- As a result, combining the TCJA’s higher AMT threshold and a more generous SALT cap could allow itemizers in high-tax states to deduct more SALT than they ever could.
- Families in high-tax states pay lower taxes under the One Big Beautiful Bill (OBBB)– considering the totality of the changes – than if the TCJA were allowed to expire. This includes the vast majority of taxpayers earning $250,000 to $500,000.
First Published on May, 1, 2025.
