This tax season hit many local homeowners hard, as the recent cap on the State and Local Tax, or SALT, deduction led to increased bills around Long Island.
“People are feeling the pain,” said Hempstead Town Supervisor Laura Gillen, who lives in the village. “Rockville Centre residents already pay disproportionately higher property taxes than most other communities in the country, and now we’re being unfairly burdened by the federal government with the cap on SALT deductions.”
The SALT deduction allows taxpayers in high-tax states, like New York, to deduct local tax payments on their federal tax returns. The Tax Cuts and Jobs Act, signed by President Trump, put a $10,000 cap on the SALT deduction starting with the 2018 tax year.
Assemblywoman Judy Griffin, a Rockville Centre resident, noted that some of her constituents didn’t see it coming. “I found a lot of people weren’t really aware of the SALT [deduction] being taken away,” she told the Herald, “so it was a bit of a rude awakening for some.”
Before the cap was instituted, a 2017 report by the Government Finance Officers Association stated that a repeal of the SALT deduction would adversely affect more than 100 million Americans, according to 2015 Internal Revenue Servive data. More than half of the total amount of the SALT deduction went to taxpayers with adjusted gross incomes under $200,000, it added.
“To lose the ability to deduct all our state and local taxes, it’s going to really hurt the area. Families won’t want to buy here and businesses will suffer,” Gillen said, noting that federal representatives must advocate to get the law changed. “Every day in the Town of Hempstead, my administration is focusing on what we can do to ease the burden on taxpayers.”
The GFOA report stated that 35 percent of tax units in New York use the SALT deduction, and the average deduction was about $22,000, the highest among all states. Congressional District 4, which covers Rockville Centre, had 50 percent of tax units using the SALT deduction, according to the report.
“In light of an already serious tax burden, this federal action makes living in our state even less affordable,” State Sen. Todd Kaminsky, a Democrat from Long Beach, said in a statement. “While we in New York have tried to provide relief by making the 2 percent property tax cap permanent as part of the state budget, significant action to reverse the SALT changes must come from Washington, and I urge them to get to work on this issue immediately.”