Schumer Trying To Restore SALT Deduction For Long Islanders

Standing in front of a Long Island home, Sen. Charles Schumer announced today that he was looking to restore New Yorkers' ability to deduct more of their state property taxes from their federal tax bills through a deduction known as SALT.

The SALT deduction, or State And Local Tax, was severely reduced by the tax plan that was passed in 2017. It capped the amount of property taxes that homeowners could deduct at $10,000 — a harsh blow for Long Island taxpayers. New York state tried to create a work-around, but that effort was killed by the IRS.

Now, Schumer says he has a plan. He wants to use the Congressional Review Act's Resolution of Disapproval to overturn the IRS decision, which would give Long Islanders the deduction again.

"While none of us have a magic wand to wave and undo the nasty tax predicament the federal government has cast on Long Island, there is one more veritable rabbit in the hat Congress can use to make this unfair IRS rule disappear, and I am announcing today, that I'm going to use it," said Schumer. "The special legislative power comes from the Congressional Review Act (CRA) and tomorrow I will drop what is called a 'Resolution of Disapproval' to overturn the recent IRS decision that blocks New York State from implementing its workaround plan to allow Long Islanders to claim their rightful SALT deduction. New York State had a smart plan, and the IRS shot it down, but not all is lost."

Schumer explained that he can use the special legislative power in an attempt to nullify the recent IRS decision that blocks the state workaround. The disapproval resolution under the CRA gives Congress the power to expeditiously review any new federal regulation, like the IRS decision, so long as the CRA disapproval resolution is filed within 60 legislative days of the regulation being finalized. Schumer said the use of the CRA power is comparable to declaring a policy emergency, and when it comes to the SALT deduction on Long Island, the issue is serious.

The CRA legislative review is not held to the 60-vote requirement to pass the Senate, Schumer added.

Before the tax plan was passed, Long Island homeowners took an average SALT deduction of $20,000. And more than 690,000 households benefited. Many homeowners in Long Island's four Congressional districts had deductions of more than $17,000.

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, as well as either income taxes or general sales taxes. State and local income and real estate taxes had made up approximately sixty percent of local and state tax deductions, while sales tax and personal property taxes made up the remainder. According to the Tax Policy Center, approximately one-third of tax filers had itemized deductions on their federal income tax returns. The mortgage interest tax deduction had allowed borrowers to deduct the interest paid on their home loans from their income taxes.

"Taking away the SALT deduction was brutally unfair to Long Island homeowners and hit them right between the eyes, and now the IRS has added insult to injury, and that's why we have to keep fighting," Schumer said.