N.Y., California, Others Set to Work Around SALT Deduction Cap

High-tax states trying to help residents avert the $10,000 federal cap on deductions for state and local taxes are resuming efforts that were largely sidelined during the pandemic.

A half-dozen states from New York to California are slated in 2021 to take up workarounds to the cap following IRS approval last month of tax mechanisms that seven states have in place for pass-through businesses like partnerships and S corporations.

Some Democrats in Congress have pledged to pursue raising the deduction cap, a move that would likely affect states’ actions. Even working with the new Biden administration, however, ...