For eight years, the federal tax code capped the State and Local Tax deduction at $10,000. For high-tax places like Westchester, that cap was the single most consequential federal tax decision in a generation. A typical Westchester homeowner paying $18,000 in property taxes could only deduct about half of it on the federal return.
That has now changed. Starting in 2025, the cap was raised to $40,000. For tax year 2026, it sits at $40,400. It rises 1% annually through 2029. Then, under current law, it reverts to $10,000 beginning in 2030.
Here is the math for a typical Westchester household. $18,000 in property taxes plus $14,000 in New York state income tax equals $32,000 in SALT exposure. Under the old $10,000 cap, $22,000 of that was invisible. Under the $40,400 cap, the full $32,000 is deductible.
At a 24% marginal federal rate, that swing is roughly $5,300 in annual federal tax reduction compared to the capped scenario. Every year. For four years.
This also flips the filing strategy for many Westchester homeowners. Add mortgage interest, add charitable giving, and for a large share of households, total itemized deductions now exceed the standard deduction again. The default answer that was right for the last several years is no longer right.
Why it matters. The window is four years. The cap reverts in 2030 unless Congress acts. Long enough to bunch charitable giving, time Roth conversions, think through capital gains, and reassess estate planning. But not permanent. If you haven't run your specific numbers, make an appointment this month.
QUICK HITS
ConEd Rate Case Still Awaiting PSC Ruling. April public hearings closed. A PSC decision is expected soon. The settlement would add roughly $5.32/month to the average residential electric bill this year, with further increases in 2027 and 2028.
School Budget Forums Begin Next Week. Ahead of the statewide vote on Tuesday, May 19, district proposition forums ramp up across the county. Expect security line items to draw meaningful attention, particularly after the Mount Kisco Elementary incident.
Bobo's Cafe Opens Sixth Location in Tarrytown. The cafe expansion continues, with Yorktown Heights also in the pipeline. klêma is open in Larchmont. La Mer Oyster Bar in Armonk and The Saw Pit in Port Chester are targeting spring.
Green Ossining Earth Day Festival. Louis B. Engel Waterfront Park hosts eco-friendly vendors, live music, and Hudson River activities.
Reply and tell me: have you run your own SALT math for 2025? I want to know how many Westchester households have actually done the work versus how many are still filing on autopilot.
The Westchester Brief is a daily news briefing for people who live, work, and build in Westchester County.
This newsletter does not constitute tax advice. Consult a qualified tax professional for strategies tailored to your specific situation.
See you Friday.