Rep. Nick LaLota of New York’s 1st District has announced a development in tax policy negotiations that could significantly impact Long Island taxpayers. The House-passed “One Big Beautiful Bill” includes a provision to increase the State and Local Tax (SALT) deduction cap, which now awaits Senate approval and the President’s signature. If enacted, this measure is expected to save many Suffolk County families up to $8,000 on their 2026 federal tax returns.
The proposal raises the SALT deduction cap to $40,000 for households earning under $500,000, with both thresholds set to grow by about 1% annually over ten years. This adjustment aims to provide broader coverage for households paying substantial property taxes. The provision is valued at $344 billion over ten years.
LaLota achieved this breakthrough after rejecting an alternative proposal that would have capped deductions at $30,000 without indexing and would reset after a decade. He emphasized the importance of this change: “This was a years-long battle, and I’m proud my colleagues finally came around to a plan that fixes the unfair $10,000 cap from 2017.”
According to data from the Tax Foundation, property taxes in Nassau and Suffolk Counties often exceed $10,000, meaning many homeowners have been unable to fully benefit from existing deductions. Currently, only 16.3% of NY-01 taxpayers claim a SALT deduction.
“Securing this deal took months of pressure,” LaLota stated. “I meant what I said: No SALT, no deal—for real.”
LaLota has consistently opposed tax packages lacking provisions for increasing the SALT deduction cap. He credits Speaker Mike Johnson and Chairwoman Elise Stefanik for their cooperation in achieving this reform.
“This is a major win for Long Island—but we’re not done yet,” LaLota added.
New York faces high effective tax burdens partly due to state budget growth under Democratic leadership since 2018. The current budget surpasses Florida’s despite New York’s smaller population size.
In previous legislative sessions controlled by Democrats in Washington during 2021 and 2022, efforts to address the SALT cap were not realized despite initial promises.
Since taking office in January 2023, LaLota has advocated for restoring the SALT deduction through various legislative efforts including joining the bipartisan SALT Caucus and introducing relevant bills aimed at raising deduction caps while reducing federal deficits.
In January 2025, LaLota met with former President Donald Trump at Mar-a-Lago where discussions included addressing issues like the SALT cap impacting Long Island residents under heavy state and local taxes.
