Must still be approved by Senate
With support from Rep. Sean Patrick Maloney, whose district includes the Highlands, the U.S. House on Dec. 19 passed legislation, 218-206, that would raise the $10,000 cap on the state and local tax deduction implemented by a change in federal tax law in late 2017.
The Restoring Tax Fairness for States and Localities Act, which must be taken up and passed by the Senate and signed by the president to become law, would increase the SALT deduction limit to $20,000 for those filing a joint tax return for 2019 and eliminate the cap on the deduction in 2020 and 2021.
Critics say the cap unfairly affects residents of New York and other high-tax states. The Tax Foundation estimates that removing the cap would reduce federal tax revenue by $177 billion over two years.
The act also would double deductions for teachers for out-of-pocket expenses such as supplies to $500 and creates a new $500 deduction for unreimbursed expenses for first responders such as for uniforms or training.
In addition, the bill would return the top marginal tax rate to from 37 percent to 39.6 percent in 2020 and reduce the dollar amount at which the rate begins to its previous levels through 2025.
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