SALT deduction cap increased to $40,000 in new deal reached by Republicans. What to know
House Speaker Mike Johnson and a group of blue-state Republicans reached a tentative deal today to raise the cap for the state and local tax deduction, often referred to as the SALT deduction, to $40,000, Politico reported.
The increased cap is a key element of President Donald Trump's multi-trillion-dollar tax cut proposal.
Here's what to know.
What is the SALT deduction?
SALT refers to the ability to deduct taxes paid to state and local governments from an individual’s federal tax bill. This amount was previously capped at $10,000 by the 2017 Tax Cuts and Jobs Act, but would now be increased to $40,000 per household.
The deduction cap would be limited to taxpayers making below $500,000, with the income cap and deduction growing 1% every year over a ten-year window in the tentative new deal. The deduction would then remain fixed after the 10-year window without reverting to previous levels, according to Politico.
Property taxes in Illinois
Tax-rates.org found that Illinois has the 6th highest property tax rates in the country, with an average rate of 1.73%.
The website reported that the median property tax in Illinois is $3,507 per year for a home worth the median value of $202,200. The average income is $68,578 per year, making property taxes comprise, on average, 5.11% of a resident's income.
Andrea Riquier contributed to this article.