Treasury Deparment watchdog: ‘Trump’s tax law may cause close to 11million taxpayers to be subject to limit on key deduction’
- If the $10,000 deduction cap had been in place in 2017, 10.9million taxpayers wouldn’t have been able to deduct $323billion in state and local tax payments
- The prediction comes from the Treasury Inspector General for Tax Administration (TIGTA), in a report released on Tuesday
- TIGTA examined 2017 tax filings that had itemized deductions that exceeded the standard deduction amount under President Donald Trump’s tax law
- Some taxpayers will see an increase in their taxes because of the state and local tax (SALT) deduction cap
- Taxpayers who claimed more than $10,000 in SALT deductions in previous filings could still see a reduction under Trump’s tax law
If the $10,000 deduction cap had been in place in 2017, 10.9million taxpayers wouldn’t have been able to deduct $323billion in state and local tax payments (stock)
Approximately 11million taxpayers could be subject to limits on their state and local tax (SALT) deduction under President Trump’s tax law, according to a report released on Tuesday by a Treasury Department watchdog.
The Treasury Inspector General for Tax Administration (TIGTA) predicts that if the $10,000 deduction cap had been in place in 2017, 10.9million taxpayers would not have been able to deduct roughly $323billion in state and local tax payments.
TIGTA examined 2017 tax filings that had itemized deductions that exceeded the standard deduction amount under the new tax law, the Hill reports.
It also would allow for the finding of the number of returns that claimed more than $10,000 in SALT deductions.
Taxpayers who claimed more than $10,000 in SALT deductions in previous filings could still see a reduction under Trump’s tax law.
Taxpayers who claimed more than $10,000 in SALT deductions in previous filings could still see a reduction under President Donald Trump’s tax law
But some will find their limit on SALT deductions to more than offset the 2017 tax law’s lower tax rates and larger child tax credit. Others had their SAT deduction limited by the alternative minimum tax but the new tax law allows them not to now.
The Treasury Inspector General for Tax Administration (TIGTA) examined 2017 tax filings that had itemized deductions that exceeded the standard deduction amount under the tax law
Still, some taxpayers will see an increase in their taxes because of the SALT deduction cap.
The SALT deduction cap has been the most controversial aspect of Trump’s tax law, with politicians on box sides arguing that the cap hurts residents in their high-tax states like New York, New Jersey and California.
Their have been increased calls for the full SALT deduction restoration, with many blue-state politicians claiming that the cap is impacting refunds.
While Trump has expressed openness to revisiting discussions on the cap, Republicans have all but shunned the idea in favor of their high earners.