SALT Deductibility Act H.R. 513/ S. 85

John Darer • February 6, 2021

State and Local Taxes May Soon Be Deductible Again

Tax deduction for State and Local Taxes
HR613 and S.85 are Bills in the United States House of Representatives, known as the Securing Access to Lower Taxes by ensuring Deductibility Act (SALT Deductibility Act) . The bills, if passed, would repeal the limitation on federal tax deduction for payment of State and Local taxes. Specifically IRC 164(b) would be amended by striking paragraph (6).

The federal tax reform law known as the Tax Cuts and Jobs Act passed on Dec. 22, 2017 established a limit on the amount of state and local taxes (SALT) that can be deducted on a federal income tax return. Beginning in 2018, the itemized deduction for state and local taxes paid was capped at $10,000 per return for single filers, head of household filers, and married taxpayers filing jointly. The cap is $5,000 for married taxpayers filing separately. In prior years, taxpayers who itemized on their federal income tax return could deduct amounts paid for state and local income (or sales) and property taxes in full.
Thus taxpayers were incentivized to prepay state and local taxes by December 31st to get a deduction, rather than waiting until April 15th, which is also helpful to the state and local governments.

The National Governors Association is a bipartisan organization of the nation’s governors, whose consensus-based process drives gubernatorial development of the association's policy guidelines, has held a longstanding positions favoring preservation of state and local tax deductibility (SALT). Advocates of the deduction asserted in 2017 that eliminating it would constitute double taxation. 

The House bill was introduced by Queens New York Congressman Thomas Suozzi and the Senate bill by New York Senator and Senate Majority Leader Charles Schumer (D-New York), along with Senators Ron Wyden (D-Oregon), Menendez (D-New Jersey), Gillibrand  (D-New York), Booker (D-New Jersey) , Durbin  (D-Illinois) and Duckworth (D-Illinois).

Be mindful that there are likely to be higher taxes in the future and for those that itemize, a deduction for State and Local taxes will take away some of the sting.



independent life structured settlement annuities
By John Darer March 16, 2025
In the structured settlement annuity industry, dominated by many of the largest life insurers in the United States, Independent Life Insurance Company (ILIC) achieved significant milestones in 2024. Good news, positives and some concerns discussed in this lattest post.
Prudential and Pacific Life are among the world's most ethical companies
By John Darer March 13, 2025
Prudential and Pacific Life have once again been named among the world's most ethical companies. Prudential received the award for the 11th time., Pacific Life received the award for the 8th time. Prudential and Pacific Life are leading issuers of structured settlement annuities.
structured settlement annuity market expansion 2025
By John Darer March 13, 2025
John Darer reviews structured settlement annuity market expansion featuring 3 new entrants Athene Life & Annuity, American National (ANICO) and Puritan Life as well as MetLife's development of a best in class
settlement agreement and release
By John Darer February 11, 2025
What is a Settlement Agreement and Release? What is the role of a Settlement Agreement and Release in establishing a structured settlement? What is a compromise?
structured settlement market explained
By John Darer February 11, 2025
John Darer reviews the primary structured settlement market, secindary market and tertiary structured settlement markets
tax free structured settlement annuity
By John Darer February 7, 2025
A structured settlement annuity does not drive the tax consequences of structured settlement annuity payments. It is the type of damages the structured settlement annuity payments represent, as reflected in the relevant settlement documentation executed by the settling parties
structured settlement beneficiary
By John Darer January 29, 2025
Structured settlement beneficiary death claim. An executor cannot change the beneficiary of a structured settlement annuity. StructuredTypically, settlement agreements permit the Payee to name or change a beneficiary, provided such change is in writing and submitted to the Assigmment Company or annuity issuer in writing and in proper form.
new york structured settlements, new york city structured settlements, nyc structured settlement cos
By John Darer January 23, 2025
Which life insurance companies write structured settlement annuities for personal injury and wrrongful death settlements in Bronx, Brooklyn, Staten Island, Queens, Manhattan, Long Island, Westchester, Erie, Rockland, Albany,Monroe in 2025 through licensed representatives?
structured settlement annuities
By John Darer January 8, 2025
Why Structured Settlements? Because Certain Sells® Structured settlements offer predictable income streams, which can be appealing to rein in uncertainty. John Darer reviews some other reasons that structured settlements are increasingly being used to settle cases:
structured settlements history
By John Darer December 13, 2024
Structured settlements have roots that trace back more than 100 years, from 1918, when Congress exempted damages for personal injury or sickness from income tax, to the establishment of structured settlements as the core personal injury settlement planning tool it is today.
More Posts