Wait, property and state taxes are already deductible on federal 1040, right? So why are the states even doing this? The article is paywalled so surely I’m missing some info here.
> The I.R.S. warning comes in response to states, like New York, that have looked for ways to blunt the impact of a new $10,000 cap on the state and local tax deduction, known as SALT. The cap, which was included in last year’s $1.5 trillion Republican tax overhaul, hit predominantly Democratic, high-tax states hardest since it limits the amount of state and local sales, income and property taxes that residents can deduct from their federal taxes.
It’s subsidizing sparsely populated states that either don’t need to or don’t care to provide the state/local services that populated places need.
But you need to clear $24k in deductions (as a married couple) to even take that deduction.
The average homeowner loses, as they can’t cross the threshold, and every marginal state/local tax dollar costs 15-25% more than it did before.
I don't think the "average homeowner" would complain that they can't take as big of a homeowners deduction when the net result is they are exempting a larger portion of their income regardless.