State and Local Tax (SALT) Deductions Faces a Court Test

The new cap on state and local tax (SALT) deductions faces a court test.

Starting with 2018 returns, individual filers can deduct on Schedule A state and local income taxes or sales taxes, plus property taxes, up to a $10,000 limit.

Conn., Md., N.J. and N.Y…all high-tax states…are suing the U.S. government. They challenge the $10,000 cap as unconstitutional, claiming that it interferes with states’ sovereign rights to make their own tax and spending choices for residents.They say that the SALT write-off changes were enacted by congressional Republicans and the president to compel high-tax states to revise their tax and fiscal policies.

Legal experts generally predict low odds of success for the states here.

Keep an eye here and will update with any news.