New IRS rule on deductions hits some high-tax states hard

New rules unveiled by the IRS undermine some states' attempts to help residents keep a version of a popular federal income tax deduction. Last year's Republican tax overhaul put a $10,000 cap on deductions for state and local income taxes, which could affect some high-earners in high-tax states. A handful of high-tax states sued the administration earlier this summer over the Republican tax law, which they say was in part politically motivated to attack Democratic-leaning states.

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