The Tax Cuts and Jobs Act of 2017 included a provision that, at most, limits an individual’s itemized federal deduction for state and local taxes to $10,000 (the SALT limitation). The provision is in effect for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026.
At this time, Congress hasn’t enacted legislation to extend the provision; therefore, the SALT limitation will expire in 2026. States tried a variety of workarounds, such as creating a system whereby taxpayers could classify state taxes as a form of charitable contribution. The IRS rejected all these efforts. Eventually, states found a workaround that the IRS allowed.
