This bill addresses a tax issue affecting married couples who itemize deductions for state and local taxes. Currently, married couples filing jointly face a "marriage penalty" because the limit on how much state and local tax they can deduct does not double when two incomes are combined, unlike many other tax provisions. The legislation amends the tax code to eliminate this disparity by doubling the deduction limit for joint returns while keeping it at half the amount for married individuals filing separately. The changes apply to the $40,400 annual deduction cap and the $505,000 income threshold that triggers a phase-out of the deduction. The amendments take effect for tax years beginning after December 31, 2026, meaning they will first apply to taxes filed in 2027 for the 2026 tax year.
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