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Senate Republican Tax Bill Passes ‘SALT’ Deduction Cap of $40,000. Here’s Who Benefits

  • The U.S. Senate passed President Trump's tax and spending bill on July 1, 2025, expanding the SALT deduction cap to $40,000 starting in 2025.
  • This expansion follows the 2017 Tax Cuts and Jobs Act, which set a $10,000 SALT cap through 2025, and the increase will phase out for taxpayers earning over $500,000.
  • The bill includes a special loophole allowing high-income private business owners to bypass the SALT cap, primarily benefiting wealthier taxpayers in high-tax states.
  • Rep. Mike Lawler called the deal a "big win" providing significant SALT relief, while critics warned it will increase deficits, harm economic growth, and mortgage the future.
  • The Senate bill now awaits House approval before final reconciliation, with the SALT caucus threatening to oppose any reduction of the $40,000 cap.
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USA Today broke the news in United States on Tuesday, July 1, 2025.
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