How the $40,000 SALT expansion creates high-tax winners and income traps

When federal lawmakers enacted the One Big Beautiful Bill Act (OBBBA)—officially titled H.R.1 in the 119th Congress—they reshaped American homeownership tax policy. By raising the State and Local Tax (SALT) deduction cap from its longstanding $10,000 ceiling to $40,000 in 2025, and increasing it to $40,400 for tax year 2026, Congress delivered a massive, albeit