With Dems Winning The House, N.J. Lawmakers Push To Save SALT Deductions
RAMSEY, N.J. (CBSNewYork) – New Jersey lawmakers are looking to ease the tax burden for many residents who expect to owe the government more next year.
The bigger tax bills are due to new federal tax laws which cap SALT deductions - state and local taxes – used on your federal return.
New Jersey representatives Josh Gottheimer and Bill Pascrell came together at the Ramsey Department of Public Works to address the $10,000 cap on this year's SALT deductions.
In Ramsey, the average property tax bill is around $12,500. Residents will now have to pay taxes on the additional $2,500 that's over the cap.
MORE: IRS Stops States' Attempts To Save SALT Deduction
Last year many Ramsey residents rushed to pre-pay their 2018 property taxes to save money before the new law went into effect.
"We paid as much as we could for last year to put us at the 10,000 max," Justine Nero told CBS2's Aundrea Cline-Thomas.
"That's our concern. We're worried about pricing people out of town," Ramsey mayor Deirdre Dillon explained.
In January, with a Democratic majority in the House - Gottheimer and Pascrell say they'll submit legislation to remove the cap.
While they agree on the need for change, they don't agree on how to pay for it.
"Increasing the corporate tax because we reduced it all the way down to 21.5 percent," – Pascrell proposed.
"I'm against that. I don't think we should raise any taxes," Gottheimer argued.
Gottheimer did not offer a clear way to pay for the increased cap and added that the duo expects challenges from House Republicans.
Until the new cap is changed, residents will continue to foot the bill. In response to the new tax law, states tried to provide relief through a loophole that would give tax credits for charitable donations.
That plan is being challenged by the IRS. Lawmakers say they expect that issue to be settled in court.
