SALT Deduction Calculator
See your allowed state and local tax deduction under the new $40,000 OBBBA cap — including the high-income phaseout most calculators skip — for 2025 and 2026.
Enter what you paid in state and local taxes plus your income — the calculator applies the correct cap, phaseout, and floor for your year and filing status, then compares itemizing against the standard deduction.
The SALT Deduction Cap in 2025 and 2026
✓ Figures verified against the One Big Beautiful Bill Act statute and IRS Revenue Procedure 2025-32 — last checked June 2026.
For the 2025 tax year, the state and local tax (SALT) deduction cap rose to $40,000 per return — a fourfold increase from the $10,000 limit set by the 2017 Tax Cuts and Jobs Act. For 2026, the cap increases again to $40,400, indexed by approximately 1% per year through 2029. Married taxpayers filing separately receive exactly half — $20,000 in 2025 and $20,200 in 2026.
The expanded cap is not permanent. It applies for tax years 2025 through 2029, then reverts to the original $10,000 limit in 2030 unless Congress extends it. The reversion creates a five-year planning window for taxpayers with significant state and local tax exposure to maximize their deductions under the higher cap.
How the SALT Phaseout Works
The higher cap is reduced for high-income filers. Once your modified adjusted gross income (MAGI) exceeds $500,000 in 2025 (or $505,000 in 2026), your effective SALT cap falls by 30 cents for every additional dollar of income. This reduction cannot push the cap below the $10,000 floor — so the worst case is still better than the pre-OBBBA situation for most taxpayers.
SALT Phaseout Formula
Effective Cap = MAX( $10,000 , Statutory Cap − 30% × (MAGI − Threshold) )
Allowed Deduction = MIN( Total SALT Paid , Effective Cap )SALT Cap and Phaseout Figures by Year and Filing Status
| Filing Status | 2025 Cap | 2026 Cap | Phaseout Starts (MAGI) | Floor |
|---|---|---|---|---|
| Single / HoH / MFJ | $40,000 | $40,400 | $500,000 / $505,000 | $10,000 |
| Married Filing Separately | $20,000 | $20,200 | $250,000 / $252,500 | $5,000 |
← Swipe to see all columns
What Counts as SALT?
The state and local tax (SALT) deduction covers three categories of taxes, with an important either/or rule on the first two:
- State and local income tax OR general sales tax — you must choose the larger of the two, not both. If you live in a state with no income tax (Texas, Florida, Washington, Nevada, and others), you deduct your general sales tax instead.
- Real property tax — real estate taxes on your home, land, and other real property you own in the US. Foreign real property taxes are not deductible.
- Personal property tax — value-based taxes on personal property such as vehicle registration fees calculated on assessed value. Fixed registration fees are not deductible.
Taxes paid on business or rental property are handled separately and not included in the personal SALT cap — they are deductible as business expenses on Schedule C, Schedule E, or Form 4835, reducing MAGI directly rather than being capped.
You Must Itemize to Claim SALT
The SALT deduction is claimed on Schedule A (Itemized Deductions). You can only benefit from it if your total itemized deductions exceed your standard deduction for the year. For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly. If your SALT plus mortgage interest, charitable contributions, and medical expenses don't exceed those thresholds, the standard deduction wins and the SALT cap is irrelevant to you.
The higher SALT cap pushes more taxpayers over the standard deduction threshold. Many high-cost-of-living filers who switched to the standard deduction in 2018 when the TCJA cut the cap to $10,000 will find that itemizing is again worth it under the $40,000+ cap.
The SALT Torpedo: Why $500K–$600K Income Is a Trap
The phaseout creates a particularly harsh effective marginal rate for filers between roughly $500,000 and $600,000 of MAGI (or $250,000–$300,000 for married filing separately). In this range, every additional dollar of income both increases your tax at your marginal rate and reduces your SALT deduction by 30 cents, which in turn increases your taxable income further. At a 35% marginal rate, the combined effective rate on income within the phaseout band exceeds 45%.
SALT and the Alternative Minimum Tax (AMT)
State and local taxes are not deductible under the Alternative Minimum Tax (AMT). Taxpayers who owe AMT — which affects a narrower group of high-income filers since the AMT exemptions were raised by the TCJA — receive little or no benefit from the higher SALT cap on their AMT-liable income. If you pay AMT, your effective SALT benefit depends on the interaction between your regular tax and AMT liability for the year.
Where to Go From Here
Once you know your SALT deduction, run the rest of your return with our income tax calculator. If investment gains are pushing your MAGI into the phaseout zone, model them first with our capital gains tax calculator. Check your withholding position with the USA paycheck calculator. And if you're also evaluating other itemized deductions, the charitable deduction calculator and PMI deduction calculator cover adjacent situations on Schedule A.
Frequently Asked Questions
For 2025 the cap is $40,000 per return ($20,000 if married filing separately), rising to $40,400 ($20,200 MFS) for 2026. Both figures are far above the old $10,000 Tax Cuts and Jobs Act limit. The higher cap applies for 2025 through 2029, then reverts to $10,000 in 2030 unless Congress extends it.
Once your MAGI exceeds $500,000 in 2025 (or $505,000 in 2026) — halved for married filing separately — your SALT cap is reduced by 30 cents for every dollar of income above the threshold. The cap can never be reduced below the $10,000 floor ($5,000 for MFS).
The expanded cap phases down to the $10,000 floor once MAGI reaches approximately $600,000 in 2025 (roughly $606,300 in 2026) for single, head of household, and joint filers. For married filing separately, those numbers are approximately halved.
Yes. SALT is an itemized deduction claimed on Schedule A. It only reduces your tax if your total itemized deductions — SALT plus mortgage interest, charitable contributions, and eligible medical expenses — exceed your standard deduction. For 2026, the standard deduction is $16,100 (single) or $32,200 (married filing jointly).
You can deduct either state and local income tax or general sales tax — whichever is larger, not both — plus real property tax (your home and other US real estate) and personal property tax (value-based vehicle registration, etc.). Foreign real property taxes are not deductible. Business and rental property taxes are deducted separately as business expenses.
No. The higher cap applies only for tax years 2025 through 2029, rising by roughly 1% per year, then reverts to the original $10,000 limit in 2030 unless Congress passes new legislation. This creates a defined five-year planning window.
No. State and local taxes are not deductible when calculating AMT. If you owe AMT, the effective benefit of the higher SALT cap depends on the interaction between your regular tax and AMT liability — you may receive little or no benefit from the expanded cap on your AMT-exposed income.
Yes — you can deduct your state/local income tax (or sales tax, whichever is larger) combined with your property tax, all subject to the total SALT cap. For example, $22,000 in income tax plus $13,000 in property tax equals $35,000 in SALT paid — all of which counts toward the $40,400 cap if your MAGI is below the phaseout threshold.
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