With their 2025 taxes, millions of taxpayers are receiving greater refunds. For individuals who qualify for the deduction, there are larger savings for state and local property taxes.
This year, SALT has been delightful for taxpayers.
The first tax season under the GOP’s One Big Beautiful Bill Act has been going well for those who have been able to benefit from a significantly bigger federal deduction for state and local taxes paid, one of many tax advantages in a massive new tax law.
Income-tax refunds are 11% higher than they were a year ago, according to Internal Revenue Service statistics, thanks to a number of new tax benefits included in the 2025 law, such as deductions for tips, overtime, and older people.
As filing season drew to an end, the Treasury Department reported on Wednesday that over 53 million taxpayers had claimed at least one of the new deductions. This comprises over 25 million homes with an average overtime deduction of $3,100 and over 30 million households with an average deduction of over $7,500 for the senior bonus. That’s a big reach. Nearly 100 million returns have been filed with the IRS thus far.
According to the Treasury Department, households claiming one of the new deductions received an average of more than $800 in additional funds.IRS CEO Frank Bisignano stated during a Senate Finance Committee hearing on Wednesday that working Americans and their families will truly benefit from this. According to him, the tax department has already paid out more money overall and issued more refunds than it did the previous year.
Some forecasters predicted that refunds would increase by much to $1,000 this year as tax season got underway.
People who have been able to claim the bigger SALT deduction, which raised to $40,000 from $10,000 under the new legislation, are likely to receive higher income-tax returns. (Until the Republican tax code rewrite in the first year of Donald Trump’s first term in office, it was almost limitless.)
Members of Navy Federal Credit Union nationwide are receiving an average tax refund of $3,480, which is 12% more than a year ago. The IRS refund averages and the credit union’s numbers are extremely similar.
According to IRS data, refunds averaged $3,462 as of early April, up from $3,116 a year earlier.
States with higher state income tax rates and greater property tax payments are also among those where taxpayers saw the biggest refund increases this year.
Refund amounts for Navy Federal members in California increased by 22%. The largest gain in the nation was a $685 rise in their refunds. This year, members received an average refund of $3,815.
According to the data-analytics company ATTOM, areas like Marin County and San Mateo County had among of the highest property-tax bills in the nation last year.
In the meantime, refunds for credit union members in New Jersey increased by 16%, or $520, to an average of $3,800. According to ATTOM data, the Garden State had the highest property tax bills in the country last year, averaging $10,499.
In Ohio, tax refunds for Navy Federal members increased by $620 to an average of $3,290, a 23% increase. According to ATTOM data, Ohio had one of the highest effective property-tax rates in the nation. This year, the Buckeye State reduced its income tax rates to a flat 2.75%.According to Parker West, vice president of analytics in Navy Federal Credit Union’s membership and deposit products division, “the increase in tax refunds this year varies widely by state, reflecting benefits from the One Big Beautiful Bill Act to those members with higher state tax burdens.”
In a late March report, Wells Fargo economists stated that middle- and upper-middle-class households would benefit “most significantly” from the new tax cuts, particularly from the increased SALT deduction.
According to researchers at the Tax Foundation in January, the 2025 plan would reduce Americans’ taxes by an estimated $129 billion this year. The greater SALT deduction made up more over $32 billion of that total. After the overtime deduction, which could reduce Americans’ overall tax liability by $38.7 billion, it was the second-largest tax decrease.
The problem for GOP lawmakers might be this: The majority of taxpayers who take the SALT deduction are wealthy and primarily reside in states with a Democratic tilt. Despite criticism that the break was a significant victory for a small group of households, Republican lawmakers’ “SALT caucus” managed to get the larger deduction into the bill as they worked out the new tax law last summer.
See also: Homeowners: The SALT deduction will reach $40,000. Here’s how to make the most of it.
Up until 2029, the higher SALT cap is in effect. Up to 2028, there are deductions for tips, overtime, elderly, and interest on auto loans made in the United States.
Households earning less than $150,000 for individuals or $300,000 for married couples are eligible for the tip deduction, which is worth up to $25,000 annually. The maximum deduction for overtime is $12,500 for individuals and $30,000 for married couples. In the meanwhile, married couples and individuals making less than $500,000 are eligible for the SALT deduction.
Instead of using the popular standard deduction, taxpayers must itemize in order to take the SALT deduction. Access to additional tax benefits, such as the mortgage-interest deduction and the charitable contribution deduction, is made possible by itemizing. For the 2026 tax year, the itemized deduction for donations will be somewhat more stringent.
Through 2029, the maximum deduction for the SALT tax benefit will rise somewhat annually.
According to a Bipartisan Policy Center survey published this month, the larger SALT deduction is not as well-liked as other perks of the new law.
According to the study, the two most popular benefits of the new law were the larger standard deduction and the new senior bonus. Last was the greater SALT deduction.
According to the study, those who earned more than $150,000 were more likely to report receiving a much bigger return this year.
According to Andrew Lautz, head of tax policy at the think group, higher-income taxpayers are undoubtedly benefiting from the increased SALT ceiling. He told MarketWatch that this is probably one of the reasons why a “meaningful share” of high-income households claim to have been receiving noticeably greater refunds.SALT is a part of the narrative, even though some members of that cohort might also be claiming tips or overtime deductions, according to Lautz.
