Local Infrastructure Tax Cuts Act
Summary
What This Bill Does
This bill rewrites the SALT deduction limitation for taxable years after 2026. Taxpayers with modified adjusted gross income above threshold amounts receive a $0 applicable limitation amount; married separate filers retain a $5,000 amount; other taxpayers retain a $10,000 amount. Thresholds are $215,000 for joint returns, $161,250 for heads of household, and $107,500 for other taxpayers, with inflation adjustments after 2027 rounded to the nearest $50. The bill also adds qualified special assessment taxes to deductible taxes under section 164 when imposed by a state, possession, political subdivision, or D.C. on real property in a special assessment district for a community infrastructure project that directly benefits the property. Covered infrastructure includes transportation, schools, hospitals, police, fire, emergency response, water, wastewater, stormwater, telecommunications, electric, gas, utility infrastructure, and dam restoration, but the deduction applies only for the taxpayer's principal residence.
Who Benefits and How
Homeowners in special assessment districts, principal-residence taxpayers, local infrastructure finance authorities, municipal utilities, and community facilities benefit from a new deduction for qualified assessments tied to infrastructure that directly benefits the property.
Who Bears the Burden and How
High-income taxpayers above the new modified-AGI thresholds lose SALT limitation amounts, and the Internal Revenue Service, tax preparers, state revenue agencies, local assessment districts, and federal taxpayers must administer income thresholds, inflation adjustments, and special-assessment qualification rules.
Key Provisions
- Modifies the SALT limitation amount to $0 for taxpayers above modified-AGI thresholds after 2026.
- Requires threshold amounts of $215,000 for joint returns, $161,250 for heads of household, and $107,500 for other taxpayers with inflation adjustments after 2027.
- Creates a deduction for qualified special assessment taxes imposed on principal residences in special assessment districts.
- Provides community-infrastructure coverage for transportation, schools, hospitals, emergency response, water, wastewater, stormwater, telecommunications, electric, gas, utility, and dam restoration projects.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Modifies the state and local tax deduction cap after 2026 and creates a separate deduction for qualified special assessment taxes paid on a principal residence to fund local community infrastructure.
Key Policy Areas
Tax, Infrastructure, State and Local Government
Primary Purpose
Modifies the state and local tax deduction cap after 2026 and creates a separate deduction for qualified special assessment taxes paid on a principal residence to fund local community infrastructure.
Policy Domains
Substantive provisions
Identified Gains
- Homeowners in special assessment districts
- Principal-residence taxpayers
- Local infrastructure finance authorities
- Municipal utilities
- Community facilities
Identified Costs
- High-income taxpayers
- Internal Revenue Service
- Tax preparers
- State revenue agencies
- Local assessment districts
- Federal taxpayers
Sponsors
Legislative Progress
In CommitteeReferred to the House Committee on Ways and Means.
Introduced in House
Ms. Stevens (for herself, Mrs. Dingell, Ms. Scholten, and Ms. …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
High-income taxpayers, Homeowners in special assessment districts, Principal-residence taxpayers
Positive-direction: Homeowners in special assessment districts
Negative-direction: High-income taxpayers, Taxpayers
Local infrastructure finance authorities
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "IRC"
- → Internal Revenue Code of 1986
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology