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Sonoco Products Employees and the New California SALT Deduction Boost

Healthcare Provider Update: Healthcare Provider for Sonoco Products Sonoco Products, a global packaging solutions company, collaborates with various healthcare providers to manage the health benefits of its employees. While specific providers may vary by location and plan selections, many large employers like Sonoco typically partner with prominent insurance carriers such as UnitedHealthcare, Anthem, and Cigna. Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs for employees of Sonoco Products may experience significant increases due to anticipated premium hikes related to the Affordable Care Act (ACA). With projections indicating that premiums could rise by as much as 18% to 66% in certain states, many employees may face sharp out-of-pocket costs, particularly if enhanced federal subsidies expire. These increases will be driven by soaring medical costs and insurers' need to adjust for both economic inflation and the potential loss of critical financial support, raising concerns about accessibility and affordability for many subscribers. Click here to learn more

'Sonoco Products employees navigating California’s high property taxes should view the new SALT deduction cap as an opportunity to revisit whether itemizing or taking the standard deduction provides the most benefit, and making that comparison now can help them plan ahead with greater clarity.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Sonoco Products employees and retirees should recognize that the higher SALT deduction cap creates a chance to reevaluate household tax strategies, but the true value will depend on income thresholds, property taxes, and whether itemized deductions outweigh the standard deduction.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How the 2025 spending bill changes the SALT deduction cap for California homeowners.
The impact of Proposition 13, income thresholds, and itemized deductions on potential savings.
What Sonoco Products employees and retirees should consider when comparing itemized deductions versus the standard deduction.

With the passage of the 2025 One Big Beautiful Bill Act, the cap on state and local tax (SALT) deductions increased, positioning millions of taxpayers nationwide to see relief on their federal tax returns. With some of the largest state and local tax burdens in the nation, California homeowners—including many Sonoco Products employees—will be especially affected by the shift. Still, it's unclear how much Californians could save.

Before 2017, the entire amount of state and local taxes paid could be subtracted from a taxpayer's federal taxable income. With the 2017 Tax Cuts and Jobs Act, which set a $10,000 deduction cap, this was altered. ¹ Residents in high-tax areas like California, where taxes and property values often exceed national norms, were disproportionately impacted by the cap, creating challenges for Sonoco Products families with significant home values.

Potential Savings

Although the ceiling is not completely removed by the new 2025 legislation, it is replaced with an income-based cap that permits deductions of up to $40,000, contingent on a taxpayer's earnings. ² The change may give many homeowners a meaningful advantage, but the benefits may differ depending on income, house value, and mortgage balance, according to Kevin Won of Wealth Enhancement's California office, which frequently works with Sonoco Products employees.

The deduction power that Californians in high-tax districts lost in 2017 could now be partially restored, according to Won. 'But under the new income thresholds, people with higher incomes might still see their SALT benefit phased out.' This is particularly relevant for Sonoco Products retirees and mid-career employees navigating compensation and property costs in high-value regions.

Redfin data shows the possible savings. Instead of the $10,000 cap, the average California homeowner can now deduct about $26,000 in SALT payments. ³ This could result in a $4,000 decrease in federal taxes at a marginal tax rate of 24%. ³ However, not every taxpayer—including those in the Sonoco Products workforce—will qualify for the entire benefit.

Unequal Application

A significant factor in the outcome is California's distinct property tax structure, which was influenced by Proposition 13. Long-term homeowners frequently pay lower property taxes than new buyers because Proposition 13 restricts annual increases in property tax assessments. According to Won, 'many Californians will not see the same percentage savings as newer buyers or residents of other states because Proposition 13 keeps long-term homeowners’ property taxes artificially low,' an important distinction for Sonoco Products employees with decades of homeownership.

The extended deduction may help around three-quarters of California homeowners, according to research. ³ But the only people who are likely to see major tax reductions are those who have large itemized deductions that surpass the standard deduction threshold. For many Sonoco Products professionals, the standard deduction might still be the better choice depending on their household situation.

Won suggested, 'It's still wise to run the numbers. To find out which approach works best, compare your new itemized deductions to the standard deduction.' Sonoco Products families approaching retirement may want to evaluate both options carefully.

Understanding the Nuances

In the end, the increased SALT cap gives Californians more flexibility, but the effects will differ greatly. 'It's a positive change, especially for upper-middle-income homeowners,' Won summed up. However, the impact may be minimal for long-term property owners or retirees with lower property taxes and smaller mortgages, a scenario that may apply to Sonoco Products retirees who have owned property for decades.

There is one important change: taxpayers 65 and older may claim an extra $6,000 tax deduction for tax years 2025–2028, regardless of whether they itemize. ⁴ Phase-outs begin at $75,000 of income for single filers and $150,000 for joint filers. ⁴ Together with the increased SALT cap modification, this senior deduction may expand older homeowners' tax relief—something Sonoco Products retirees should pay particular attention to.

Find out how California homeowners will be affected by the 2025 increase in the state and local tax (SALT) deduction cap. Typical property owners might save almost $4,000 in federal taxes under the new law, which increases the threshold from $10,000 to an income-based ceiling of up to $40,000. Discover why newer owners in high-tax districts may benefit the most, as well as how eligibility is influenced by Proposition 13, mortgage amounts, and itemized versus standard deductions, which are key considerations for many Sonoco Products employees.

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California's recent SALT deduction extension is comparable to reopening a long-blocked road lane. The 2017 limits forced traffic into fewer lanes for years, which reduced mobility and caused congestion. A portion of that lost lane has been reopened by the 2025 amendments, which permit deductions of up to $40,000, potentially reducing thousands of dollars in federal taxes. Similar to the freeway's continued speed limitations and restrictions, Proposition 13, income requirements, and itemized deduction laws limit the amount of benefit that homeowners may actually receive, making it easier for some but not for others—including many in the Sonoco Products workforce.

Sources:

1. Congress.gov. ' The SALT Cap: Overview and Analysis .' 3 Apr. 2025.

2. Bipartisan Policy Center. “ SALT Deduction Changes in the One Big Beautiful Bill Act ,” by Fredrick Hernandez, 30 July 2025.

3. Redfin News. “ Homeowners in New York, California and Other Coastal States Could Shave Thousands Off Their Annual Tax Bill with SALT Cap Increase ,' by Mark Worley, Asad Khan. 18 Sept. 2025.

4. IRS. ' One, Big, Beautiful Bill provisions: Deduction for Seniors (Sec. 70103) '. 2025.

In the context of the retirement benefits provided by Sonoco Products Company, what are the different scenarios that could lead an employee to choose either the Normal Retirement Benefit or the Early Retirement Benefit, and what factors should be considered in making this decision? Additionally, how do these benefits interact with the vesting service and benefit service calculations specified by Sonoco Products Company?

Normal Retirement Benefit: Available at age 65, provides full monthly pension calculated by a predetermined formula. Early Retirement Benefit: Available from age 55 with 15 years of service, but monthly payments are reduced to account for the longer payment period. Employees must weigh the reduction in monthly benefits against the potential need or desire to retire early. Considerations: The choice largely depends on personal financial needs, health status, and employment circumstances. Early retirement reduces monthly benefits, which could impact long-term financial stability.

Considering the details about tax implications in the Sonoco Pension Plan, what steps should employees take to ensure they understand the taxation of both monthly annuity payments and lump sum payments when they retire from Sonoco Products Company? What resources does Sonoco offer to assist employees in navigating these tax obligations effectively?

Monthly Annuity Payments: Subject to federal income tax; state and local taxes may also apply. Employees can choose whether or not to have taxes withheld. Lump Sum Payments: Subject to mandatory 20% federal withholding if not rolled over into another qualified plan. Employees must consult with tax professionals to understand the taxation and potential penalties, especially if under age 59½. Resources: Sonoco provides access to benefits specialists through their Benefits Center and recommends consultation with tax advisors to manage tax obligations effectively.

How does Sonoco Products Company define and calculate the "Maximum Plan Benefit," and what impact do IRS limits have on the benefits that employees may receive upon retirement? Furthermore, how does this ensure that employees understand their entitlements under the plan?

Defined by IRS limits, which cap the annual benefits an employee can receive. For 2018, the limit was $220,000. Impact: Ensures high earners are aware of the maximum pension they can draw annually, and helps in planning additional retirement savings if necessary.

For employees at Sonoco Products Company who may be considering reemployment after retirement, what are the potential impacts on their pension benefits, and what guidelines does the company provide regarding how these benefits are recalculated upon re-entering the workforce?

Pension benefits cease during reemployment and resume upon re-retirement, recalculated based on additional service. This could affect decisions on returning to work post-retirement. Guidelines: Sonoco outlines how benefits are recalculated and emphasizes consulting with the Benefits Center to understand the specific impacts.

In what ways can employees of Sonoco Products Company calculate their required service years to determine pension eligibility, and what nuances exist in the vesting and benefit service calculations? How do these calculations affect the retirement planning process for long-term employees?

Vesting Service: Determines eligibility for a pension. A minimum of five years is required for a vested pension benefit. Benefit Service: Used to calculate the amount of pension. It includes periods of employment but may exclude certain leaves or breaks in service. Implications: Understanding these definitions helps employees plan their career and retirement timing to maximize benefits.

Employees at Sonoco Products Company are often curious about the various forms of payment they can choose for their pension. What are the available options, and how do these options differ in terms of financial implications for the retiree and their beneficiaries?

Options: Single life annuity, joint and survivor annuities (50%, 75%, 100% survivor benefits). Financial Implications: Each option impacts the monthly benefit amount and the security it provides to beneficiaries, necessitating careful consideration based on marital status and financial needs.

Understanding the process of applying for plan benefits can be complex for many employees. What are the specific steps that Sonoco Products Company employees need to follow to apply for their pension benefits, and what resources are available to help streamline this process?

Process: Initiated via Sonoco Benefits Center, involving choosing a retirement date, understanding benefit options, and completing necessary paperwork. Resources: Detailed support through retirement specialists aids in navigating the process smoothly.

Many employees may not be aware of their rights under ERISA as participants in the Sonoco Pension Plan. What specific rights and protections do employees have, and how can they assert these rights if there are disputes or issues regarding their pension benefits at Sonoco Products Company?

Provides specific rights regarding plan information, appeal processes for denied claims, and protections against plan abuses. Asserting Rights: Outlines steps to take if there are disputes over pension benefits, including the right to sue after exhausting administrative remedies.

If a Sonoco Products Company employee experiences a significant life change, such as divorce or a domestic relations order, what procedures must they follow regarding their pension benefits, and how does Sonoco manage such situations under the guidelines laid out in the plan documentation?

Procedures: Employees must follow specific procedures for dividing pension benefits in the event of divorce, under a Qualified Domestic Relations Order (QDRO). Management: Sonoco’s Benefits Center provides guidance and necessary documentation to ensure compliance with legal requirements.

For employees looking to learn more about their retirement options and benefits at Sonoco Products Company, what contact information is available for them to reach out for assistance? How can employees utilize these resources effectively to gain a clearer understanding of their retirement planning?

Available through the Sonoco Benefits Center, offering comprehensive support for retirement planning and benefit queries, essential for effective retirement planning.