Do Not Renew SALT Deduction Cap, South Brunswick Tells Lawmakers
SOUTH BRUNSWICK, NJ – On Wednesday, the Council adopted a resolution calling for Congress to restore the full State and Local Tax Deduction (SALT) after it expires next year.
SALT is for taxpayers who itemize their deductions to reduce federally taxable income. Taxpayers can deduct up to $10,000 of property, sales, or income taxes they have already paid to local and state governments using the SALT deduction.
Known as the SALT "cap," this applies to tax years 2018 to 2025 and will expire after 2025.
"From the start, this cap was unfair to taxpayers in New Jersey. Annual property & state income tax bills together can easily exceed $10,000 in New Jersey for the average single-family household," Mayor Charlie Carley said.
"It really amounts to being double taxed on the money one has to earn in order to pay their taxes. With the cap set to expire next year, it is time for Congress to commit to not renewing it in the future."
According to Thompson Reuters, the SALT deduction can be attractive for taxpayers in high-tax states because it avoids double taxation.
But capping the SALT deduction has placed an unfair burden on New Jersey homeowners, the South Brunswick resolution said.
"The SALT deduction cap presents a barrier to affordable homeownership in New Jersey, impacting the ability of new, young families to prosper in the future and seniors to remain in their homes," according to the resolution.
The 2017 tax overhaul passed during President Donald Trump's tenure at the White House limited the deduction to $10,000.
It hit Democratic-led states like New York, New Jersey, and California the hardest. It was decried by the Republican and Democrat lawmakers alike in these states as it hurt their constituents. But it still passed the Republican-led Congress at the time.
The Treasury Department estimated that almost 11 million taxpayers in high-tax states like New York and New Jersey would forfeit $323 billion in deductions, CBS News reported .
On Tuesday, Trump suggested he would scrap the deduction cap. He made the statement on X ahead of his speech in Long Island.
Many Republicans in battleground districts are also backing a change to this provision as their razor thin margin at the House is at stake come November.
A copy of the resolution adopted by South Brunswick was sent to Sen. Cory Booker, Sen. George Helmy, Congresswoman Bonnie Watson Coleman, Gov. Phil Murphy, Senate President Nicholas Scutari, Assembly Speaker Craig Coughlin, Sen. Andrew Zwicker, Assemblyman Roy Freiman, Assemblywoman Mitchelle Drulis and the New Jersey State League of Municipalities.
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