GOP Wins Signal Changes to SALT Cap and to State Workarounds

States may need to rethink their state and local tax deduction workarounds now that Donald Trump’s return to the White House and Republican control of the Senate is making an increase—or possibly full removal—of the $10,000 SALT cap more likely in 2025.

In total, 36 states and New York City permit pass-through entities, such as partnerships and S corporations, the option to pay state and local taxes at the entity level, according to the American Institute of CPAs. These pass-through entity taxes, PTETs, allow some taxpayers to avoid the $10,000 SALT limit set by Trump’s 2017 tax law.

Ten ...