Richey May’s Inside the One Big Beautiful Bill Act video series is designed to help mortgage lenders and other industry-affiliated businesses understand what this sweeping legislation means in practice, not just in theory. Hosted by Kenny Burch, Director, Mortgage Banking Tax, the series features focused conversations with experts from Richey May’s Mortgage Banking Tax team, each examining a specific provision of the Act and its implications.
In this episode, Kenny is joined by Jeff Lloyd, Senior Tax Manager, to break down two closely related and often misunderstood topics: the state and local tax (SALT) deduction and passthrough entity tax (PTET) elections. Together, these provisions play a critical role in how mortgage banking organizations and their owners manage deductible taxes, particularly as taxable income returns and planning windows tighten.
Key Takeaways from the Episode
- The SALT deduction remains capped but with temporary relief: The SALT cap increases to $40,000 beginning in 2025 before gradually phasing back down, creating a narrow planning window for eligible taxpayers.
- Income-based phaseouts add complexity: For higher earners, the expanded SALT deduction begins to phase out at higher income levels, reducing but not eliminating the benefit.
- PTET elections continue to bypass the SALT cap: Passthrough entity tax elections remain a viable workaround, allowing state taxes paid at the entity level to reduce federal taxable income without relying on Schedule A deductions.
- Timing and elections matter more than ever: PTET benefits depend on making timely elections and payments, often before original return due dates. Miss the window, and the deduction may be lost.
- Entity structure directly affects owner-level outcomes: The type of return filed and how taxes are paid can significantly influence how much owners ultimately deduct on their personal returns.
These rules create opportunity, but only for organizations that actively plan ahead rather than react after returns are filed.
Watch the full episode below to hear Kenny and Jeff walk through how the SALT cap and PTET deductions work under the One Big Beautiful Bill Act, including detailed examples, and what mortgage lenders should be considering now.
Continue the Conversation
This episode is part of the Inside the One Big Beautiful Bill Act series, which explores additional provisions shaping the mortgage banking tax landscape. Visit the series page to watch other episodes and stay current as new guidance continues to emerge.
If you have questions about how PTET elections, the SALT cap, or any aspect of the One Big Beautiful Bill Act may impact your organization, the Richey May Mortgage Banking Tax team is available to help.
