Your Pass-Through Deduction May Expire in 2026

Some states allow pass-through entities to pay state income tax at the entity level which may exceed the SALT cap. However, this deduction will expire after 2025 for those states.

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The Tax Cuts and Jobs Act of 2017 eliminated the ability for taxpayers to deduct an unlimited amount of state income taxes. Instead, the Act placed a $10,000 cap on this deduction for both single and married taxpayers.

There is an Act in the House that would double this for married taxpayers, but it may not pass.