SALT Cap, EVs, and Seniors: More Bill Battles

Money Explainers

The battle over the SALT deduction cap rages on! Will it be $10,000 or $40,000? Find out what's at stake for homeowners in high-tax states. Electric vehicle buyers, take note! The $7,500 EV tax credit is on its way out. We explain the proposed changes and their impact on future car purchases. Good news for seniors! Learn about the new "bonus deductions" proposed in Trump's bill and how they could offer tax relief for those 65 and older. #SALTDebate. #EVTaxCreditEnd. #SeniorsTaxBreak.

Transcript

00:00The one big, beautiful bill continues to stir debate, particularly concerning hot-button issues

00:05like the state and local tax, salt deduction, electric vehicle credits, and tax breaks for

00:11seniors. The salt deduction, currently capped at $10,000, is a major point of contention.

00:18The House bill proposes a significant increase to $40,000 with income restrictions,

00:23a move favored by many in high-tax states. However, the Senate text maintains the $10,000

00:29cap for now, indicating ongoing negotiations. The Senate also proposes subjecting pass-through

00:35entity taxes, a workaround for the salt cap, to the $10,000 limit, a move that could raise

00:41revenue but be unpopular in certain states. Car buyers will also see changes. Both the House

00:48and Senate bills offer tax subsidies for purchasing U.S. assembled cars in the form of a deduction on

00:54car loan interest. However, both chambers also propose ending the $7,500 credit for

01:00new electric vehicles and a separate credit for used EVs. The timing of this credit's termination

01:06differs between the House and Senate, but the general direction is a move away from EV purchase

01:11incentives. For seniors aged 65 and above, both the House and Senate bills offer bonus deductions,

01:18acting as a substitute for President Trump's campaign promise to eliminate taxes on Social

01:23Security Income. The Senate proposes a more generous temporary deduction of up to $6,000

01:28for individuals phased out at higher incomes, an increase from the House's $4,000 deduction.

01:35These deductions aim to provide some tax relief to older Americans without directly altering

01:39Social Security benefits, which are typically outside the scope of reconciliation.

01:44These provisions underscore the complex negotiations as lawmakers try to bridge the divide between the

01:50House and Senate versions. Money explainers.

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