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The One Big Beautiful Bill Act (OBBBA) is changing the game for many Connecticut taxpayers, especially homeowners in high-property-tax towns like West Hartford, Glastonbury, Madison, and more. Here’s what you need to know and how to take advantage of it.
The New Rule at a Glance
The OBBBA raises the federal deduction cap for state and local taxes (SALT) from $10,000 to $40,000 per return starting in 2025 through 2029. After that, the cap returns to $10,000 in 2030.
To qualify for the full benefit:
- Modified Adjusted Gross Income (MAGI) must be $500,000 or less
- You must itemize deductions (not take the standard deduction)
“For homeowners in Connecticut, the bigger SALT cap could be the single largest federal tax break they’ve seen since 2017, but only if they plan before filing their 2025 return.”
— Ben Fuchs, CFP®, CPWA®, Founder, Fuchs Financial
Why It Matters in Central & Shoreline Connecticut
Many towns in Hartford, Middlesex, New London, and New Haven counties face high property-tax burdens and above-average household incomes which means their SALT exposure often far exceeds the old $10,000 limit.
Here’s a breakdown:
| Town | Median Property Tax (2023) | Median Household Income | Est. State Income Tax (4.5%) | Total SALT Exposure | Now Deductible | Est. Fed Tax Cut |
|---|---|---|---|---|---|---|
| West Hartford | $9,056 | $125,616 | ~$5,650 | $14,709 | $4,709 | ~$1,040 |
| Glastonbury | $8,586 | $150,290 | ~$6,760 | $15,349 | $5,349 | ~$1,280 |
| Madison | $8,230 | $168,341 | ~$7,575 | $15,805 | $5,805 | ~$1,390 |
| Guilford | $8,548 | $130,036 | ~$5,850 | $14,400 | $4,400 | ~$970 |
| East Lyme | $6,564 | $107,667 | ~$4,845 | $11,409 | $1,409 | ~$310 |
| Essex | $6,468 | $100,767 | ~$4,535 | $11,003 | $1,003 | ~$220 |
*Federal savings assume a 22% marginal tax rate (24% for Glastonbury & Madison).
*State income tax is estimated at 4.5% on median household income.
Key Takeaway:
Even in towns like East Lyme or Essex, homeowners may save a few hundred dollars annually. In West Hartford, Glastonbury, and Madison, the average federal tax savings could top $1,000 to $1,400 per year through 2029.
What Connecticut Homeowners Should Do Now
Take advantage of the new deduction window with some smart planning:
| Action | Why It Matters |
|---|---|
| Re-run your itemization math | With SALT alone above $11K–$16K, many households can now beat the $31,500 standard deduction (married filers). |
| Pre-pay big expenses | Pay January 2026 property taxes in December 2025 to bunch deductions. |
| Consider charitable giving strategies | Donor-advised funds or bunching donations could help you stack itemized deductions. |
| Be aware of AMT and income limits | Households nearing the $500K MAGI cap should plan ahead. |
| Plan for the 2030 cliff | Mortgage prepayments or refinancing may have more benefit before the cap snaps back. |
How Fuchs Financial Can Help You Navigate The New SALT Cap
We offer a number of planning tools to help you maximize the new SALT cap:
- Portfolio-agnostic tax projections
- Itemize vs. standard deduction calculators
- Six-county real estate tax benchmarks
- Live client webinars in August
📞 Call us at 860-461-1709 or visit fuchsfinancial.com/get-in-touch to book a free 15-minute phone call consultation
