Deductions · calculator
The SALT deduction cap for 2026 and 2025
How much of your state income, sales and property taxes you can itemize, and how income shrinks the cap.
Your SALT deduction under the new cap
2026 SALT deduction
$28,000
Itemizing ($40,000) beats the standard deduction by $7,800
- Your cap at this income$40,400
- Full cap before the phase-down$40,400
- Taxes paid above your cap$0
- Cap reaches its floor at a MAGI of$606,333
The cap drops by 30% of MAGI above the threshold but never below $10,000 ($5,000 married filing separately). It returns to $10,000 in 2030 under the statute.
For 2026 the deduction for state and local taxes, the SALT deduction, is capped at $40,400 per return ($20,200 married filing separately), up from $40,000 for 2025, under section 70120 of Public Law 119-21. The cap covers state and local income taxes or general sales taxes, plus real estate and personal property taxes, and it only helps if you itemize on Schedule A. Above $505,000 of modified AGI in 2026 ($500,000 in 2025) the cap drops by 30% of the excess, but never below $10,000: a couple in New Jersey with $560,000 of modified AGI and $48,000 of state and property taxes can deduct $23,900 instead of $40,400. The cap reaches its floor at $606,333 of modified AGI. The statute raises the cap and the threshold by 1% a year through 2029 and returns the cap to $10,000 in 2030. The 2026 Form 1040-ES still repeats the 2025 figures in its reminders; this site follows the statute.
Checked by Radif Partners · Editorial policy · How we calculate
The worksheet behind line 5e of Schedule A
The Schedule A instructions turn the law into a ten-line worksheet. If your state and local taxes are $10,000 or less, you deduct them all. Otherwise line 1 is the cap, lines 2 to 4 rebuild modified AGI (AGI plus excluded foreign and Puerto Rico income), line 5 is the threshold, line 7 takes 30% of the excess, line 9 keeps the larger of the reduced cap and $10,000, and line 10 keeps the smaller of that and the taxes you paid. Married filing separately halves the result. The calculator applies the same lines with the 2026 amounts from the statute.
| Modified AGI | 2025 cap | 2026 cap |
|---|---|---|
| $400,000 | $40,000 | $40,400 |
| $505,000 | $38,500 | $40,400 |
| $550,000 | $25,000 | $26,900 |
| $600,000 | $10,000 | $11,900 |
| $650,000 | $10,000 | $10,000 |
| $700,000 | $10,000 | $10,000 |
A 30% band that acts like a higher tax rate
Between the threshold and the floor, each extra dollar of income removes 30 cents of deduction. A taxpayer in the 35% bracket inside that band pays 35% on the dollar plus 35% of the 30 cents lost, about 45.5% at the margin, as long as the full taxes paid exceed the reduced cap. Below the threshold, or above $606,333, the effect disappears. Pass-through owners in many states can still route state tax through the business, which this calculator does not model.
Itemize or not
The cap only matters for people who itemize. Add mortgage interest, charitable gifts above the 2026 floor and medical costs above 7.5% of AGI, then compare with the standard deduction; the itemize-or-not calculator does it with the 2026 limit for the 37% bracket.
Sources: section 70120 of Public Law 119-21; IRS Instructions for Schedule A 2025: State and Local Tax Deduction Worksheet; IRS Schedule A (Form 1040) 2025, Itemized Deductions, line 5e, read on October 11, 2026.