01.29.21

SCHUMER AND GILLIBRAND LAUNCH NEW PUSH TO PERMANENTLY RESTORE NEW YORK STATE’S FULL SALT DEDUCTION; WITH AVERAGE UPSTATE NY DEDUCTION OF $13K+, SENATORS INTRODUCES LEGISLATION TO ALLOW UPSTATE TAXPAYERS TO FULLY DEDUCT STATE & LOCAL TAXES ON FEDERAL INCOME RETURNS

Senators Have Been Pushing To Restore SALT Deduction Since It Was Uprooted From Middle Class Communities Via The Trump Tax Bill; The Avg SALT Deduction Across Upstate New York Was Over $13K Across More Than 1.2M Households 

Senators: The Money Robbed From Upstate Homeowners Via The SALT Deduction Cap Must Be Restored; The Cap On The SALT Deduction Has Been A Body Blow For New York Families

Today, U.S Senate Majority Leader Charles Schumer and U.S. Senator Kirsten Gillibrand introduced legislation in the new Congress to eliminate the $10,000 cap on the State and Local Tax (SALT) deduction starting in 2021. The proposal would allow taxpayers to fully deduct their state and local taxes on their federal income returns. In 2017, the deduction was capped at $10,000 and resulted in a tax increase for many middle-class families.

“When it comes to SALT, New York families needed and deserved this money before the coronavirus took hold, the stakes are even higher now because the cap is costing this community tens-of-thousands of dollars they could be using amid the crisis,” said Senator Schumer. “That is why I am proud to be leading this legislation to restore our full SALT deduction. Double taxing hardworking homeowners is plainly unfair; We need to bring our federal dollars back home to the to cushion the blow this virus—and this harmful SALT cap—has dealt so many homeowners and families locally.”

“I am proud to join my colleagues to introduce legislation to repeal the cap on the State and Local Tax deduction, a cynical policy passed by Republicans as a way to repay wealthy donors and lobbyists with big corporate tax cuts,” said Senator Gillibrand. “The reinstating of the SALT Deduction will ensure that New York families have more money in their pockets, get much-needed tax relief and will once again be treated fairly.”

Schumer and Gillibrand pointed to the following reasons for why the SALT deduction is unfair to New Yorkers:

  • New Yorkers already subsidize other states by paying $36-45 billion more in taxes than we receive back from the federal government;
  • The repeal of the SALT deduction results in double taxation by imposing federal taxes on the income used to pay state and local taxes;
  • The elimination of the deduction drives wealthier people to other states and leaves middle- and lower-income taxpayers holding the bag to pay for school, police and other essential state and local tax burdens.

The below breakdown, based on 2017 data, shows just how critical the full deduction was to New York homeowners.

Congressional District

Percentage of Taxpayers Using SALT deduction

Average SALT deduction

16

41%

$28,984

17

48%

$28,602

18

43%

$20,682

19

33%

$14,320

20

34%

$16,446

21

23%

$11,477

22

23%

$12,275

23

22%

$12,787

24

30%

$13,505

25

33%

$14,334

26

24%

$12,208

27

33%

$14,096

NEW YORK

County

Average SALT Deduction

Number of Households Claiming SALT

Percent of Middle Income SALT Beneficiaries

Westchester

$36,263

232,500

70%

Rockland

$22,249

67,400

80%

Putnam

$19,105

25,900

82%

Saratoga

$19,050

45,340

85%

Albany

$17,002

51,740

86%

Columbia

$16,727

9,680

87%

Thompkins

$16,224

13,080

83%

Orange

$15,755

72,650

87%

Dutchess

$15,662

59,660

86%

Ontario

$15,604

17,160

87%

Monroe

$14,549

121,830

88%

Onondaga

$14,460

72,190

88%

Madison

$14,333

8,830

89%

Ulster

$14,080

30,830

90%

Steuben

$13,842

9,370

88%

Warren

$13,801

9,700

89%

Erie

$13,656

130,650

88%

Schenectady

$13,042

26,290

91%

Essex

$12,733

4,050

90%

Broome

$12,666

20,410

89%

Sullivan

$12,563

10,390

92%

Rensselaer

$12,440

25,570

91%

Chemung

$12,188

8,710

89%

Yates

$12,148

2,300

90%

Oneida

$11,893

23,700

91%

Tioga

$11,893

5,450

92%

Livingston

$11,780

7,810

93%

Cortland

$11,689

4,780

93%

Greene

$11,583

6,620

92%

Otsego

$11,382

5,730

89%

Niagara

$11,294

26,850

93%

Cattaraugus

$11,246

5,700

92%

Oswego

$11,171

12,600

92%

Allegany

$11,169

3,230

94%

Clinton

$11,131

8,250

92%

Schuyler

$11,029

1,840

92%

Delaware

$10,981

4,160

93%

Cayuga

$10,979

8,610

93%

Schoharie

$10,977

3,580

94%

Wayne

$10,935

11,870

94%

Herkimer

$10,829

5,100

93%

Jefferson

$10,824

8,940

92%

St. Lawrence

$10,803

8,270

92%

Seneca

$10,774

3,250

93%

Chautauqua

$10,725

10,100

92%

Chenango

$10,522

3,930

93%

Franklin

$10,438

3,290

92%

Montgomery

$10,332

4,730

94%

Fulton

$10,283

5,220

93%

Hamilton

$10,183

650

92%

Genesee

$10,156

6,840

94%

Washington

$9,973

6,720

95%

Wyoming

$9,871

4,060

94%

Orleans

$9,589

3,790

95%

Lewis

$9,218

2,260

93%

*Middle-income is defined for these purposes as households making less than $200,000 per year.

Under the pre-Trump tax code, taxpayers who itemized deductions on their federal income tax returns could deduct state and local real estate and personal property taxes, as well as either income taxes or general sales taxes. State and local income and real estate taxes had made up approximately sixty percent of local and state tax deductions while sales tax and personal property taxes made up the remainder. According to the Tax Policy Center, approximately one-third of tax filers had itemized deductions on their federal income tax returns.

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