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SALT Deduction (2026)

See your 2026 state and local tax deduction cap — and whether itemizing beats the standard deduction.

How the SALT deduction cap works

If you itemize, you can deduct the state and local taxes you paid — income or sales tax, plus property tax — up to a cap. For 2026 that cap is $40,400 (or $20,200 if you’re married filing separately), but it shrinks if your income is high enough, down to a $10,000 floor ($5,000 MFS). Because this is an itemized deduction, it only helps if your total itemized deductions beat the standard deduction.

The formula

baseCap   = $40,400 (single/joint) or $20,200 (MFS)
threshold = $505,000 (single/joint) or $252,500 (MFS)
floor     = $10,000 (single/joint) or $5,000 (MFS)

excess    = max(0, MAGI − threshold)
reduction = 30% × excess
cap       = max(floor, baseCap − reduction)

saltDeduction = min(saltPaid + propertyTaxPaid, cap)
itemizedTotal = saltDeduction + otherItemizedDeductions

Worked example

A married couple filing jointly paid $50,000 in combined SALT and property tax, with a MAGI of $550,000.

  • Excess MAGI: $550,000 − $505,000 = $45,000.
  • Reduction: 30% × $45,000 = $13,500.
  • Cap: $40,400 − $13,500 = $26,900.
  • SALT deduction: min($50,000, $26,900) = $26,900.

Frequently asked questions (FAQ)

What counts as SALT?

State and local income tax (or sales tax, whichever you choose — not both) plus property tax. You add these together and compare the total against the SALT cap.

Should I itemize now that the cap is higher?

Maybe — the higher 2026 cap ($40,400 vs. the old $10,000) makes itemizing worthwhile for more filers, especially homeowners in high-tax states. Compare your itemized total against the standard deduction, as this calculator does.

Why does my cap shrink above $505,000 MAGI?

The increased SALT cap phases down for higher earners — it's reduced by 30% of your MAGI over $505,000 (or $252,500 if married filing separately), down to a $10,000 floor ($5,000 MFS).

What happens in 2030?

The higher cap and phase-down schedule run through 2029. Unless extended, the SALT cap reverts to a flat $10,000 for everyone starting in 2030.

Income tax or sales tax — which do I deduct?

Whichever is larger for you, not both. Most filers in states with an income tax choose to deduct income tax; filers in no-income-tax states typically deduct sales tax instead.

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