Preparing for Tax Changes: What the SALT Deduction Could Mean for Phillips 66 Employees

Healthcare Provider Update: Healthcare Provider for Phillips 66 Phillips 66 offers healthcare coverage through multiple providers, primarily Aetna and Blue Cross Blue Shield (BCBS), depending on the employee's home ZIP code. Employees also have access to a Kaiser HMO option if they live in designated areas of California or Washington. The medical plans include comprehensive coverage for various healthcare services, including preventive care, regular checkups, mental health, and substance use disorder treatments. Potential Healthcare Cost Increases in 2026 Healthcare costs for Phillips 66 employees can be expected to rise significantly in 2026, reflecting broader trends impacting the Affordable Care Act (ACA) marketplace. As major insurers are filing for rate increases that may exceed 60% in certain states, Phillips 66 employees could face steep hikes in out-of-pocket premiums, especially if federal subsidies are not extended. The combination of escalating medical costs and the potential loss of enhanced subsidies means many employees may see their premium costs increase substantially, leaving them with difficult choices regarding their healthcare coverage amidst these changing economic conditions. Click here to learn more

“Recent changes to the SALT deduction are prompting many Phillips 66 employees to revisit long-standing assumptions about itemizing, refunds, and cash flow in retirement, making it important to periodically reassess how evolving tax rules may influence overall planning decisions,” – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

“Expanded SALT deduction limits are creating renewed planning considerations for Phillips 66 employees approaching retirement, particularly those in higher tax states who may benefit from reexamining itemized deductions as part of a broader, multi-year tax strategy,” – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

1. How recent changes to the state and local tax (SALT) deduction may influence tax outcomes for retirees, particularly those in higher tax states.

2. Why itemizing deductions may once again be relevant for certain Phillips 66 employees approaching or entering retirement.

3. How the enhanced SALT deduction can create planning opportunities that affect refunds, cash flow, and long-term tax results.

By Neva Bradley, CFP®, Wealth Enhancement

For many retirees—especially those living in high tax states—recent changes to the state and local tax (SALT) deduction may exert a quiet impact on tax results. One provision—the enhanced SALT deduction—may lead to larger refunds or smaller tax bills than expected, which could work to the benefit of Phillips 66 employees nearing retirement.

In 2025, the annual limit on the SALT deduction rose from $10,000 to $40,000 per household (and will increase slightly through 2029). ¹  This change may allow eligible taxpayers who choose to itemize to claim up to $40,000 in qualifying state and local tax payments, subject to income-based phase-out rules.

This adjustment does not apply to everyone, but for the right retiree profile, it can have a meaningful impact—especially for individuals transitioning out of long corporate careers and reassessing their taxes.

What Is Included in the SALT Deduction

Under current tax law, taxpayers who itemize can deduct the following, up to the annual limit:

• - Property tax payments

• - Either state and local income taxes  or  state and local sales taxes (not both) ²

In recent years, this deduction has been capped at a relatively low level, which limited its usefulness for retirees in states with higher income or property taxes.

Why the Higher SALT Limit Matters

The higher SALT limit increases the amount of state and local taxes that may be deducted for qualifying filers. For Phillips 66 retirees who:

• - Own higher-value homes

• - Live in states with elevated income tax rates

• - Have finished paying off their mortgages but still face substantial property tax bills

this modification may reduce taxable income in ways that can affect your overall tax results.

In practice, that reduction may:

• - Lower overall federal tax liability

• - Result in larger refunds for those whose payments exceeded what was owed

• - Improve periodic cash flow throughout retirement

Itemizing Is the Key

To receive the benefit of the SALT deduction, retirees must choose to itemize deductions rather than claim the standard deduction. While many taxpayers default to the standard deduction, the higher SALT limit means that itemizing may once again be preferable for certain households, including some Phillips 66 employees with complex tax situations.

This is especially true when SALT deductions are combined with:

• - Charitable contributions

• - Significant medical expenses

• - Other allowable itemized deductions

When these deductions are combined thoughtfully, itemizing may exceed the standard deduction and provide a more favorable result.

Who Is Most Likely to See Value from This Change

Based on broader trends, taxpayers most likely to benefit share several characteristics:

• - Residence in higher-tax states

• - Meaningful exposure to property tax burdens

• - Household income below the phase-out levels for the enhanced SALT limit

• - A willingness to revisit deductions each year instead of relying on prior returns

Why Refunds Are Appearing Now

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Many retirees made estimated tax payments or had withholdings based on prior-year tax scenarios. When allowable deductions increase or eligibility shifts, those prior payments may exceed what is ultimately owed, leading to larger refunds during tax filing. This helps explain why some Phillips 66 retirees saw unexpected upsides during the most recent tax season.

Extended Planning Opportunities

Beyond the current tax year, the expanded SALT deduction also offers longer-term planning possibilities. SALT considerations can be coordinated with:

• - Timing of capital gains

• - Roth conversion timing

• - Charitable giving strategies

When these elements are synchronized effectively, they may improve tax results across multiple years for Phillips 66 retirees.

The Bottom Line

For retirees living in higher-tax areas, the expanded SALT deduction limit may be one of the more notable tax changes in recent years. It has the potential to reduce taxes due, increase refunds, and restore the value of itemized deductions that many assumed were no longer beneficial under prior law.

That said, the benefit depends on detailed analysis—not assumptions.

The Retirement Group Can Help

If you are retired or nearing retirement and live in a state with higher income or property taxes, this could be a good time to revisit whether itemizing and the expanded SALT deduction align with your overall tax plan. The Retirement Group can help review how this change fits into your broader tax and retirement considerations. To learn more, call (800) 900-5867.

Sources:

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

 2. Congressional Research Service.  Tax Provisions in P.L. 119-21, the FY2025 Reconciliation Law.  29 July 2025, CRS Report R48611, crsreports.congress.gov/product/pdf/R/R48611.