Sponsor
Josh S. Gottheimer
Representative · D-NJ
Representative · D-NJ
The bill increases tax relief for married joint filers by raising SALT caps and phaseouts and clarifying per‑status limits, but it reduces federal revenue and concentrates benefits in certain states and among joint filers while leaving separate filers with smaller gains.
Married couples filing jointly will be able to claim up to double the SALT deduction cap (about $80,800 in 2026) and benefit from a higher MAGI phaseout threshold ($1,010,000 in 2026), lowering federal income tax for many married households — especially middle‑ and higher‑income joint filers.
Taxpayers will face fewer filing-status distortions because the law clarifies per‑status SALT limits and removes a marriage penalty that previously treated filing statuses inconsistently.
All taxpayers could face increased federal deficits or pressure for future spending cuts or tax increases because raising SALT caps for joint filers will reduce federal revenue.
Taxpayers in high‑tax states and homeowners there will capture a disproportionate share of the benefit, producing an uneven regional distribution of the tax cut.
People who file married filing separately (including those who do so for non‑tax reasons) remain limited to half the baseline benefit, so separate filers will still receive smaller tax relief.
Based on analysis of 1 section of legislative text.
Scales the SALT deduction cap and MAGI threshold by filing status so MFJ = 200% and MFS = 50% of the 2026 baseline amounts, removing the marriage penalty.
Official title: To amend the Internal Revenue Code of 1986 to eliminate the State and local tax deduction marriage penalty.
Introduced July 9, 2026 by Josh S. Gottheimer · Last progress July 9, 2026
Makes State and Local Tax (SALT) deduction dollar caps and the MAGI phaseout threshold scale explicitly by tax filing status so married couples filing jointly receive double the baseline amounts and married couples filing separately receive half. Removes prior textual "half" rule language and converts limits into explicit, filing-status‑scaled amounts beginning for taxable years after December 31, 2026. The change preserves the baseline 2026 dollar limitation ($40,400) and 2026 MAGI threshold ($505,000) as the single-filer amounts, assigns 200% of those amounts to married filing jointly, and assigns 50% to married filing separately, eliminating the prior “marriage penalty” created by a flat dollar cap that did not scale by filing status.