SALT relief may still be possible despite reports that it’s ‘no longer in play’

Personal finance

Representative Judy Chu, a Democrat from California, speaks during a news conference announcing the State and Local Taxes (SALT) Caucus outside the U.S. Capitol in Washington, D.C., on Thursday, April 15, 2021.
Sarah Silbiger | Bloomberg | Getty Images

As Democrats debate Build Back Better, the social and climate spending plan may still include changes to the $10,000 limit on the federal deduction for state and local taxes, known as SALT, despite reports the measure may be out. 

“I’m glad to hear that the SALT provisions are no longer in play for Build Back Better,” said Sen. Bernie Sanders, I-Vt., in a tweet. “Democrats need to focus on the struggling working class, not giving more tax breaks to the wealthy.”

However, it’s unclear whether a bill without SALT changes has support from all Democratic senators. And the measure is a key issue for some House Democrats who threatened to block the bill without SALT relief.

More from Personal Finance:
‘No SALT, no deal.’ Some House Democrats say deduction must be in Build Back Better
SALT deduction relief may be in peril as Build Back Better stalls
House Democrats want to raise SALT deduction cap to $80,000. What it means for your taxes 

“SALT remains a top priority,” said Reps. Tom Suozzi, D-N.Y.; Josh Gottheimer, D-N.J.; and Mikie Sherrill, D-N.J., in a joint statement.

 ”We support the president’s agenda, and if there are any efforts that include a change in the tax code, then a SALT fix must be part of it. No SALT, no deal,” they said.

House Democrats in November passed a spending package boosting the SALT cap to $80,000 from 2021 through 2030 before reinstating the $10,000 limit in 2031. However, the bill stalled in December after moderate Sen. Joe Manchin, D-W.Va. said he wouldn’t vote for it.

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