To amend the Internal Revenue Code of 1986 to eliminate the State and local tax deduction marriage penalty.
- Sponsor
- Rep. Gottheimer, Josh [D-NJ-5]
- Committees
- Ways and Means Committee (primary)
- Last action
- Jul 9, 2026
Bottom line
The bill aims to eliminate the 'marriage penalty' within the State and Local Tax (SALT) deduction by doubling the deduction cap and income threshold for married couples filing jointly.
What it actually does
This bill amends the Internal Revenue Code of 1986 to modify the limitation on the State and Local Tax (SALT) deduction for married individuals. Specifically, it would double the current $40,400 deduction cap and the $505,000 Modified Adjusted Gross Income (MAGI) threshold for couples filing a joint return, effectively raising them to $80,800 and $1,010,000, respectively. For married individuals filing separate returns, these amounts would be set at 50% of the individual amount, or $20,200 and $252,500. These changes would apply to taxable years beginning after December 31, 2026.
Proponents argue
Proponents argue that the current SALT deduction cap creates an unfair 'marriage penalty' for married couples, particularly those in high-tax states, by limiting their combined deduction to the same amount as a single filer. This bill would restore fairness by allowing married couples filing jointly to deduct twice the amount of a single filer, providing much-needed tax relief and aligning the SALT deduction with other tax provisions that account for joint filing status.
Opponents contend
Opponents contend that this change would primarily benefit wealthier taxpayers in high-tax states, further exacerbating income inequality and contributing to federal revenue loss. They argue that the original SALT cap was intended to curb deductions for high-income earners and that expanding it, even to address a 'marriage penalty,' undermines fiscal responsibility and disproportionately favors a specific demographic at the expense of broader tax fairness.
The bill is very short and directly amends specific sections of the tax code, making it highly accessible for a reader to understand its core changes.
Section 1(a), 1(b), 1(c)
Adjusting SALT Deduction and MAGI Threshold for Married Filers
This provision modifies the existing $40,400 cap on the State and Local Tax (SALT) deduction and the $505,000 Modified Adjusted Gross Income (MAGI) threshold for its applicability. For married couples filing a joint return, the deduction cap would increase to $80,800 (200% of the individual amount) and the MAGI threshold would increase to $1,010,000 (200% of the individual amount). For married individuals filing separate returns, the cap would be $20,200 (50% of the individual amount) and the MAGI threshold would be $252,500 (50% of the individual amount). These changes are designed to eliminate the 'marriage penalty' in the current SALT deduction structure.
Supporters argue
Supporters argue that this provision directly addresses an inequity in the tax code where married couples are penalized by having the same SALT deduction cap as single filers, despite often having higher combined incomes and tax burdens. Doubling the cap for joint filers ensures that marriage does not result in a higher tax liability compared to two single individuals with the same combined income and deductions.
Critics contend
Critics argue that this provision disproportionately benefits high-income married couples, particularly those residing in states with high property and income taxes. They contend that this tax relief is not broadly distributed and would primarily serve to reduce the tax burden on wealthier households, potentially at the expense of federal revenue that could be used for other priorities.
Tradeoffs
This provision navigates the tension between providing tax fairness for married couples and concerns about the distributional impact of tax benefits. While it resolves a 'marriage penalty,' it also directs significant tax relief to higher-income households, which could be seen as conflicting with efforts to make the tax system more progressive or to control federal deficits.