Thanks for the explanation of how the limitation is applied and where to find the applicable worksheet. I do think there is a problem with this interpretation in cases where no benefit was derived from state income taxes in 2024 which capped SALT at $10,000 and the taxpayer had other taxes (real estate, sales etc.) that exceeded the SALT limit. As a cash basis taxpayer, I get to deduct the estimated payment in the year paid regardless if inflated or not because any tax benefit that is refunded is included in income in the year received. I revised IRS Pub 525 - Worksheet 2 (specifically Recoveries of Itemized Deductions) which makes no reference to allocation of estimated tax payments.
