The SALT cap went from $10,000 to $40,000. It costs $142 billion, and two-thirds of the benefit goes to households earning over $200,000.

Since 2018, taxpayers who itemize could deduct only $10,000 a year in state and local taxes — property, income, and sales taxes combined — no matter how much they actually paid.▸ The One Big Beautiful Bill Act, signed July 4, 2025, quadrupled that number to $40,000, rising 1% a year through 2029 before the whole increase reverts to $10,000 in 2030. By the Joint Committee on Taxation's own scoring, the five-year bulge costs the Treasury $142.4 billion over the decade. Here is who the deduction was already reaching before the increase, and who it reaches now.

The mechanism sits in 26 U.S.C. § 164: a taxpayer who itemizes deducts state and local taxes paid, but the total is capped.▸ Under the enacted law, the cap is $40,000 for 2025, rising 1% a year through 2029, and phased down at 30 cents per dollar of modified adjusted gross income above $500,000 — floored so no itemizer's deduction falls below $10,000. In 2030 the entire increase expires and the cap reverts, permanently, to the original $10,000. The Joint Committee on Taxation scored this five-year window — Item 20 of its "Title VII – Finance" estimate, against a baseline that already assumes the $10,000 cap was permanent — at -$142.4 billion in federal revenue from FY2025 through FY2034, front-loaded almost entirely into 2026–2030.

A cap only binds a taxpayer whose eligible state and local taxes exceed it — which means raising the cap only helps taxpayers who were already paying more than $10,000 a year in SALT.▸ That group is concentrated at the top of the income distribution. Per the Congressional Research Service's compilation of Joint Committee on Taxation tax-expenditure estimates, filers earning $200,000 or more were 11.5% of all returns in 2024 and collected 65.1% of the SALT deduction's tax-savings benefit under the pre-increase $10,000 cap. Filers earning $50,000–$199,999 were 48.6% of returns and got 34.3%. Filers under $50,000 — 39.9% of all returns — got 0.6%. Because the OBBBA's increase only extends benefit to filers who were already capped out at $10,000, its own distribution skews at least this concentrated, and likely more.

The same IRS data, run by the Congressional Research Service, shows the cap's effect varies more than 20-fold by state.▸ For each filer who claims the SALT deduction, the gap between what they paid in eligible state and local taxes and what the $10,000 cap actually let them deduct averaged $16,600 nationwide in tax year 2022 — but $43,200 in New York, more than 20 times the $1,900 gap in Alaska. High-tax, high-income coastal states dominate both ends of the comparison: New York, Connecticut, California, D.C., New Jersey, and Massachusetts all sit well above the national average.

Income-distribution figures describe the SALT deduction's benefit under the pre-2025 $10,000 cap (tax year 2024, JCT tax-expenditure estimates) — the best available benchmark for who the deduction reaches, since no post-increase distributional score has yet been published; the increase's own benefit is very likely more concentrated still, since it only reaches filers who exceeded $10,000 in the first place.