H.R. 7561: Local Infrastructure Tax Cuts Act

Introduced Feb 12, 20263 cosponsors

Sponsor

Haley Stevens

Democrat · MI-11

Keep SALT relief, cut it off for higher earners

3 min readLast updated July 29, 2026

Why it matters

$10,000 stays on the table for many taxpayers, but your SALT deduction drops to $0 once income passes $215,000 for couples, $161,250 for heads of household, or $107,500 for other filers. H.R. 7561 also lets some homeowners deduct special assessment taxes for projects like roads, sewers, and utilities tied to their primary home.

H.R. 7561 keeps the SALT deduction for many households but wipes it out entirely for taxpayers above its income thresholds.

For most filers under those thresholds, the current cap stays the same: up to $10,000 in state and local taxes, or $5,000 if you're married filing separately. But once your income crosses the bill's line, the deduction is no longer reduced — it goes straight to zero.

The income cutoffs are $215,000 for married couples filing jointly, $161,250 for heads of household, and $107,500 for other taxpayers. Starting after 2027, those dollar amounts would rise with inflation.

The bill also creates a new deduction for some special assessment taxes charged to fund local infrastructure that directly benefits your property. Think neighborhood sewer work, stormwater systems, utility upgrades, transportation projects, schools, hospitals, or emergency facilities.

That new deduction is narrower than it sounds. It would apply only to taxes tied to a special assessment district, only when the project directly benefits the property, and only for your principal residence.

So this is not a full SALT cap repeal — it's a targeted rewrite that preserves a federal deduction for some taxpayers while shutting higher earners out completely. Both major changes would apply to tax years beginning after December 31, 2026.

Bill Progress

IntroducedFeb 12

Committee

Pass House

Pass Senate

Signed

Law

Latest Action · Feb 12, 2026

1/2

Referred to the House Committee on Ways and Means.

H.R. 7561 Bill Summary

What H.R. 7561 actually does.

SALT deductions end above set income levels

If your modified adjusted gross income is above the bill's threshold, your SALT deduction becomes $0. The cutoff is $215,000 for joint filers, $161,250 for heads of household, and $107,500 for other filers.

Most other filers keep the current SALT cap

If you're under the income threshold, you can still deduct up to $10,000 in state and local taxes. Married people filing separately stay capped at $5,000.

Some neighborhood infrastructure assessments become deductible

The bill creates a federal deduction for qualified special assessment taxes used to fund projects that directly benefit the property, including transportation, schools, hospitals, utilities, and dam restoration.

The new infrastructure deduction is limited to your main home

You could claim the new deduction only for special assessment taxes paid on your principal residence, not on second homes or investment property.

Dollar thresholds rise with inflation after 2027

The bill says its deduction caps and income thresholds would be adjusted for inflation in tax years beginning after 2027.

Who benefits from H.R. 7561?

Homeowners under the bill's income cutoffs

If your income falls below the threshold for your filing status, you keep access to up to $10,000 in SALT deductions, or $5,000 if you're married filing separately.

People paying special assessment taxes on their primary home

If your neighborhood is billed for local projects like sewer lines, stormwater systems, roads, or utility work through a special assessment district, H.R. 7561 could open a new federal deduction.

Communities using special assessment districts for infrastructure

The bill could make locally funded improvement projects less costly for residents by letting some of those assessment taxes count on a federal return.

Who is affected by H.R. 7561?

Higher-income taxpayers above the bill's thresholds

If your income exceeds the cutoff for your filing status, your SALT deduction would be eliminated entirely rather than capped.

Owners of second homes and investment property

The new special assessment tax deduction would not apply unless the property is your principal residence.

Taxpayers outside special assessment districts

If your local taxes are not tied to a qualifying special assessment district and project, the bill's new infrastructure deduction would not apply to you.

Share this story

Tracking floor activity — no debate on H.R. 7561 yet. Updates when a legislator speaks on the record.

HR7561 Legislative Journey

1 actions

House: Committee Action

Feb 12, 2026

Referred to the House Committee on Ways and Means.

About the Sponsor

Haley Stevens

Democrat, Michigan's 11th congressional district · 7 years in Congress

Committees: Science, Space, and Technology, House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, Education and Workforce

View full profile →

Cosponsors (3)

No new cosponsors in 170 days — momentum stalled

All 3 cosponsors are Democrats. Cosponsors represent 1 state: Michigan.

3Democrats·1 state

Debbie Dingell

Democrat · MI

Hillary Scholten

Democrat · MI

Kristen McDonald Rivet

Democrat · MI

Committee Sponsors

Ways and Means Committee

19D26R

|0 signed45 not yet

0 of 45 committee members cosponsored

No committee members have cosponsored this bill

19 Democrats across this committee haven't cosponsored yet. Mobilize their constituents

What laws does H.R. 7561 change?

1 changes

Full Text

Sections Amended

Section 164(a) of Internal Revenue Code of 1986

inserting after paragraph (4) the following new paragraph: ``(5) Qualified special assessment taxes

H.R. 7561 Quick Facts

Cosponsors

Committee: Ways and Means
Chamber: House
Policy: Taxation
Introduced: Feb 12, 2026

Referred to the House Committee on Ways and Means.

Feb 12, 2026

Constituent Resources

Find your legislators on H.R. 7561

Get notified when this bill moves

Take Action

Mobilize constituents on H.R. 7561

See how Legisletter works

H.R. 7561 Common Questions

Does H.R. 7561 repeal the SALT cap?

No. H.R. 7561 keeps the cap at $10,000 for most filers and $5,000 for married people filing separately. For taxpayers above its income thresholds, the deduction drops to $0.

What income would make me lose the SALT deduction entirely?

Under H.R. 7561, the deduction becomes $0 above $215,000 for joint filers, $161,250 for heads of household, and $107,500 for other taxpayers.

If I'm under the income limit, how much could I deduct?

Most filers could still deduct up to $10,000 in state and local taxes. If you're married filing separately, the cap stays at $5,000.

What are special assessment taxes in H.R. 7561?

They're local taxes charged within a special assessment district to pay for infrastructure that directly benefits the property — like roads, sewers, stormwater systems, utilities, or similar projects.

Would the new infrastructure tax deduction apply to every property I own?

No. H.R. 7561 limits the new deduction to special assessment taxes paid on your principal residence.

What kinds of local projects could qualify for the new deduction?

The bill covers projects like transportation, schools, hospitals, police and fire facilities, emergency response buildings, water and sewer systems, stormwater work, utilities, and dam restoration.

When would H.R. 7561 take effect?

Both the SALT changes and the new special assessment tax deduction would apply to tax years beginning after December 31, 2026.

Based on H.R. 7561 bill text

H.R. 7561 Bill Text

“To amend the Internal Revenue Code of 1986 to modify the limitation on individual deductions for certain state and local taxes and to allow a deduction for qualified special assessment taxes, and for other purposes.”

Source: U.S. Government Publishing Office