Latest news with #NickLaLota
Miami Herald
29-06-2025
- Business
- Miami Herald
SALT income tax deduction takes key step forward on Senate deal
A much followed tax break improvement is inching toward becoming a reality. A proposed tweak to the state and local tax (SALT) deduction - capped at $10,000 since 2018 - could soon offer relief to taxpayers in high-tax states. If passed, the Senate's version of the One Big Beautiful Bill of America (OBBBA) would give taxpayers a temporary boost in their ability to deduct SALT payments, especially for those who've felt the sting of the cap since the Tax Cuts and Jobs Act (TCJA) took effect. And as lawmakers inch toward a deal, taxpayers - and their accountants - are watching closely. Photo by Ian Hutchinson on Unsplash What is the SALT income tax deduction cap? Under the TCJA, the SALT deduction was capped at $10,000 annually - including the combined total of property taxes, income taxes, and sales taxes. That cap, still in place today, is set to expire at the end of 2025. Don't miss the move: Subscribe to TheStreet's free daily newsletter But since its enactment, it has disproportionately affected residents in states with high property values and/or income tax rates. Think: New YorkCaliforniaNew JerseyConnecticutMassachusettsMarylandIllinois In these states, many middle-and upper-middle-income households have long paid more than $10,000 in state and local taxes. Related: How the IRS taxes Social Security income in retirement As a result, despite the higher standard deduction that was part of TCJA, some families have been unable to fully deduct those expenses on their federal tax returns-a costly outcome. Both the House and Senate versions of the OBBBA seek to expand the SALT deduction, but with key differences. In the House proposal, the cap would rise to $40,000 for married couples, phased out for households earning over $500,000. The new cap would last until 2034. Related: Social Security income tax deduction clears critical hurdle Not all lawmakers are on board. Rep. Nick LaLota (R-N.Y.), for instance, told Axios he was a "no" on a temporary deal. "I need $40K for my constituents, and it has to be $40K forever," he said. The Senate version takes a different approach. It proposes a temporary SALT cap increase from 2025 through 2029, followed by a return to the $10,000 cap: 2025: Cap rises to $40,0002026: Adjusted to $40,4002027–2029: Cap increases annually by 1%2030 and beyond: Cap returns to $10,000 For married individuals filing separately, these caps are halved. High-Income taxpayers face phase-down of SALT deduction The Senate plan includes a phase-down for high earners, starting in 2025. Here's how it works: The benefit phases down once your modified adjusted gross income (MAGI) exceeds $500,000 (or $250,000 for married filing separately).The reduction equals 30% of the amount your MAGI exceeds the the SALT cap cannot fall below $10,000 - even for the wealthiest filers. This means high-income households would still see some benefit from the temporary cap hike, just not the full amount. "For a lot of people, this cap is the difference between taking the standard deduction and itemizing deductions," said Michael Lofley, a financial adviser with HBKS Wealth Advisors. "If they itemize, they now get some additional tax benefit for other deductions, like charitable giving or mortgage interest." Related: Medicare recipients face a growing problem While some taxpayers - particularly small business owners - have used pass-through entity taxes (PTETs) to bypass the cap, W-2 earners such as corporate executives don't have that option. For them, this proposal offers real financial relief. Standard deduction increases under Senate tax plan The Senate tax bill includes more than just SALT deduction relief. It also proposes permanent extensions of the TCJA's higher standard deduction amounts. And for the years 2025 through 2028, it adds an extra boost: $1,000 for single filers$1,500 for heads of household$2,000 for married couples filing jointly That means in 2026, the standard deduction could be: $16,000 for singles$24,000 for heads of household$32,000 for married joint filers After 2026, these amounts would adjust with inflation. Retirees also have reason to pay attention. The Senate bill includes a larger senior tax deduction - $6,000 per eligible filer aged 65 or older (up from $4,000 in the House bill). This enhanced deduction would apply through 2028 and would phase out for incomes above: $75,000 (single filers)$150,000 (married filing jointly) Before the TCJA, about 31% to 32% of taxpayers itemized deductions. But after the law took effect in 2018, that figure dropped significantly: 2018: 11% to 11.5%2020–2022: Just 9% to 10% If the SALT cap is temporarily expanded, even if the standard deduction increases, more taxpayers - especially in high-tax areas - may once again find it beneficial to itemize deductions on their federal tax returns. "If Congress meets President Trump's July 4th deadline for passing the final bill, taxpayers will soon be able to update their 2025 tax projections," says Jean-Luc Bourdon, CPA. "This could prompt some taxpayers to revise their estimated quarterly payments or tax withholdings for the remainder of the year." Related: Workers struggle with one big problem when they retire The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
27-06-2025
- Business
- Yahoo
Key SALT Republicans reject latest offer from Senate GOP, White House
A trio of key moderate House Republicans say they are rejecting the latest offer from Senate Republicans and the White House on the state and local tax (SALT) deduction cap, heightening the cross-chamber standoff over one of the thorniest issues in the GOP's 'big, beautiful bill.' Rep. Nick LaLota (R-N.Y.) — who has been one of the most vocal members of the SALT Caucus — told The Hill that the Trump administration, on behalf of Senate Republicans, presented the group with a SALT proposal that was valued at $200 billion, far less than the $344 billion value in the House-passed bill. The Hill first reported on the offer. 'It's such a terrible offer that is nowhere near the realm of possibility,' LaLota said. 'If you all were buying a car and you were presented a number by a salesman like it was presented by those folks today you would never go back to the lot ever again. You'd be so humiliated, disgusted and you would never go back again. I'm close to that point. They need to get real in what they will present us or this bill ain't ever gonna happen.' Shortly after, Rep. Young Kim (R-Calif.), a co-chair of the SALT Caucus, and Rep. Mike Lawler (R-N.Y.), another key member of the group, also rejected the latest offer. 'We rejected that,' Lawler told reporters. 'We're continuing to dialogue with them and we'll see where it goes.' The House-passed measure included a $40,000 deduction cap — quadruple the number in current law — for individuals making $500,000 or less. Senate Republicans, however, reverted the proposal back to $10,000 in their version of the legislation, sparking a fierce fight between the two camps. In recent days, however, talks have zeroed in on keeping the $40,000 deduction cap in place but changing the income threshold and inflation index. SALT Caucus members would not disclose the contours of the latest offer, but he said it included a lower income cap and lower indexing for inflation. LaLota said the latest offer is 58 percent of the value of the SALT provision in the House bill. The rejection of the latest offer by the three SALT Caucus lawmakers deals a blow to ongoing negotiations over the deduction cap, which has emerged as one of the most difficult hangups in the party's sprawling tax cuts and spending package. Sen. Markwayne Mullin (R-Okla.), who has been the lead negotiator for Senate Republicans on SALT, brushed off LaLota's rebuff of the most-recent offer, exuding confidence that the two groups will reach consensus. 'We're still looking for a spot. We're gonna be good,' Mullin said. 'We'll make it work, we'll get to [a] landing spot.' Time, however, is running out. Senate Majority Leader John Thune (R-S.D.) is pushing to put the legislation on the floor for an initial vote on Friday, which would kick off the consideration process as Republicans race to meet their self-imposed July 4 deadline. After the Senate clears the bill, the House has to give it a final stamp of approval. Aside from SALT, Senate Republicans are still grappling with a handful of disagreements, including Medicaid cuts and the rollback of green-energy tax credits. The Senate Parliamentarian delivered GOP lawmakers a significant setback Thursday morning when she shot down key Medicaid provisions in the bill, including a proposal to cap states' use of health care provider taxes to collect more federal Medicaid funding — a provision championed by conservatives that would have generated billions of dollars in savings to pay for President Trump's tax cuts. Asked if he thinks the Senate will still be able to vote on the bill this weekend, despite the lingering hangups, Mullin responded: 'Yes.' Al Weaver and Alex Bolton contributed. Updated at 4:21 p.m. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Axios
27-06-2025
- Business
- Axios
GOP zeros in on shorter timeline to avert SALT meltdown
The House and the White House are negotiating an offer to keep the House-passed $40,000 SALT cap increase but peg it to a shorter 5-year timeline in President Trump's " big, beautiful bill," Axios has learned. Why it matters: That could move one of the bill's thorniest issues closer to being resolved. But House SALT holdouts and senators — who have almost no incentive to be generous on SALT — still need to agree. Zoom in: At least one House holdout, Rep. Nick LaLota (R-N.Y.) told Axios he's a "no" on that offer. "I need 40k for my constituents, and it has to be 40k forever," he told Axios. But Rep. Mike Lawler (R-N.Y.) told CNN he's optimistic after the SALT crew's meetings with Treasury officials. Rep. Nicole Malliotakis (R-N.Y.) told reporters she's inclined to support the deal, even if she doesn't love it. Between the lines The House-White Hose proposal would keep the House's language raising the cap to $40,000 for five years, but then revert to the current $10,000 cap after that, two sources familiar tell Axios. That could reduce the deficit hit from raising the SALT cap by as much as $145 billion, one told Axios. The House SALT caucus, with its handful of blue-state representatives, Sen. Markwayne Mullin (R-Okla), Treasury Secretary Scott Bessent and other White House officials have been involved in the negotiations. Bessent is expected to discuss the plan with Senate Republicans during a closed-door lunch Friday, sources said.
Bloomberg
26-06-2025
- Politics
- Bloomberg
NY House Member Says He's Disgusted With Bessent's SALT Offer
New York Republican Nick LaLota called Treasury Secretary Scott Bessent's latest offer on the state and local tax deduction 'insulting' and 'disgusting,' raising serious questions about whether the GOP can strike a deal on the tax and spending bill. 'It's not even worth countering,' said LaLota, a key Republican holdout in the House. 'They need to get real or this bill is never going to happen.'
The Hill
26-06-2025
- Business
- The Hill
Key SALT Republican rejects latest offer from Senate GOP, White House
A key moderate House Republican says he is rejecting the latest offer from Senate Republicans and the White House on the state and local tax (SALT) deduction cap, heightening the cross-chamber standoff over one of the thorniest issues in the GOP's 'big, beautiful bill.' Rep. Nick LaLota (R-N.Y.) — who has been one of the most vocal members of the SALT Caucus — told The Hill that the Trump administration, on behalf of Senate Republicans, presented the group with a SALT proposal that was valued at $200 billion, far less than the $344 billion value in the House-passed bill. 'The Senate's current SALT offer falls far short—providing just 58 percent of the value in the House-passed bill. It's not a serious proposal, and it disregards the good-faith compromise backed by 99 percent of House Republicans,' LaLota told The Hill. 'I won't participate in performative negotiations like the one scheduled this afternoon until the Senate shows it's ready to engage in reality.' It remains unclear how other members of the SALT Caucus feel about the offer, which was first reported by The Hill. The House-passed measure included a $40,000 deduction cap — quadruple the number in current law — for individuals making $500,000 or less. Senate Republicans, however, reverted the proposal back to $10,000 in their version of the legislation, sparking a fierce fight between the two camps. In recent days, however, talks have zeroed in on keeping the $40,000 deduction cap in place but changing the income threshold and inflation index. LaLota would not disclose the contours of the latest offer, but said it included a lower income cap and lower indexing for inflation.
