Overview

• The House-approved One Big Beautiful Bill Act raises the federal SALT deduction cap to $40,000 for taxpayers earning up to $500,000 per year.
• Senate Majority Leader John Thune signaled that senators will trim the $40,000 cap to offset the legislation’s deficit impact.
• Representatives from high-tax states including New York, California and New Jersey have threatened to withhold support if the Senate alters the SALT provision.
• A Congressional Budget Office analysis found the bill would increase the deficit by $2.4 trillion over a decade, fueling calls to scale back SALT relief.
• The White House has pushed for mid-July passage to secure debt ceiling relief before an anticipated August breach.