The U.S. Supreme Court rejected a bid by four Democratic-leaning states to lift a cap on federal deductions for state and local taxes put in place as part of a 2017 tax law. This law increased the Standard deduction to $25,000 which allows most married couples to file a simpler return without itemizing deductions.
The Supreme Court refused to hear the appeal by New York, Connecticut, Maryland, and New Jersey. The District Court determined the States’ claim was meritless and dismissed their lawsuit. The 2nd Circuit, in denying the case, the U.S. Congress did not violate the U.S. Constitution by placing a $10,000 limit on the amount of state and local taxes that individuals may deduct on federal income tax returns.
Democratic President Joe Biden’s administration opposed the four states and asked the Supreme Court not to hear their appeal.
The deduction limit, known as the SALT cap implemented an income tax cut for individuals.
