The $40,000 cap would begin this year, with the same $500,000 income phaseout, and both figures would rise by 1% annually from 2026 through 2033.

The bill proposes raising the state-and-local-tax deduction cap to $40,000 with a 1% increase every year through 2029, then reverting to $10,000 in 2030. It sets the income threshold at $500,000 and increases it by 1% annually through 2029.