The 2026 limit
IRS Publication 505 for 2026 states the overall limit on the deduction for state and local income, sales and property taxes: $40,400, or $20,200 if married filing separately. The limit is reduced if your modified adjusted gross income (MAGI) is more than $505,000 ($252,500 married filing separately), but not below $10,000 ($5,000). The reduction, per the Schedule A worksheet, is 30 percent of the MAGI above the threshold.
| Modified AGI, 2026 | Excess over $505,000 | Reduction (30%) | SALT cap |
|---|---|---|---|
| $400,000 | $0 | $0 | $40,400 |
| $505,000 | $0 | $0 | $40,400 |
| $530,000 | $25,000 | $7,500 | $32,900 |
| $560,000 | $55,000 | $16,500 | $23,900 |
| $600,000 | $95,000 | $28,500 | $11,900 |
| $650,000 | $145,000 | $30,400 | $10,000 |
The phase-down is steep: every extra dollar of income between $505,000 and $606,333 removes 30 cents of deduction, which for a filer with enough state tax to use the whole cap is an effective surcharge on top of the bracket rate in that range. Below the threshold the cap is simply $40,400, and anyone whose state and local taxes are under it deducts them in full.
The schedule to 2030
The Congressional Research Service summary of the 2025 law describes the path: $40,000 for 2025, rising 1 percent a year through 2029, then back to $10,000 ($5,000 married filing separately) from 2030. The income threshold starts at $500,000 and rises 1 percent a year on the same schedule. The table applies that description; the IRS publishes each year's exact figure, and the 2026 figures match Publication 505.
| Tax year | Cap (joint, single, head of household) | Phase-down begins at MAGI |
|---|---|---|
| 2025 | $40,000 | $500,000 |
| 2026 | $40,400 | $505,000 |
| 2027 | $40,804 | $510,050 |
| 2028 | $41,212 | $515,151 |
| 2029 | $41,624 | $520,302 |
| 2030 onward | $10,000 | no phase-down |
Which taxes count
| Deductible (Topic 503) | Not deductible |
|---|---|
| State and local income taxes: withholding, estimated payments, prior-year balances paid this year | Federal income taxes |
| Or, by election on Schedule A box 5a, state and local general sales taxes instead of income taxes | Transfer taxes, such as taxes on the sale of property |
| State and local real property taxes levied for the general public welfare | Homeowners association fees |
| Personal property taxes based only on the value of property, such as a car or boat | Taxes for local benefits that increase the value of your property, apart from maintenance, repair or interest charges |
The income-or-sales-tax election matters in the states without an income tax, where the sales tax is the only one available, and the IRS provides a sales tax deduction calculator for the figure. Property tax on a home is usually the largest single item; the mortgage calculator carries it as the T in the PITI payment, and the paycheck calculator shows the state income tax withheld from a salary in each state.
One household, two caps
A married couple with $14,000 of state income tax withheld, $9,000 of property tax, $1,200 of value-based vehicle tax and $20,000 of mortgage interest, filing jointly for 2026:
| Item | 2026 cap ($40,400) | Old cap ($10,000) |
|---|---|---|
| State and local taxes paid | $24,200 | $24,200 |
| SALT deduction allowed | $24,200 | $10,000 |
| Mortgage interest | $20,000 | $20,000 |
| Itemized deductions | $44,200 | $30,000 |
| Standard deduction, joint | $32,200 | $32,200 |
| Better choice | itemize, $12,000 more | standard deduction |
| Federal tax saved by itemizing at 22% | $2,640 | $0 |
The higher cap turns a standard-deduction household into an itemizing one, and that, rather than the cap itself, is where the saving comes from. The guides standard deduction 2026 and mortgage interest deduction cover the other half of the comparison. A single filer with the same taxes but a $16,100 standard deduction was itemizing already and gains the full $14,200 by which the taxes paid exceed the old cap.
This guide reports the 2026 figures in IRS Publication 505, the worksheet in the Schedule A instructions and the schedule described by the Congressional Research Service. The final 2026 Schedule A instructions govern the return.
Frequently asked questions
What is the SALT deduction limit for 2026?
IRS Publication 505 for 2026 puts the overall limit on the itemized deduction for state and local income, sales and property taxes at $40,400, or $20,200 if married filing separately. The limit is reduced if modified adjusted gross income is more than $505,000 ($252,500 married filing separately), but not below $10,000 ($5,000). For 2025 the figures were $40,000 and $500,000.
How does the SALT phase-down work?
The Schedule A worksheet reduces the cap by 30 percent of the amount by which modified adjusted gross income exceeds the threshold, and stops at the $10,000 floor. For 2026 that means a filer with $560,000 of MAGI has a cap of $40,400 minus 30 percent of $55,000, which is $23,900, and anyone at $606,334 of MAGI or more is back at the old $10,000 cap. The 30 percent rate comes from the 2025 worksheet and the CRS description of the law; the thresholds for 2026 are in Publication 505.
Which taxes count toward the SALT deduction?
IRS Topic 503 lists state and local income taxes, or general sales taxes if you elect them instead by checking box 5a on Schedule A; state and local real property taxes levied for the general public welfare; and personal property taxes based only on the value of property such as a car or boat. Federal income taxes, transfer taxes on the sale of property, homeowners association fees and taxes for local benefits that improve your property are not deductible.
Is the higher SALT cap permanent?
No. The Congressional Research Service summary of the 2025 law says the $40,000 limit for 2025 rises by 1 percent a year through 2029, so $40,400 for 2026, and reverts to $10,000 ($5,000 married filing separately) in 2030 and later years; the income threshold rises by 1 percent a year on the same schedule.
Does the SALT cap matter if I take the standard deduction?
No. The deduction only exists on Schedule A, so it matters only if your itemized deductions together exceed the 2026 standard deduction of $32,200 married filing jointly or $16,100 single. The higher cap pushes more homeowners in high-tax states over that line: a couple with $24,200 of state and local taxes and $20,000 of mortgage interest itemizes $44,200 under the 2026 cap but would have had only $30,000, less than the standard deduction, under the old $10,000 cap.
Sources
- IRS Publication 505 (2026), Tax Withholding and Estimated Tax (for 2026 the state and local tax limit is $40,400, $20,200 married filing separately, reduced if modified adjusted gross income exceeds $505,000, $252,500, but not below $10,000, $5,000)
- IRS 2025 Instructions for Schedule A (Form 1040) (the line 5e worksheet: the limit reduced by 30 percent of modified adjusted gross income over the threshold, not below $10,000; the 2025 figures of $40,000 and $500,000)
- IRS Topic no. 503, Deductible taxes (state and local income or general sales taxes, the box 5a election, real property taxes, personal property taxes; federal taxes, transfer taxes, homeowners association fees and taxes for local benefits not deductible)
- Congressional Research Service, Tax Provisions in P.L. 119-21, the FY2025 Reconciliation Law (the $40,000 limit for 2025 rising 1 percent a year through 2029 and reverting to $10,000 in 2030; the reduction by 30 percent of MAGI over a threshold that also rises 1 percent a year)
- IRS Rev. Proc. 2025-32, section 4.14 (the 2026 standard deduction)