U.S. Sen. Charles Schumer, the minority leader, and Rep. Tom Suozzi, a Democrat whose district straddles the Queens/Long Island border, held a press conference in Great Neck on Tuesday to announce that the House-approved coronavirus relief bill will seek to eliminate the $10,000 cap on state and local tax deductions approved in the 2017 tax law.
“The cap is costing this community tens of thousands of dollars they could be using amid the crisis,” Schumer said at the press conference. “That is why I will push to restore our full SALT deduction in the upcoming coronavirus legislation under negotiation right now. We need to bring our federal dollars back home and cushion the blow that this virus – and this harmful SALT cap – has dealt to so many homeowners and families locally.”
Suozzi added: “The cap on SALT deductions has been a body blow to New York families. The full SALT deduction must be restored. Without the full SALT deduction, families will leave New York, and the last thing we need in the midst of the health and economic devastation of coronavirus is to lose our residents and taxpayers.”
Under the pre-Trump tax code, taxpayers who itemized deductions on their federal income tax returns could deduct state and local real estate and personal property taxes. Schumer and Suozzi said Wednesday that Long Island residents averaged nearly $20,000 apiece in such deductions before Republicans capped them at $10,000. The cap has been especially painful in high-tax states, including New York and New Jersey. Nationwide, approximately 44 million Americans once took advantage of the full deduction.
“Lifting the cap would have a tremendous impact for many co-op and condo owners,” said Geoffrey Mazel, a partner at the law firm Hankin & Mazel who also serves as general counsel for the President’s Co-op and Condo Council, which represents more than 100,000 housing units in New York City.
In a video conference call with local co-op and condo leaders in May, Schumer announced that the coronavirus bill approved by the House would make co-ops eligible for the Paycheck Protection Program. The Small Business Administration had ruled that the federal funds were not available to real estate interests, including housing cooperatives and condominiums. Schumer acknowledges that the bill – which will now include removal of the SALT deduction cap – faces an “uphill” battle in the Senate, where majority leader Mitch McConnell, a Kentucky Republican, is opposed to it.
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