How has the SALT deduction cap changed and how does it affect high-tax-state residents?

The 2017 tax law capped the federal deduction for state and local taxes (income or sales, plus property) at $10,000, which hit residents of high-tax states like California, New York, and New Jersey hard. That cap was a major focus of 2025 tax legislation, and the amount and phase-in rules can change, so confirm the current cap and any income-based limits on irs.gov before you plan. Many states responded with pass-through entity (PTE) tax elections that let business owners deduct state tax at the entity level, effectively working around the individual cap — worth asking your accountant about if you own a partnership or S-corp. For most W-2 employees in high-tax states, the cap still limits itemizing, so run the standard-versus-itemized comparison each year rather than assuming.