ALBANY — A new $40,000 limit on state and local tax deductions, known as SALT, would be a win for many New Yorkers, tax analysts told Newsday, but provisions in the bill the Senate passed Tuesday could limit the number of people who benefit.

Those who stood to benefit the most from an increased cap on deductions were those earning between $450,000 and $1.1 million, particularly in high cost-of-living areas, said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, a nonpartisan think tank based in Washington, D.C.

But the bill passed by the Senate sets an income threshold, so only those earning $500,000 or less could take advantage of the full $40,000 cap. The cap would remain at $10,000 for those earning $600,000 or more.

The bill also raises the “standard deduction,” allowing more people to take advantage of the higher deduction and reducing the number of people itemizing and taking advantage of the increased SALT cap, tax analysts said.

"Now you're talking about a much narrower band of people who benefit," Gleckman told Newsday. "This is a little bit about economics, but this is really mostly about poltiics."

The SALT deduction allows filers who itemize to subtract some of their state and local taxes from their taxable income. The $10,000 cap on SALT was put in place in 2017 as part of the sweeping federal Tax Cuts and Jobs Act. The cap hit those with high incomes and high property values hard, particularly those in expensive states like New York and especially on Long Island, which has some of the highest property taxes in the nation.

Members of Congress are working to extend provisions of the 2017 tax law that are set to expire at the end of 2025.

The U.S. Senate passed its version of the bill in a 51-50 vote on Tuesday, largely along party lines, and the House narrowly passed its version in a 215-214 vote on May 22. The bill now goes back to the House for final approval — though lawmakers must agree on the final language. Trump has been pushing for Congress to pass the measure before the Fourth of July.

"This is a significant upgrade, a significant amount of SALT that will provide real tax relief,” Rep. Mike Lawler (R-Pearl River) told Newsday, adding, “This is something we’re fighting to get across the finish line.”

The SALT deduction is one of the five main categories of itemized deductions, along with mortgage interest, medical or dental expenses, charitable contributions and casualty, disaster and theft loss, said Kenneth Winkelman, an associate professor and chair of the Accounting, Taxation and Business Law Department at SUNY Old Westbury.

Long Islanders with high local taxes, high mortgages and high medical costs, who currently can deduct only up to $10,000, would benefit from an increased SALT cap, he said.

While those earning between $92,100 and $361,400 could see some benefit from a $40,000 cap among other deduction changes in the federal bills, those earning between $361,400 and $916,900 would see a greater benefit of over $2,720 on average, according to an analysis done by the Institute on Taxation and Economic Policy, a D.C.-based nonpartisan tax policy think tank. Due to other deductions and credits, the wealthiest Americans would see the greatest tax relief, according to the institute.

But the income threshold narrows the impact. Taxpayers earning $500,000 or less could take advantage of the $40,000 cap and it would phase out incrementally above that. So those earning $600,000 or more would not benefit from the cap increase, as their SALT deductions would remain capped at $10,000.

With the threshold, it’s really aimed at helping those earning $200,000 to $500,000, said Andrew Lautz, associate director of economic policy for the Bipartisan Policy Center, a D.C.-based think tank.

Wealthy business owners, however could still benefit from the Senate bill, which allows a workaround known as a "pass through," meaning they can fully deduct their state and local taxes through their businesses instead of their personal income taxes, Gleckman said. These loopholes were enacted in 36 states including New York and would continue under the Senate bill, he said.

The bill also increases the standard deduction, which currently is set for $15,000 for single filers and $30,000 for married filers for the 2025 tax year, according to the Internal Revenue Service. The vast majority of taxpayers take advantage of the standard deduction instead of itemizing, and as the deduction rises with inflation, over time it would shrink the number of people who would benefit from the $40,000 cap, Gleckman said.

Winkelman noted that the increased cap would remain the same for both single and married filers, essentially penalizing couples.

"It benefits high-income households more than it benefits middle- or low-income households," Lautz told Newsday, adding that overall, the increased cap would help a “small slice of taxpayers in the country."