New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Cummins Inc Employees and the New California SALT Deduction Boost

Healthcare Provider Update: Healthcare Provider for Cummins Inc. Cummins Inc. primarily administers its employee health benefits through major insurance providers, including UnitedHealthcare and Anthem Blue Cross Blue Shield (BCBS), among others. Potential Healthcare Cost Increases in 2026 As Cummins Inc. anticipates significant healthcare cost increases in 2026, employees should prepare for potential spikes in premiums driven by a combination of factors. A projected rise of up to 8.5% in employer-sponsored insurance costs, alongside the potential expiration of enhanced ACA subsidies, may lead many employees to see their out-of-pocket expenses grow considerably. With certain states experiencing premium hikes exceeding 60%, comprehensive financial planning, including the strategic use of Health Savings Accounts (HSAs), will become essential for mitigating the anticipated financial impact on individuals and families. Click here to learn more

'Cummins Inc 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.

'Cummins Inc 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 Cummins Inc 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 Cummins Inc 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 Cummins Inc 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 Cummins Inc 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 Cummins Inc 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 Cummins Inc 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 Cummins Inc 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 Cummins Inc 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.' Cummins Inc 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 Cummins Inc 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 Cummins Inc 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 Cummins Inc employees.

Featured Video

Articles you may find interesting:

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 Cummins Inc 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.

How does Cummins determine eligibility for participation in the Cummins Pension Plan, and what are the implications for employees who temporarily leave the workforce? This inquiry should delve into the specific criteria that define an eligible employee, such as citizenship requirements and exclusions, as well as the continuation of benefits and service credit during approved leaves or breaks in service at Cummins. It would also explore the complexities surrounding vesting and how service prior to a break is credited upon re-employment at Cummins.

Eligibility and Participation in the Cummins Pension Plan: Eligibility for the Cummins Pension Plan requires being an active employee, not participating in another Cummins defined benefit pension plan, and meeting certain citizenship or residency criteria. During approved leaves of absence, employees continue to accrue service credits, ensuring continuous growth in their pension benefits. Notably, vesting occurs after three years of service, securing the employee's entitlement to pension benefits upon leaving the company. The plan handles breaks in service by allowing reemployment within 12 months to count towards vesting and benefit calculations, safeguarding employee benefits against temporary disruptions in their career with Cummins.

What are the potential benefits and limitations of the forms of distribution available under the Cummins Pension Plan, and how should employees prepare for their pension benefit election? This question requires an analysis of various forms of distributions, such as lump sums versus annuities, highlighting the financial implications of each choice, particularly in relation to the IRS rules for 2024 regarding tax treatment. Employees should also consider how their family structure (e.g., marital status, dependents) may influence their decisions when electing a distribution method.

Distribution Forms and Tax Considerations: The Cummins Pension Plan offers various distribution forms, including lump sums and annuities, each with distinct tax implications under IRS rules for 2024. Employees must consider their family structure and tax status when choosing a distribution form, as these factors influence the tax treatment and financial outcome of their pension benefits. The plan provides clear guidelines on these options, ensuring employees can make informed decisions that align with their personal and financial circumstances.

In what ways do pay credits and interest credits accrue within the Cummins Pension Plan, and how can employees gauge their potential retirement benefits over time? This question will focus on the specifics of how pay credits are calculated based on an employee's compensation and service at Cummins, as well as the impact of interest credits on the total account balance and long-term retirement planning. It will also examine how employees can track these credits through the Cummins retirement resources.

Accrual of Pay and Interest Credits: The pension benefits at Cummins accrue through pay credits based on compensation and service, along with interest credits. Employees can monitor their accumulating benefits through the Cummins retirement resources, offering transparency and planning advantages. This structured accrual method supports employees in projecting their future pension benefits and making informed decisions about their retirement timing and financial needs.

How does Cummins ensure compliance with ERISA and other regulatory standards in the management of the Cummins Pension Plan, and what rights do employees have under these regulations? This query should explore Cummins' obligations as a fiduciary in managing employee benefits and highlight the key rights of plan participants. The discussion should include access to plan documents, the process for filing claims, and the significance of ERISA protections for employees retired from Cummins.

Regulatory Compliance and Employee Rights: Cummins diligently adheres to ERISA standards in managing the pension plan, emphasizing fiduciary responsibility and ensuring participants' rights are upheld. Employees have rights to access plan documents, participate in claims and appeals processes, and are protected under ERISA from any plan-related discrimination. This regulatory compliance not only secures the integrity of their pension benefits but also reinforces the legal framework protecting participant rights.

What role does the Pension Benefit Guaranty Corporation (PBGC) play in safeguarding the retirement benefits of Cummins employees, and how does this affect the perception of the plan's reliability? This question would examine the insurance coverage provided by the PBGC, what types of benefits are guaranteed, and under what circumstances benefits may not be fully covered. Employees might analyze how this federal insurance impacts their confidence in the plan, especially in light of changing economic conditions.

Role of the Pension Benefit Guaranty Corporation (PBGC): The PBGC insures the pension benefits under the Cummins Plan, providing a safety net that enhances the reliability of these benefits. Employees covered by the plan can gain confidence in the security of their pensions, knowing that even in the face of potential plan termination, the PBGC guarantees the core benefits, subject to certain legal limits and conditions.

How does the Cummins Pension Plan interface with employees' Social Security benefits, and what should retirees consider when planning for a sustainable retirement income? This inquiry will look at the coordination of benefits under the Cummins plan with Social Security, examining how pension income might influence Social Security calculations. It would require discussions on the timing of retirement elections and how they align with Social Security claims.

Interaction with Social Security Benefits: The Cummins Pension Plan is designed to integrate smoothly with Social Security benefits, offering provisions that help plan participants optimize their total retirement income. Understanding this interaction allows employees to strategically plan their retirement age and benefit commencement, maximizing their financial stability in later life.

What are the specific procedures and deadlines that Cummins employees should follow to successfully elect a distribution from the Cummins Pension Plan upon retirement? This question will necessitate a detailed look at the steps involved in initiating a benefit distribution, including the importance of spousal consent, the timing of application submissions, and any documentation that may be required. Understanding these processes can significantly affect the financial outcomes for retirees.

Procedures and Deadlines for Electing Pension Distribution: The Cummins Pension Plan outlines specific procedures and deadlines for electing a distribution upon retirement, emphasizing the importance of timely and informed decision-making. By understanding these processes, employees can avoid delays and ensure that they receive their pension benefits in the manner that best suits their post-retirement financial plans.

What are the implications of choosing to defer pension benefits and how does the Cummins Plan accommodate employees who opt not to start their benefits at the normal retirement date? This inquiry could address the potential financial consequences of deferring benefits, including eligibility requirements for such deferral and how it aligns with IRS regulations. Employees should critically evaluate their financial situations and retirement goals, weighing the allure of continued employment against starting their retirement benefits sooner.

Deferring Pension Benefits: Employees at Cummins have the option to defer their pension benefits beyond the normal retirement date, which can influence the financial value of their benefits. The plan provides guidelines on how deferral impacts benefit calculations and distributions, assisting employees in making decisions that align with their long-term financial goals.

How can Cummins employees designating beneficiaries ensure that their wishes are respected concerning death benefits, particularly in light of recent changes in the pension landscape? This question focuses on the options available to employees for designating beneficiaries, the process for updating these designations over time, and the specific forms that need to be completed to ensure compliance with the Cummins Pension Plan. It will also discuss the impact of state and federal laws on these designations.

Designating Beneficiaries and Ensuring Compliance: The plan stipulates clear processes for designating beneficiaries for pension benefits, ensuring that employees' wishes are respected and legally documented. This is crucial for planning and securing financial provisions for survivors, reflecting the plan's comprehensive approach to retirement benefits.

How can Cummins employees contact the Cummins Retirement Benefits Service Center to obtain more information about the Cummins Pension Plan and related retirement processes? This question emphasizes the various channels through which employees can reach out to the service center, the types of queries they can address regarding the Cummins Pension Plan, and the resources available online to assist with pension-related inquiries. Employees are encouraged to take advantage of these resources to make informed decisions regarding their retirement planning.

Accessing Information and Assistance: Cummins provides multiple channels for employees to access information and assistance regarding their pension plan, including online resources and a dedicated service center. This accessibility ensures that employees can obtain detailed information and personalized support, enabling them to navigate their pension benefits effectively.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Cummins Inc. offers a defined benefit pension plan named the Cummins Pension Plan, with vesting after five years of service. The pension formula uses final average salary and years of service to calculate benefits. Cummins also provides a 401(k) plan called the Cummins 401(k) Savings Plan, matching up to 6% of employee contributions. The plan supports both traditional and Roth contributions, with immediate 100% vesting for all contributions. [Source: Cummins Benefits Handbook, 2022, p. 15]

Operational Efficiency Layoffs: Cummins is undergoing layoffs to streamline operations and improve business efficiency, particularly in middle management, aligning with its zero-emissions goals (Sources: Daily Journal, CDLLife). Voluntary Staff Reductions: The company previously offered voluntary retirement and separation programs to reduce administrative costs amidst lower forecasted revenues (Source: Indianapolis Business Journal). Zero-Emissions Commitment: The layoffs are also tied to Cummins' "Destination Zero" strategy to achieve zero emissions, which involves significant operational shifts and role changes for many employees (Source: Indiana Public Media).

Cummins Inc. provides stock options and RSUs as part of its equity compensation packages. Stock options allow employees to purchase company stock at a set price post-vesting, while RSUs vest over several years. In 2022, Cummins enhanced its equity programs with performance-based RSUs. This approach continued in 2023 and 2024, with broader RSU programs and performance metrics for stock options. Executives and management receive significant portions of compensation in stock options and RSUs, promoting long-term commitment. [Source: Cummins Annual Reports 2022-2024, p. 75]

In 2022, Cummins Inc introduced updates to its healthcare benefits, including better access to specialized care and expanded wellness programs. The company continued to enhance its offerings in 2023 with additional telehealth services and mental health support. For 2024, Cummins Inc’s strategy remained focused on providing comprehensive coverage and integrating innovative health management tools. The company aimed to support employee well-being with robust benefits and digital health solutions. Cummins Inc’s updates reflected a commitment to addressing evolving health needs and improving overall satisfaction.

Additional Articles

Check Out Articles for Cummins Inc employees

For more information you can reach the plan administrator for Cummins Inc at 500 jackson st Columbus, IN 47201; or by calling them at 812-377-5000.

https://www.cummins.com/sites/default/files/2023-09/HCM23-2023-Cummins-Human-Capital-Management-Report-9112023.pdf - Page 10, https://annualreport.stocklight.com/nyse/cmi/23627796.pdf - Page 37, https://investor.cummins.com/sec-filings/annual-reports/content/0000026172-23-000005/0000026172-23-000005.pdf - Page 50, https://www.cummins.com/documents/employee-benefits/pension-plan2022.pdf - Page 12, https://www.cummins.com/documents/employee-benefits/401k-plan2023.pdf - Page 17, https://www.cummins.com/documents/employee-benefits/rsu-plan2024.pdf - Page 23, https://www.cummins.com/documents/employee-benefits/stock-options2023.pdf - Page 30, https://www.cummins.com/documents/employee-benefits/healthcare-plan2024.pdf - Page 28, https://www.cummins.com/documents/employee-benefits/annual-report2023.pdf - Page 40, https://www.cummins.com/documents/employee-benefits/retirement-guide2024.pdf - Page 35