Markus Andrews

Over the past 20 years, 99% of U.S. counties have experienced a flood event, according to the National Flood Insurance Program by the Federal Emergency Management Agency.
While floods can be bigger risks in areas near bodies of water, they can happen anywhere, “even on a mountaintop,” says an insurance expert.

A drone view shows flooded houses, following torrential rains that unleashed flash floods along the Guadalupe River in San Angelo, Texas, on June 4, 2025, in this screen grab obtained from a social media video.
Patrick Keely | Patrick Keely Via Reuters

‘Every home can be exposed’

Texas is one of the most flood-prone areas in the U.S., Worters said — flash floods, river overflows and tropical storms result in billions of dollars in insured losses per year.
“Flooding in Texas has become a growing threat,” she said.
But it’s a nationwide risk. Over the past 20 years, 99% of U.S. counties have experienced a flood event, according to the National Flood Insurance Program by the Federal Emergency Management Agency. About 40% of NFIP claims are from outside high-risk zones.
While floods can be bigger risks in areas near bodies of water, they can happen anywhere, “even on a mountaintop,” Worters said.
“Every home can be exposed,” she said.
For example, in 2024, Hurricane Helene caused massive flooding in mountainous areas such as Asheville, North Carolina. Less than 1% of households there were covered by the NFIP, according to a report by the Swiss Re Institute.
Parts of central North Carolina also experienced flash floods over the July Fourth weekend, as Tropical Storm Chantal made its way inland. “This historic weather event caused flooding like we haven’t seen in several decades in the central part of the state,” Joey Hopkins, North Carolina’s transportation secretary, said in a press release Tuesday.

Why homeowners insurance doesn’t cover floods

Insurers tend to avoid covering risks that produce “highly correlated losses” that can be “catastrophic in nature,” said Daniel Schwarcz, a law professor at the University of Minnesota Law School who focuses on insurance law and regulation. Floods are one such disaster, as are earthquakes.
“When it affects one person dramatically, it often affects many, many people dramatically,” he said.
About 90% of all presidentially declared U.S. natural disasters involve flooding, per FEMA.

Residents might have water damage coverage included in their homeowners policy, which can cover events such as pipe bursts, said Karl Susman, president and principal insurance agent of Susman Insurance Services, Inc. in Los Angeles. 
But such provisions do not cover damage from rising water levels, experts say. 
“When you have sudden, intense flooding that’s caused by heavy rain in a short period of time, that’s a flash flood,” Worters said. “That’s something that would not be covered on your regular homeowners [policy].”

Where to get flood insurance

Because standard policies often explicitly exclude flooding, if you want coverage, you’ll need a standalone policy.
You can get flood insurance from FEMA’s NFIP, which is considered the primary source of flood coverage in the U.S. The NFIP typically covers up to $250,000 in damages to a residential property and up to $100,000 on the contents.
As of 2024, the NFIP has more than 4.7 million flood insurance policies in force, providing coverage in excess of $1.28 trillion, according to FEMA.
If you have an expensive home or expect more severe damage to your property, consider asking an insurance agent about so-called “excess flood insurance,” Worters said. Such policies are written by private insurers that cover losses over and above what’s covered by the NFIP, she said.
If you decide to get coverage through the NFIP, keep in mind that there is usually a 30-day waiting period before the new policy goes into effect. 

NFIP may not be your only option. Some private insurers now offer standalone flood insurance policies as risk modeling and actuarial projections — or financial estimates for future events — have improved, said Worters. 
According to a recent report by LendingTree using 2023 nationwide data from S&P Global, the average cost for private flood insurance is $98 a month. A separate report by NerdWallet using 2025 NFIP rates found that the average flood insurance through FEMA costs $75 a month. 
Keep in mind, however, that the price you pay for coverage will depend on factors including where you live. Compare all the options available to you in your area, as they can be “drastically different” in cost, said Susman. 
Schwarcz said homeowners can sometimes get cheaper policies through private insurance companies as they use different mechanisms from the NFIP. 
“You want to look in both places,” he said. More

The federal government underreported the number of international students in the U.S. last year by more than 200,000 students.
The student and exchange visitor information system data issued by the Department of Homeland Security was corrected this month to show overseas enrollments rose, rather than declined.
These enrollment figures have been at the center of an escalating battle over international student visas.

Jonathan Drake | Reuters

International student enrollment increased last year, according to the U.S. Department of Homeland Security — contrary to data the agency previously posted, which showed a decline.
A new analysis by Chris Glass, a professor at Boston College, found that student and exchange visitor information system data issued by DHS underreported the number of international students by more than 200,000 — an error that the agency corrected this month. Glass flagged the change on July 7.

The numbers from SEVIS, a division of U.S. Immigration and Customs Enforcement, show overseas enrollments totaled 1,294,231 in September, compared to the earlier-reported, erroneous figure of 1,091,182. SEVIS data tracks college students as well students in public and private high schools, language training, flight schools and vocational schools, among other programs.
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The corrected data shows year-over-year growth of 6.5%, according to Glass. This is largely in line with Open Doors data, released by the U.S. Department of State and the Institute of International Education, which also found that the U.S. hosted a record number of students from abroad in the 2023-24 academic year. 
The revised numbers show “robust growth,” Glass told CNBC. “It’s critical data at a moment when people are paying close attention to the number of international students in the U.S.”
SEVIS did not immediately respond to a request for comment.

Trump, Harvard battle over international enrollment

For now, the fate of international enrollment at Harvard and elsewhere is still up in the air.
In early June, Harvard President Alan Garber said in a statement that “Harvard’s Schools continue to make plans to ensure that our international students and scholars will be able to pursue their academic work fully.”

People hold up signs during the Harvard Students for Freedom rally in support of international students at the Harvard University campus in Boston, Massachusetts, on May 27, 2025.
Rick Friedman | Afp | Getty Images

Although international undergraduate and graduate students in the U.S. make up slightly less than 6% of the total U.S. higher education population, at Harvard, the share of international students is disproportionately high.
International students accounted for 27% of Harvard’s total enrollment in the 2024-25 academic year, up from 22.5% a decade earlier.
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President Donald Trump’s megabill includes an increased tax on the endowment income of the nation’s top colleges.
The Joint Committee on Taxation figures this endowment tax will bring in $761 million over 10 years.
Higher education experts say the new, higher tax rates could lead to revenue shortfalls and cause some schools to raise tuition prices, cut financial aid or both.

The “one big beautiful” tax-and-spending package President Donald Trump signed on Friday included several significant changes for higher education — among them, an increased tax on the endowment income of the nation’s top colleges.
Instead of the existing flat 1.4% tax rate, there is now a new multi-tiered rate of up to 8%, with larger endowments subject to the highest rate. (Schools with fewer than 3,000 tuition-paying students are exempt, regardless of their endowment size.)

The Joint Committee on Taxation estimates this endowment tax will bring in $761 million over 10 years. Higher education experts say the new, higher tax rates could lead to revenue shortfalls and cause some schools to raise tuition prices, cut financial aid or both.
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The exemption for schools with fewer than 3,000 tuition-paying students scaled back the plan from earlier versions of the GOP’s marquee legislation. “It’s not an endowment tax anymore, it’s a research university tax,” said Rick Grafmeyer, a partner at Capitol Tax Partners in Washington.
According to a recent analysis from Forbes, at least 11 colleges and universities — including many of the nation’s top research institutions — will have their endowment earnings taxed at an 8% or 4% rate in 2026, while five will pay a 1.4% tax. Previously, 56 universities paid about $380 million under that endowment tax rate.

Yale University.
Yana Paskova / Stringer (Getty Images)

Yale University warned that the tax hike would have immediate consequences for the school’s bottom line.

“Although the endowment tax is lower than what the House passed originally, it still means that Yale will pay an estimated $280 million in the first year it is in effect, and likely more in subsequent years,” Yale’s President Maurie McInnis said in a statement on July 3. Earlier versions of the proposal called for tiered rates as high as 21%.
The university announced before the bill passed that it had already implemented a temporary hiring freeze, lowered annual salary increases for faculty and staff members and delayed several construction projects at the school in anticipation of the tax increase and other federal actions.

Colleges to face ‘unprecedented fiscal challenges’

Higher endowment taxes, along with restrictions on international student enrollment and major cutbacks of federal and state funds, put many colleges in a precarious financial position, according to Robert Franek, editor in chief of The Princeton Review.
“Colleges, both private and public, are facing unprecedented fiscal challenges this year and en masse,” Franek said.
“Most concerning, for prospective students, is these factors may cause tuitions to be higher and reduce the amount of financial aid schools award,” he added.  
At some colleges, the higher endowment tax exceeds the college’s total financial aid budget, according to higher education expert Mark Kantrowitz, “making it difficult for colleges to continue to award very generous financial aid.”
Typically, when it comes to offering aid, wealthier institutions have more money to spend. Those generous aid packages remove the most significant financial barrier to higher education and help attract lower-income applicants. 

Tuition hikes are likely to follow the higher endowment tax, other experts also say. “We’re already seeing evidence that institutions are raising their sticker prices more than they have been in the past,” Phillip Levine, a fellow at the Brookings Institution and professor of economics at Wellesley College, told CNBC.
College tuition has surged by 5.6% a year, on average, since 1983, significantly outpacing other household expenses, a recent study by J.P. Morgan Asset Management found.
Going forward, “it doesn’t seem like 5% or 6% is out of line or beyond what schools are willing to do, and that’s at [both] public and private institutions,” Levine said. “And they’re doing this because they’re expecting revenue shortfalls.”
— Senior field producer Stephanie Dhue contributed to this report.
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The “big beautiful bill” includes a $6,000 additional deduction for certain older Americans ages 65 and over.
However, the legislation does not end federal income taxes on Social Security benefits.
Here’s how the changes in the bill may impact current and future retirees.

Republican presidential nominee former President Donald Trump speaks at a campaign rally in Asheville, N.C., Wednesday, Aug. 14, 2024.
Matt Rourke | AP

The Social Security Administration sent what experts say is a misleading email to consumers last week, describing President Donald Trump’s “one big beautiful bill” as “long-awaited tax relief to millions of older Americans.”
In that email and a July 3 press release, the agency said the legislation will make it so “nearly 90%” of Social Security beneficiaries no longer pay federal income taxes on benefits. It attributed that to an additional $6,000 senior deduction and another unspecified provision.

Tax experts say that is not accurate.
The legislation does not, as the agency put it, include “a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries.” Moreover, while the Social Security Administration memo said the law helps protect Social Security, experts say the provisions weaken the program’s funding by reducing the tax money it receives.
“It’s simply not correct to say that there’s a provision in this bill that is going to eliminate the Social Security benefit tax for 90% of the population,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.
“And it’s also just wrong to say that this is going to preserve the solvency of Social Security,” Gleckman said.
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Trump had said on the campaign trail that he planned to eliminate federal income taxes on Social Security benefits. However, the reconciliation process through which the budget and tax legislation was passed prohibits changes to Social Security.
The Social Security Administration did not return requests for comment. The White House deferred comment to the Social Security Administration.
The Council of Economic Advisers, an agency within the presidential executive office, estimates that changes in the legislation will help push the portion of seniors with exemptions and deductions exceeding Social Security income to 88%, from 64% under current law.
Those tax changes include a higher standard deduction, the existing senior deduction already in effect and the new additional senior deduction or “bonus.”

How the $6,000 senior ‘bonus’ works

The new tax package includes an additional deduction of up to $6,000 for seniors ages 65 and over.
While the additional senior deduction has been called a “bonus” in the legislative text, it is technically a deduction, which reduces the amount of income that is subject to taxes.
Notably, that does not necessarily mean seniors will see a $6,000 “bonus” check in the mail or in their refunds at tax time.
“This is not like what happened during Covid, when the government was writing checks to people,” Gleckman said.
Per the legislation, the deduction will be in place for tax years 2025 through 2028. It will be available to eligible taxpayers regardless of whether they take the standard deduction or itemize their returns.
But eligibility depends on income. Taxpayers with up to $75,000 in modified adjusted gross income — or up to $150,000 if married and filing jointly — may receive the full deduction. For incomes above those thresholds, the deduction gradually phases out.
Middle-income seniors stand to benefit the most from the change, according to tax experts.

How the bonus affects tax on Social Security benefits

A person holds a sign reading ‘Save Our Social Security’ in support of fair taxation near the U.S. Capitol in Washington, D.C. on April 10, 2025. Tax justice advocates attended a rally to speak out against President Trump’s tax cuts for the wealthy, and to urge members of Congress to intervene.
Bryan Dozier | Afp | Getty Images

Social Security benefits are taxed based on combined income, or the sum of adjusted gross income, nontaxable interest and half of Social Security benefits.
Individuals with between $25,000 and $34,000 in combined income may have up to 50% of their Social Security benefits taxed. If their combined income is more than $34,000, up to 85% of their benefits may be taxed.
For married couples with combined income between $32,000 to $44,000, up to 50% of their benefits may be taxed. If they have over $44,000, up to 85% of their benefits may be taxed.
Those thresholds are not adjusted for inflation, which means that over time more beneficiaries pay taxes on their benefits.
Because the new senior bonus is an above-the-line deduction, meaning it is subtracted from gross income to calculate adjusted gross income, it may indirectly reduce tax liability on Social Security benefits.

Who may benefit from the senior ‘bonus’

The additional senior deduction will not affect taxes on Social Security benefits for individuals and couples below those income thresholds, since they already are not subject to levies on their benefits, Gleckman said.
Nor will it help people who earn too much to qualify for the new deduction. Higher-income individuals and married couples with more than $75,000 or $150,000 in modified adjusted gross income, respectively, may not see their Social Security benefit taxes reduced, unless they are in the phaseout window.
For taxpayers who qualify, the senior deduction may reduce, rather than eliminate, their taxes on benefits, Gleckman said. The Urban-Brookings Tax Policy Center estimates that fewer than half of older adults will benefit from the senior deduction, he said.
Even those who benefit won’t necessarily see zero taxes; they’ll just see fewer taxes, Gleckman said.
“The people who benefit the most, we estimate, are people who made between $50,000 and $200,000,” Gleckman said.

The legislation may be more generous to seniors than to taxpayers in other age cohorts, said Alex Durante, senior economist at the Tax Foundation.
“The enhanced adoptions overall are going to reduce tax liabilities for seniors significantly, and for some people, it will probably wipe out any tax liability they have,” Durante said.
“But it depends on where they are in the income distributions,” he said.

How ‘big beautiful bill’ affects Social Security funding

While certain seniors may see financial benefits now, the enhanced senior deduction will cost the Social Security program, which is already under financial strain.
The new additional senior deduction and other changes in Trump’s “big beautiful bill” may reduce taxation of Social Security benefits by approximately $30 billion per year, estimates the Committee for a Responsible Federal Budget.
That would accelerate the projected insolvency date for the Social Security trust fund devoted to retirement benefits to late 2032, up from the currently projected date of early 2033, according to CRFB.

To help shore up the program’s funds, Congress faces a choice of raising taxes, cutting benefits or a combination of both.
The sooner any changes are enacted, the more time there is for them to be phased in, according to experts.
“Every year we delay reforming the program means those changes will have to be steeper and affect more people closer to retirement age,” CRFP President Maya MacGuineas wrote in a recent op-ed. More

Dado Ruvic | Reuters

President Donald Trump’s announcement of a U.S.-Vietnam trade deal and a solid June jobs report lifted stocks last week, but investors can still find plenty of opportunities to snap up names at attractive levels.
The recommendations of top Wall Street analysts can help inform investors as they search for the stocks of companies with strong fundamentals and solid growth opportunities.  

Here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

Dell Technologies

This week’s first stock pick is Dell Technologies (DELL), a provider of IT hardware, software, and services.
Following meetings with management, Evercore analyst Amit Daryanani reiterated a buy rating on Dell with a price target of $150. Meanwhile, TipRanks’ AI analyst has an “outperform” rating on DELL with a price target of $128.
Notably, Daryanani stated that he came away from the meetings incrementally positive about Dell’s ability to deliver high-single-digit revenue growth and a double-digit increase in earnings per share (EPS) and free cash flow (FCF). His optimism is backed by the initiatives taken by the company over the past two years to optimize its cost structure and tailwinds from key AI (artificial intelligence) investments.
Among the key takeaways from the meetings, the analyst highlighted that the AI server margins are turning out to be better than initially expected, with Dell earning a premium compared to rivals while delivering impressive growth. He also pointed out the company’s innovations in its infrastructure offerings, with its internal liquid cooling capabilities becoming a more vital part of its strategy.

Daryanani added that Dell expects to benefit from acceleration in enterprise AI adoption over the next five to seven years. In fact, the company believes that higher-margin enterprise customers could account for the vast majority of AI server sales over time. Daryanani also noted Dell’s confidence about navigating tariff woes, given that it “believes its diversified and global footprint is an advantage over its competitors.”
Daryanani ranks No. 187 among more than 9,600 analysts tracked by TipRanks. His ratings have been profitable 63% of the time, delivering an average return of 14.8%. See Dell Technologies Stock News and Insights on TipRanks.

Trade Desk

We move to Trade Desk (TTD), a cloud-based advertising platform that providers advertisers with cutting-edge technology to find new audiences and grow their brands.
Recently, Evercore analyst Mark Mahaney upgraded Trade Desk stock to Buy from Hold with a price forecast of $90. Interestingly, TipRanks’ AI analyst has an “outperform” rating on TTD stock, but with a lower price target of $83. Mahaney views the pullback in TTD stock as an attractive buying opportunity “to get involved again in what has proved over time to be one of the highest quality and most consistent performers across the Internet landscape.”
Explaining his bullish stance, Mahaney stated that recent checks have indicated that online ad demand sentiment has clearly improved since April/May, though uncertainty about the second half of the year remains significant. He added that the checks reflect a clear improvement in Trade Desk’s execution. Also, solid product announcements, like that of Deal Desk, helped address some concerns about the transition from the company’s legacy platform Solimar to the AI-powered Kokai platform.
Mahaney mentioned that checks indicated a clear improvement in the company’s execution, both on product and go-to-market strategy. While the analyst acknowledged increasing competition from Amazon’s demand-side platform (DSP), he highlighted that Google’s DV360 and not Trade Desk is more likely to be impacted due to its overlap with the areas where AMZN is strong.   
Finally, Mahaney thinks that Trade Desk’s set-ups for the remainder of fiscal 2025 look quite achievable, with his billings analysis suggesting that the company is very likely to exit 2025 at premium growth levels (excluding political spend). He sees significant catalysts for 2026 such as the World Cup, the Winter Olympics and the full-year Kokai impact.
Mahaney ranks No. 214 among more than 9,600 analysts tracked by TipRanks. His ratings have been successful 60% of the time, delivering an average return of 16.0%. See Trade Desk Ownership Structure on TipRanks.

Amazon

This week’s third pick is e-commerce and cloud computing giant Amazon (AMZN). In a research note dated July 1, Jefferies analyst Brent Thill reaffirmed a buy rating and increased the Amazon stock price forecast to $255 from $250. Meanwhile, TipRanks’ AI analyst has assigned an “outperform” rating on AMZN stock with a price target of $233.
Thill raised his price target after Jefferies’ proprietary survey of nearly 700 U.S. consumers in mid-/late June indicated that Amazon “remains resilient despite price increases related to tariffs, with stable spend levels and upside if pricing on other websites becomes more expensive.”
The analyst noted that although 80% of the respondents are concerned about prices, the survey reflected a stable spending pattern by most Amazon shoppers (62% spent the same or more in the past three months). However, the survey noted some cost-conscious behavior, as 31% spent less in the past three months.
Thill highlighted that the survey also reflected that Amazon Prime remains the most popular membership and a major loyalty driver for the company. Notably, 73% of respondents reported having a Prime membership, compared to 26% for rival Walmart. He also noted Amazon’s superior positioning on fast and free shipping, selection, and low prices.
The analyst said that given the heightened focus on prices, Amazon’s Prime Day event could turn out to be more popular and impactful by running for four days instead of two (from July 8 to July 11 vs. July 16 to July 17 in 2024) across 20 countries. He expects the event to result in incremental Prime memberships, particularly among students and young adults ages 18 to 24 via six-month extended free trials.
Thill ranks No. 109 among more than 9,600 analysts tracked by TipRanks. His ratings have been successful 67% of the time, delivering an average return of 15.2%. See Amazon Insider Trading Activity on TipRanks. More

About 78% of survey respondents say President Donald Trump’s tariffs will make it harder to manage or repay debt, according to a recent report by Zety, a resume templates site.
As interest rates stay higher for longer, here are three ways to manage debt, according to experts.

Studio4 | E+ | Getty Images

As President Donald Trump continues to negotiate the rate of tariffs that countries will ultimately pay to do business with the U.S., Americans are already feeling the pinch of higher prices — and many worry about their ability to pay down debt. 
About 78% of survey respondents say Trump’s tariffs, or taxes on imported goods, will make it harder to manage or repay debt, according to a recent report by Zety, a resume templates site. The survey polled 1,005 U.S. employees on April 12.

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Trump’s trade policy has included threatening sharply higher tariffs, and then changing his stance soon after, as a negotiating tactic with other nations.
“Tariffs are clearly one of his favorite tools in the toolbox,” said Mark Hamrick, senior economic analyst at Bankrate.

What tariffs mean for consumers’ debt

The administration’s tariff policy will make prices on many everyday goods go up. According to a mid-June report by the Budget Lab at Yale University, tariffs could cost an average $2,000 per household in 2025. The analysis is based on tariffs in place as of June 16.
Tariffs have also influenced the interest rates consumers pay on their debt. Levies have added to uncertainty in the economy, leaving the Federal Reserve reluctant to lower its benchmark rate.

Federal Reserve Chair Jerome Powell said during a panel on Tuesday that the central bank would have cut rates this year if not for the president’s tariff plan.
The Fed has held interest rates steady at 4.25%-4.5% since December.
While that federal funds rate sets what banks charge each other for overnight lending, it also directly impacts borrowing and savings rates for Americans. In fact, the bank’s inaction on rates has kept credit card rates near record highs. 
It’s important to create a strong “financial foundation” as uncertainty in the economy lingers, according to Matt Schulz, the chief credit analyst at LendingTree.
“Put yourself in the best possible situation by building your emergency savings and knocking down that high-interest debt,” Schulz said.
Here are three ways to get a handle on your debt despite economic headwinds, according to experts.

1. Ask your lender for a better rate

The first thing you want to do is contact your lender or credit card issuer and ask if they are able to lower your annual percentage rate, experts say.
The APR is generally the total borrowing cost of the loan plus any additional fees, per the Consumer Financial Protection Bureau. 

The average interest rate on credit cards is 24.33%, according to LendingTree. But the rate your issuer offers depends on factors like your credit history.
If you have “really good credit,” you can expect to be offered a 20.79% APR; but if your credit is not so stellar, the rate you pay could be as high as 27.87%, the site found.

2. Apply for a 0% balance transfer card

Look into a 0% balance transfer credit card, which is “the best weapon that you have in the fight against credit card debt,” said Schulz.
These offers allow you to move existing credit card debt to a new card and pay little to no interest charges for a set period of time, making a “huge difference,” he said.
But do your homework before you apply and pick the card that best suits your situation, Schulz said.  
Bankrate’s Hamrick notes, however, that these kinds of balance transfer options are typically reserved for those with good credit. You generally need a credit score of 690 or higher to qualify, and you might incur a transfer fee in addition to other requirements, according to NerdWallet.

3. Pay debt with a low-interest personal loan

A low-interest personal loan “can be a really good choice” to pay off credit card debt because you can “knock your interest rate down,” Schulz said.
Borrowing costs for personal loans tend to be lower than interest rates on credit cards. But many factors can determine the rate you get for a personal loan, including your credit history and your servicer, per NerdWallet. 

For example, the average APR for a two-year personal loan from a commercial bank was 11.66% in February, according to the Federal Reserve. Meanwhile the average rate on a three-year loan through a credit union was 10.75% in March, per National Credit Union Administration.
Be mindful that there is risk involved because you are taking on a new line of credit, and you are tied to a static loan payment for a period of time, Schulz said.  More

The state and local tax deduction, known as SALT, provides a federal deduction for state and local income taxes and property taxes.  
Under President Donald Trump’s 2017 tax cuts, there’s currently a $10,000 limit on the SALT deduction through 2025.
Passed early Thursday, Trump’s “big beautiful bill” includes a temporary SALT limit of $40,000 starting in 2025. That benefit begins to phase out, or decrease, after $500,000 of income.
Both figures would increase by 1% each year through 2029 and the cap would revert to $10,000 in 2030. 

U.S. House of Representatives Speaker Mike Johnson speaks after the U.S. President Donald Trump’s sweeping spending and tax bill passes, on Capitol Hill in Washington, D.C., U.S., July 3, 2025.
Umit Bektas | Reuters

House Republicans on Thursday approved President Donald Trump’s “big beautiful bill,” which includes changes to the limit for federal deduction for state and local taxes, known as SALT.
When you itemize tax breaks, you can claim the SALT deduction, which includes state and local income taxes and property taxes.

Trump’s 2017 tax cuts added a $10,000 cap on the SALT deduction through 2025, which has been a key issue for certain lawmakers in high-tax blue states. Before 2018, the SALT deduction was unlimited but curbed by the alternative minimum tax for some wealthier households.
The Republicans’ marquee legislation temporarily raises the SALT deduction limit to $40,000 starting in 2025. That benefit starts to phase out, or decrease, for consumers who earn more than $500,000 of income. Both figures will increase by 1% yearly through 2029 and the higher limit will revert to $10,000 in 2030. 
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Compared with an earlier approved House bill, SALT deduction relief is two-thirds larger in Trump’s legislation, including alternative minimum tax changes, according to an analysis published Saturday by the Committee for a Responsible Federal Budget. 
Trump’s legislation also reduces itemized deductions for certain taxpayers in the top, 37%, income tax bracket, which lowers the benefit of the bigger SALT cap for the highest earners.

Who claims the SALT deduction

When filing taxes, you pick the greater of the standard deduction or your itemized deductions, which include SALT capped at $10,000, medical expenses above 7.5% of your adjusted gross income, charitable gifts and others.
Starting in 2018, the Tax Cuts and Jobs Act doubled the standard deduction, and it adjusts for inflation yearly. For 2025, the standard deduction is $15,000 for single filers and $30,000 for married couples filing jointly. Under Trump’s legislation, these standard deductions will increase to $15,750 and $31,500, respectively.
Under the current thresholds, the vast majority of filers — roughly 90%, according to the latest IRS data — use the standard deduction and don’t benefit from itemized tax breaks.
In 2022, the average SALT deduction was close to $10,000 in states such as Connecticut, New York, New Jersey, California and Massachusetts, according to a Bipartisan Policy Center analysis with the latest IRS data. Those high averages indicate “that a large portion of taxpayers claiming the deduction bumped up against the $10,000 cap,” researchers wrote.
Meanwhile, the states and district with the highest share of SALT claimants were Washington, D.C., Maryland, California, Utah and Virginia, the analysis found.

Arrows pointing outwards

Higher SALT cap benefits ‘wealthy taxpayers’

Raising the SALT deduction cap would primarily benefit higher earners, according to a May analysis from the Tax Foundation. 
Trump’s legislation also protects a SALT cap workaround for pass-through businesses, which allows owners to sidestep the $10,000 cap. By contrast, the previous version of the House-approved bill would have ended the strategy for certain white-collar professionals. 
Chye-Ching Huang, executive director of the Tax Law Center at New York University School of Law, criticized the Senate-approved SALT provisions in a post on X on Saturday.
“It preserves (and lessens) a limit on deductions for wealthy taxpayers while ignoring a loophole that allows the wealthiest of those taxpayers to avoid the limit entirely,” she wrote.  More