New tax law raises SALT deduction cap to $40,000, benefiting homeowners in high-tax states.

The new tax law increases the SALT deduction cap from $10,000 to $40,000 for 2025, with annual 1% increases until 2029. This benefits homeowners in high-tax areas and those with a modified adjusted gross income (MAGI) under $500,000. For MAGI between $500,000 and $600,000, the deduction is reduced by 30% for every dollar over $500,000, while those above $600,000 are capped at $10,000. Non-itemizers and some pass-through entity partners may not benefit as much.