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1 1 (April 30, 2026)

handle is hein.crs/goveuil0001 and id is 1 raw text is: Congressional ~ 'a Research Service ~ ~nforni~ng he I g iat'v debate ince 14 The 2/37ths Limitation on Itemized Deductions April 30, 2026 In July 2025, as part of the FY2025 reconciliation law (P.L. 119-21), Congress enacted a new limitation on itemized tax deductions for high-income taxpayers. This Insight describes itemized tax deductions, explains how the new limitation works, and analyzes the limitation's effects. Itemized Deductions: Background and Distributional Impact When Americans file their income tax returns, they may use deductions to exempt certain amounts of income from taxation. For example, a taxpayer with $100,000 of income who claims deductions totaling $20,000 will have a taxable income of $80,000. There are four broad types of deductions: (1) above-the-line deductions; (2) the standard deduction; (3) itemized deductions; and (4) other deductions. Above-the-line deductions and other deductions may be claimed by all taxpayers, though taxpayers must claim either the standard deduction or itemized deductions. The standard deduction allows taxpayers to reduce their taxable incomes by certain amounts-$16,100 for single filers, $24,150 for head-of-household filers, and $32,200 for married couples in 2026 (amounts are adjusted annually for inflation). Itemized deductions are claimed for certain expenses paid by the taxpayer. As shown in Table 1, three particular expenses-charitable contributions, mortgage interest, and state and local tax (SALT) payments-constitute about three-quarters of all itemized deduction amounts. Congressional Research Service https://crsreports.congress.gov IN12686 CRS INSIGHT Prepared for Members and Committees of Congress -