H.R. 7160, the SALT Marriage Penalty Elimination Act, was passed out of the House Rules Committee today. If enacted, the bill would increase the current $10,000 state and local tax (SALT) itemized deduction limitation to $20,000 for married taxpayers filing jointly if their adjusted gross income is less than $500,000.
As currently written:
- The increase would apply only to the 2023 tax year; and
- The $500,000 AGI threshold would be a cliff, meaning that MFJ taxpayers with $500,000 or more of AGI would still be limited to the $10,000 deduction.
The bill must still be passed by both the full House and the Senate. We will provide updates as both this legislation and the Tax Relief for American Families and Workers Act of 2024 (H.R. 7024) move along. In the meantime, tax professionals should consider putting potentially impacted clients’ returns on extension.
The text of H.R. 7160 is available at:
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