Blue-State Residents Are Reaping Big Refunds From Trump Tax Law’s SALT Cap

Raising deduction limit to $40,000 eases burden in higher-tax states such as New York

By Richard Rubin and Ashlea Ebeling of The WSJ. Excerpts:

"Millions of taxpayers—largely those who earn between $150,000 and $600,000—are starting to reap the benefits of a change that lets them deduct far more of their state and local taxes, or SALT, from their federal taxable income. In last year’s tax law, Congress raised the cap for that deduction to $40,000 from $10,000.

That means people with high state income taxes and local property taxes can pay less to the federal government, and those people are concentrated in such states as New York, New Jersey and California."

"refunds for people in some higher-tax states have been growing faster than the national average"

"In California, Virginia and Maryland, average refunds are up 21%, 13% and 12% from 2025, respectively, compared with an average of 11% nationally"

"In Florida and Texas . . . refunds are up just 6% and 5%, respectively." 

"in dollars, SALT is the biggest new tax break for individuals and is expected to save taxpayers about $29 billion"