After more than two hours of debate on Thursday, the House of Representatives passed a bill to temporarily repeal the $10,000 annual limit on state and local tax deductions.
The bill, the Restoring Tax Fairness for States and Localities Act, increases the tax deduction for state and local taxes in 2019 to $20,000 for married couples filing joint tax returns and eliminates the current $10,000 cap on the deduction in 2020 and 2021.
The bill also raises the above-line-deduction for teachers buying classroom supplies from $250 to $1,000 and provides a $1,000 deduction for first responders’ expenses.
Taxpayers earning over $100 million would not benefit from the higher SALT deduction cap. They would still be subject to the $10,000 cap, courtesy of a Republican-sponsored amendment.
The higher SALT deduction limit would be financed by an increase in the top marginal income tax rate from 37% to 39.6%, the rate that existed before passage of the 2017 tax cut legislation, but that change would be permanent.