Search

House Democrats' stimulus bill rolls back $10,000 SALT cap for 2 years - CNBC

sulionjaka.blogspot.com

U.S. Representative, Nancy Pelosi (D-CA) at the ceremonial swearing in of Representative Elect Kweisi Mfume (D-MD).

Michael Brochstein | Barcroft Media | Getty Images

A new coronavirus relief bill has been proposed — and it will restore a big chunk of the state and local tax deduction for two years.

House Democrats released the text Tuesday for its latest proposed Covid-19 relief measures.

The $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act — or HEROES Act — calls for another round of economic stimulus payments to Americans, plus enhancements to the employee retention tax credit.

More from Smart Tax Planning:
White House weighs pushing tax deadline to September

States need revenue. These taxes could rise
How are unemployment benefits taxed?

Tucked away in the bill is a measure that will reinstate the so-called SALT itemized deduction for 2020 and 2021.

The Tax Cuts and Jobs Act, which went into effect in 2018, limited the amount of state and local tax deductions filers could claim on their tax returns to $10,000.

This write-off includes income taxes paid at the state and local level, so it hit taxpayers in high-tax states the hardest.

New Yorkers who itemized deductions in 2017 and claimed a SALT write-off took an average deduction of $23,804, according to the Tax Policy Center.

The new proposal doesn't specify what's supposed to happen after 2021.

Under the original language of the Tax Cuts and Jobs Act, the SALT cap is supposed to remain in place from 2018 to the end of 2025, when most of the individual provisions of the tax overhaul are set to expire.

Observers don't think easing the SALT cap is likely to go anywhere.

"This is a starting point in the negotiation," said Ed Zollars, CPA at Thomas Zollars & Lynch in Phoenix. "There are some points in here that are drafted to become law and other points you know they won't be getting."

"Repealing the SALT cap? It's not too likely they'll get that," he said. "But we know they [Democrats] want it."

Fewer people itemizing

Since the new tax law, significantly fewer people are claiming the SALT deduction.

About 16 million taxpayers claimed the SALT deduction for the 2018 tax year, according to an IRS analysis of returns processed through Nov. 21, 2019. That's down from 44.3 million households in the 2017 tax year.

And since the tax overhaul roughly doubled the standard deduction to $12,000 for singles in 2018 ($24,000 for married-filing-jointly), fewer taxpayers claimed itemized deductions at all.

Let's block ads! (Why?)



"news" - Google News
May 13, 2020 at 03:41AM
https://ift.tt/2SYhHT2

House Democrats' stimulus bill rolls back $10,000 SALT cap for 2 years - CNBC
"news" - Google News
https://ift.tt/2DACPId
https://ift.tt/2Wh3f9n

Bagikan Berita Ini

0 Response to "House Democrats' stimulus bill rolls back $10,000 SALT cap for 2 years - CNBC"

Post a Comment

Powered by Blogger.