House lawmakers on Thursday morning passed changes for the federal deduction for state and local taxes, known as SALT, as part of President Donald Trump‘s tax package.

Enacted via the Tax Cuts and Jobs Act, or TCJA, of 2017, there’s currently a $10,000 limit on the SALT deduction, and raising that cap has been a priority for certain House lawmakers in high-tax states like New York, New Jersey and California. Filers must itemize deductions to claim the tax break for SALT.

If the House provision is enacted, the SALT cap would rise to $40,000, up from $30,000 in the previous plan, and phases out over $500,000, according to revised language released by the House Rules Committee. The provision would go into effect in 2025.

The SALT cap and income phaseout would increase annually by 1% from 2026 through 2033, according to the text.

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The revised text would also reduce itemized deductions for certain taxpayers in the 37% income tax bracket, which could reduce the benefit of the higher SALT cap.

For 2025, the top rate of 37% applies to individuals with taxable income above $626,350, and married couples filing jointly earning $751,600 or more.

However, the House proposal for changes to the SALT deduction could still face pushback in the Senate.

When filing taxes, you pick the greater of the standard deduction or your itemized deductions, including 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. These could increase under the House-proposed tax bill.

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.

“Any changes to lift the cap would primarily benefit higher earners,” Garrett Watson, director of policy analysis at the Tax Foundation, wrote in an analysis on Tuesday.

With an income phaseout over $400,000, the top 20% of taxpayers “would be the only group to meaningfully benefit,” Watson wrote.

But members of the so-called “SALT Caucus” argue the SALT deduction limit is a middle-class issue in their districts.

Rep. Josh Gottheimer, D-NJ., co-chair of the SALT Caucus, told CNBC’s “The Exchange” on Tuesday that a full repeal of the $10,000 SALT deduction limit would be a “huge tax cut and benefit for middle-class families around the country.”    

As Republicans push forward with the “big, beautiful” tax bill, federal food assistance may see big cuts.

The Supplemental Nutrition Assistance Program, or SNAP, may be cut about 30% under the terms of the bill, which would be the “biggest cut in the program’s history,” according to Ty Jones Cox, vice president for food assistance policy at the Center on Budget and Policy Priorities.

SNAP, formerly known as food stamps, currently provides food assistance to more than 40 million individuals including children, seniors and adults with disabilities.

Yet cuts to the program proposed by the House — which would shrink the program’s funding by about $300 billion through 2034 — would put those benefits at risk.

“The House Republican plan would take away food assistance for millions who struggle to afford the high cost of groceries, including families with children and other vulnerable people with low incomes,” Cox said during a Tuesday webinar hosted by the CBPP, a progressive think tank.

The SNAP reform efforts come amid a broader effort to reduce waste and fraud in government programs. SNAP, like other government benefits, can be susceptible to improper or fraudulent payments.

The “one big, beautiful bill restores integrity to the Supplemental Nutrition Assistance Program,” House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., said in a May 14 statement, through “long-overdue accountability incentives to control costs and end executive and state overreach.”

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Many Americans cite high food costs as a top economic concern, according to an April Pew Research Center survey. If new tariff policies are put into effect, that could prompt food prices to go higher.

Moreover, the proposed SNAP cuts come as some experts say the U.S. is facing higher recession risks. In previous downturns, every additional dollar spent on SNAP generates about $1.54 in returns to the economy, according to Elaine Waxman, senior fellow at the Urban Institute’s tax and income support division.

“People spend SNAP dollars right away, and they spend them locally,” Waxman said.

The proposed SNAP cuts would largely happen by expanding work requirements to qualify for benefits and by cutting federal funding for food benefits and administration and leaving it up to states to make up the difference.

The largest cut to SNAP would come from federal funding cuts to basic SNAP benefits ranging from 5% to 25% starting in 2028, according to CBPP.

It would then be up to states to find ways to make up for that benefit shortfall, which could include making it more difficult to enroll in the program or finding other localized cuts to the program, according to CBPP.

“The change in the bill that is most dramatic is asking states to share part of the benefit cost,” Waxman said. “That’s new; since SNAP was originated, the federal government has always paid the full cost of the benefits.”

Notably, it would also mark the first time in the history of SNAP that the federal government would no longer ensure children in every state have access to food benefits, according to CBPP.

In addition, the proposal also seeks to make it so states pay a larger portion of the program’s administrative costs.

How states may react to the changes may vary. In worst-case scenarios, some states could even opt out of the program altogether, according to CBPP.

However, Waxman said most states will likely try to protect benefits because they’re “so critical,” even though they are not legally obligated to offer the program.

“The vast majority, if not all, will try to do something,” Waxman said.

In addition to the benefits SNAP provides to individuals and families, it also provides an “integral” part of economies, Waxman said. In lower-income rural areas, for example, rural grocery stores that rely on SNAP customers would see food spending go down.

“It has all these ripples that will hurt a lot of people other than just the people who are on the program,” Waxman said.

Expanded work requirements would affect 2.7 million families and 5.4 million individuals, according to a new report from the Urban Institute.

That includes 1.5 million families who would lose benefits entirely and 1.2 million families who would receive lower benefits. It also includes 1.8 million people, including 48,000 children, who would lose benefits entirely; and 3.6 million people, including 1.5 million children, who would receive lower benefits, according to the Urban Institute.

Families that lose some or all their benefits would lose $254 per month on average, according to the research. Meanwhile, families with children would lose $229 per month on average, the Urban Institute found.

The Senate on Tuesday unanimously passed the No Tax on Tips Act in a surprise vote, which could boost momentum for an idea floated by President Donald Trump during his 2024 campaign. 

If enacted, the legislation would create a federal income tax deduction of up to $25,000 per year, with some limitations. The tax break applies to workers who typically receive cash tips reported to their employer for payroll tax withholdings, according to a summary of the bill. 

To qualify for the deduction, there’s a $160,000 earnings limit for 2025. That limit would be indexed for inflation yearly.

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Currently, workers who receive cash tips of $20 or more monthly must report those earnings to employers, according to the IRS. Cash tips can include funds received directly from customers, tip-sharing from other employees or tips paid via credit card.

During the 2024 presidential campaign, Trump and Vice President Kamala Harris both called for no tax on tips during appearances in Nevada.

The bill advanced by the House Ways and Means Committee last week also includes a no tax on tips provision. If enacted, workers could deduct all “qualified tips” from 2025 through 2028. Tips must be reported to qualify for the deduction. However, this could still change before the full House floor vote.

“Whether it passes free-standing or as part of the bigger bill, one way or another, no tax on tips is going to become law and give real relief to hard-working Americans,” Sen. Ted Cruz, R-Texas., said from the Senate floor on Tuesday. 

Cruz introduced the bipartisan bill in January with Sens. Jacky Rosen and Catherine Cortez Masto from Nevada.

In 2023, there were roughly 4 million U.S. workers in tipped occupations, representing 2.5% of all employment, according to estimates from The Budget Lab at Yale University.

“This is a very narrow subset of the workforce,” said Alex Muresianu, senior policy analyst at the Tax Foundation. 

Tipped occupations include jobs in restaurants and hotels, as well as courier services like taxis, rideshares and food delivery services, he said.

What’s more, a good chunk of tipped workers are part-time employees, and they wouldn’t see a significant benefit from a tip exemption, he said. Many such workers already don’t pay federal income tax because their earnings fall under the standard deduction.

“For the lowest income tipped workers, it provides no marginal benefit” Muresianu said. “It would benefit moderate to middle income workers substantially.”