SALT Deduction Cap 2026
The limit on state and local tax (SALT) itemized deductions rose from $10,000 to $40,400 for 2026 — with a phase-down for very high earners.
Quick answer
For 2026 you may deduct up to $40,400 of state and local income or sales tax plus property tax, halved to $20,200 if married filing separately. The cap falls by 30% of modified AGI above $505,000 and stops at a $10,000 floor, or $5,000 separately, from about $606,334. It is an itemized deduction, so it is worth nothing unless your itemized total beats your standard deduction, and it reduces federal income tax only.
Schedule A · IRC § 164(b)(6) · OBBBA Pub. L. 119-21 · Public Law 119-21 (One Big Beautiful Bill Act) — full text · Figures verified · How these figures are calculated
Estimate your salt cap
What the phase-out actually does
A single filer who paid $40,400 or more of eligible state and local tax. Every row is produced by the same calculation the estimator above uses, at a 22% marginal rate.
| Modified AGI | SALT paid | Before phase-out | Phase-out | Deduction | Tax saved |
|---|---|---|---|---|---|
| $504,999$1 below the phase-out start — still the full amount | $40,400 | $40,400 | — | $40,400 | $8,888 |
| $505,000Exactly at the phase-out start — still the full amount | $40,400 | $40,400 | — | $40,400 | $8,888 |
| $530,333Inside the phase-out range | $40,400 | $32,800 | − $7,600 | $32,800 | $7,216 |
| $555,667Inside the phase-out range | $40,400 | $25,200 | − $15,200 | $25,200 | $5,544 |
| $581,000Inside the phase-out range | $40,400 | $17,600 | − $22,800 | $17,600 | $3,872 |
| $606,332$1 before the deduction reaches zero | $40,400 | $10,000 | − $30,400 | $10,000 | $2,200 |
| $606,334The first modified AGI at which nothing is left | $40,400 | $10,000 | − $30,400 | $10,000 | $2,200 |
| $606,335$1 past it — there is nothing further to lose | $40,400 | $10,000 | − $30,400 | $10,000 | $2,200 |
The two shaded rows at the top are the ones worth noticing: the deduction is still whole at the threshold, so reaching it costs nothing. The rows at the bottom show where it finally runs out.
What the salt cap means in plain English
The One Big Beautiful Bill Act temporarily raised the limit on the state and local tax (SALT) itemized deduction from $10,000 to $40,000 for 2025. The limit is indexed, so for tax year 2026 it is $40,400 ($20,200 for married filing separately). The higher limit applies for tax years 2025 through 2029, then is scheduled to revert to $10,000 in 2030 unless extended.
Unlike the Schedule 1-A deductions, the SALT deduction is an itemized deduction claimed on Schedule A — you only benefit if your total itemized deductions exceed the standard deduction. SALT includes state and local income (or sales) taxes plus property taxes.
For high earners the limit phases down. For 2026, once modified adjusted gross income exceeds $505,000 ($252,500 for married filing separately) the $40,400 limit is reduced by 30% of the excess income, but it never falls below the old $10,000 floor ($5,000 for married filing separately). Both the limit and the threshold are indexed each year through 2029.
Guides & tools for the salt cap
Who qualifies
- You itemize deductions on Schedule A (your itemized total beats the standard deduction).
- You paid state and local income or sales taxes plus property taxes during the year.
- Married-filing-separately taxpayers get half the limit ($20,200 for 2026).
- Your MAGI determines whether the $40,400 limit is reduced toward the $10,000 floor ($5,000 if married filing separately).
Common mistakes to avoid
- Expecting the higher cap to help even though you take the standard deduction — SALT only matters if you itemize.
- Forgetting the limit is per return, so married-filing-separately filers are limited to $20,200 each for 2026.
- Assuming the higher limit is permanent — it is scheduled to revert to $10,000 in 2030.
- Overlooking the high-income phase-down, which for 2026 reduces the limit above $505,000 MAGI ($252,500 if married filing separately).
SALT Cap FAQs
What is the SALT deduction cap for 2026?
For 2026 the SALT (state and local tax) itemized deduction is limited to $40,400 ($20,200 for married filing separately) — up from $10,000 under prior law. The higher limit applies for tax years 2025 through 2029 before reverting to $10,000 in 2030. It phases down for taxpayers with modified adjusted gross income above $505,000 ($252,500 for married filing separately). Verify current figures with IRS instructions.
Do I have to itemize to use the higher SALT cap?
Yes. SALT is an itemized deduction claimed on Schedule A, so you only benefit if your total itemized deductions — including SALT, mortgage interest, and charitable gifts — exceed your standard deduction. If you take the standard deduction, the SALT cap doesn't affect you.
How does the high-income SALT phase-down work?
For 2026, once modified adjusted gross income exceeds $505,000, the $40,400 limit is reduced by 30% of the income above that threshold, but it never drops below the $10,000 floor. For example, $605,000 MAGI is $100,000 over the threshold; 30% of $100,000 is $30,000, reducing the limit from $40,400 to $10,400. The limit reaches the $10,000 floor at about $606,334 of MAGI. Married filing separately halves the limit, the threshold, and the floor to $20,200, $252,500 and $5,000.
What taxes count toward the SALT deduction?
SALT includes state and local income taxes (or, alternatively, state and local general sales taxes) plus state and local property taxes. You add these together and deduct the total up to the cap. Federal taxes and most fees do not count.
IRS sources & verification
Last verified August 8, 2026.