The House of Representatives on Thursday passed a sweeping budget bill, sending it to President Donald Trump’s desk for signing and delivering on some of his biggest domestic policy promises.
The bill will cut spending on social safety net programs, like Medicaid and the Supplemental Nutrition Assistance Program, while broadly slashing taxes, particularly for high-income earners. While the long-term ramifications of the bill may take months or years to manifest, some of its effects could be felt immediately.
Washington homeowners in particular stand to benefit from a provision that increases the amount in property tax payments they can deduct on their 2025 federal returns.
Previously, taxpayers could deduct up to $10,000 in state and local taxes on their returns, a limit known as the “SALT” deduction cap. The budget bill raises that cap to $40,000 this year, with staggered increases running through 2029. The cap is scheduled to fall back to $10,000 in 2030.
“You can see how at $10,000, you could eat that up pretty quickly with just property taxes,” said Mark Harmsworth, small business director at the Washington Policy Center, a think tank that advocates for free-market policies.
With the higher SALT deduction cap, taxpayers can significantly reduce their taxable income, he said. “If you’re a property owner, this is going to help you.”
In Washington, about 1 in 10 tax returns includes a SALT deduction claim, making it among the states with the highest number of taxpayers using the benefit, according to an analysis of Internal Revenue Service data published by the Bipartisan Policy Center.
Tax relief under the provision won’t be evenly felt. Taxpayers can claim the benefit only if they itemize their deductions, a practice more common among high-income earners.
“It’s not a huge benefit to most Washingtonians,” said Eli Taylor Goss, executive director of the Washington State Budget and Policy Center, a research organization focused on economic equity.
Taylor Goss pointed out that more Washingtonians would benefit from an increase to the SALT deduction cap if the state had an income tax. In the absence of that, it’s people who own property that will primarily benefit, they said. “The SALT program won’t give the necessary relief to the families that need it most.”
Other provisions eliminate taxes on tips and overtime pay, reduce taxes for most seniors and maintain current income tax brackets, which were otherwise set to expire and increase at the end of the year.
