Full SALT Deduction Coming Back?
The House Ways and Means Committee has formally noticed a markup, to take place Wednesday, December 11, 2019, of legislation that addresses temporary restoration of the full deductibility of state and local taxes. For the 2019 tax year, the marriage penalty associated with the $10,000 limitation on state and local tax deductions, which limits married couples filing jointly to $10,000 of SALT deductions, would be eliminated. For tax years 2020 and 2021, the $10,000 limitation would be eliminated entirely for all taxpayers.
To offset the cost of these measures in the Act (named the “Restoring Tax Fairness for States and Localities Act”), a provision would restore the top individual income tax rate from 37% to 39.6%, the level in effect prior to the Tax Cuts and Jobs Act of 2017.