CalcWedge

Home / tax / SALT Deduction (2026)

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.

Sources