The federal deduction for state and local taxes (SALT) has been part of the U.S. tax code for over a century. The tax break allows eligible taxpayers to reduce their federal tax liability by deducting certain state and local taxes.
But the limit on SALT deductions (the SALT cap) has changed under the 2025 tax and spending bill (Public Law 119‑21), signed into law by President Donald Trump on July 4.
