To amend the Internal Revenue Code of 1986 to modify the limitation on the deduction for State and local taxes, etc.
Bill: H.R.6049 | Sponsor: Rep. Smith, Christopher H. (R-NJ)
Policy area: Taxation

Summary:
This bill extends the limitation on the tax deduction for state and local taxes through 2031. It increases the limitation to $80,000 between 2021 and 2030 and reduces it to $10,000 in 2031.

To amend the Internal Revenue Code of 1986 to modify the limitation on 
             the deduction for State and local taxes, etc.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. MODIFICATION OF LIMITATION ON DEDUCTION FOR STATE AND LOCAL 
              TAXES, ETC.

    (a) In General.--Paragraph (6) of section 164(b) of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``2025'' in the heading and inserting 
        ``2031'',
            (2) by striking ``January 1, 2026'' and inserting ``January 
        1, 2032'',
            (3) in subparagraph (A), by inserting ``or section 
        216(a)(1)'' after ``subsection (a)(1)'',
            (4) in subparagraph (B)--
                    (A) by inserting ``(and any tax described in any 
                such paragraph taken into account under section 
                216(a)(1))'' after ``paragraph (5) of this 
                subsection'', and
                    (B) by striking ``shall not exceed $10,000 ($5,000 
                in the case of a married individual filing a separate 
                return).'' and inserting ``shall not exceed--
                            ``(i) in the case of any taxable year 
                        beginning after December 31, 2020, and before 
                        January 1, 2031, $80,000 ($40,000 in the case 
                        of an estate, trust, or married individual 
                        filing a separate return), and
                            ``(ii) in the case of any taxable year 
                        beginning after December 31, 2030, and before 
                        January 1, 2032, $10,000 ($5,000 in the case of 
                        an estate, trust, or married individual filing 
                        a separate return).'', and
            (5) by striking the last sentence and inserting the 
        following: ``In the case of taxes paid during a taxable year 
        beginning before January 1, 2031, the Secretary shall prescribe 
        regulations or other guidance which treat all or a portion of 
        such taxes as paid in a taxable year or years other than the 
        taxable year in which actually paid as necessary or appropriate 
        to prevent the avoidance of the limitations of this 
        paragraph.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2020.
    (c) No Inference.--The amendments made by paragraphs (3), (4)(A), 
and (5) shall not be construed to create any inference with respect to 
the proper application of section 164(b)(6) or section 216(a) with 
respect to any taxable year beginning before January 1, 2021.
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