What is the SALT deduction cap in 2026?

The 2026 SALT (State and Local Tax) deduction cap is $40,400 for most filers ($20,200 for married filing separately), up from $10,000 under the old TCJA limit. This change was enacted by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, and is effective for tax years 2025 through 2029. The cap is indexed at 1% annually.

Who benefits most from the new SALT cap?

High-income homeowners in states with high income and property taxes — primarily California, New York, New Jersey, Massachusetts, and Connecticut — benefit most. If your combined state income tax, property tax, and local taxes exceed $40,400, you can now deduct the full $40,400 instead of being capped at $10,000. This is a $30,400 increase in deductible expenses, saving up to $10,940 in federal taxes at the 36% bracket.

Should I itemize or take the standard deduction in 2026?

You should itemize if your total deductible expenses — SALT (up to $40,400), mortgage interest, charitable contributions, and qualifying medical expenses — exceed the 2026 standard deduction of $16,100 (single) or $32,200 (married filing jointly). The SALT cap increase makes itemizing worthwhile for far more households than before, especially those with mortgages and high property taxes.

Can I deduct property taxes separately from state income taxes?

Both property taxes and state/local income taxes (or state/local sales taxes if higher) are combined into your total SALT deduction, which is then capped at $40,400. You cannot deduct them separately or exceed the combined cap. Enter your property taxes and state income taxes in the calculator to see your total SALT deduction.

SALT Deduction Calculator 2026 — $40,400 Cap, Itemize vs Standard

Your 2026 deductions

Filing status

State income tax paid in 2026

Use your W-2 Box 17 or CA/NY/NJ state return estimate

Property tax paid in 2026

Local income / sales tax (optional)

NYC local income tax, or state sales tax if higher than state income tax

Mortgage interest paid in 2026

Charitable contributions

MAGI (for phase-out check)

Phase-out applies above $505,000 (single) / $252,500 (MFS)

Federal marginal tax bracket

Your 2026 SALT result

2026 SALT deduction

$36,000

vs. $10,000 under old $10,000 cap+$26,000 more

Itemize — you save more than the standard deduction

Total itemized deductions

$59,000

Standard deduction

$32,200

Itemizing gives you $26,800 more in deductions

Estimated tax saving vs. old $10,000 cap

~$6,240

+$26,000 extra deduction × 24% bracket = $6,240 in federal tax savings from the new cap

SALT breakdown

State income tax	$22,000
Property tax	$14,000
Local tax	$0
Total SALT (before cap)	$36,000
2026 cap (OBBBA)	$40,400
SALT deduction allowed	$36,000

Old cap vs. new cap

Old TCJA cap (≤2024)$10,000

New OBBBA cap (2026)$36,000

Disclaimer

This tool provides estimates for educational purposes only and is not tax advice. Results use 2026 OBBBA provisions and simplified calculations. They do not account for your full tax return, AMT interactions, state-specific rules, or future legislative changes. Consult a qualified tax professional before making tax decisions.

How this is calculated

The SALT deduction calculation follows the One Big Beautiful Bill Act (OBBBA) provisions for 2026, amending IRC §164:

Total SALT = state income tax + property tax + local tax. You may use state sales tax instead of state income tax (whichever is higher), but not both.
2026 SALT cap = $40,400 for single, MFJ, and HOH; $20,200 for MFS (OBBBA §1011, amending IRC §164(b)(6)).
Phase-out: if MAGI exceeds $505,000 (single/HOH) or $252,500 (MFS), the cap is reduced by 30¢ per dollar over the threshold, down to a floor of $10,000.
SALT deduction = min(total SALT, cap after phase-out).
Total itemized = SALT deduction + mortgage interest + charitable contributions. If this exceeds the standard deduction, itemize.
Tax saving vs. old cap = (new SALT deduction − old $10,000 deduction) × your marginal rate.

Worked example: MFJ couple with $22,000 state income tax + $14,000 property tax = $36,000 total SALT. Under the old $10,000 cap, they could deduct only $10,000. Under the 2026 OBBBA $40,400 cap, they can deduct the full $36,000. Extra deduction: $26,000. At a 24% marginal rate, that saves $6,240 in federal tax.

Sources

Reviewed against 2026 figures · Last updated June 11, 2026 · Written by Zhisuan

Data sources & legal references

IRC §164(b)(6) — SALT deduction limitation ($40,400 cap for 2026)
OBBBA §1011 — Amended SALT cap and phase-out provisions
IRS Publication 17 (2026) — Your Federal Income Tax
IRS Topic 503 — Deductible Taxes
IRS Schedule A (Form 1040) — Itemized Deductions
2026 standard deductions per OBBBA: $16,100 single, $32,200 MFJ, $24,150 HoH

Tax law references are based on the One Big Beautiful Bill Act (H.R. 1, 119th Congress) and IRS publications. For questions about this content, contact the author.

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What is How to Use the SALT Deduction Calculator?

The SALT (State and Local Tax) deduction allows taxpayers who itemize to deduct state income taxes, property taxes, and local taxes from their federal taxable income. For years, this deduction was unlimited, but the Tax Cuts and Jobs Act (TCJA) of 2017 imposed a $10,000 cap that left homeowners in high-tax states paying taxes on income they could not deduct. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, dramatically raised the SALT cap from $10,000 to $40,400 for tax year 2026 — a $30,400 increase that restores meaningful deductibility for millions of households in California, New York, New Jersey, Massachusetts, Connecticut, and other high-cost states. The new cap applies to single, married filing jointly, and head of household filers, while married filing separately filers receive a $20,200 cap. However, the OBBBA also introduced a phase-out mechanism: for taxpayers with modified adjusted gross income (MAGI) above $505,000 (single/HOH) or $252,500 (MFS), the cap is reduced by 30 cents for every dollar of income above the threshold, with a floor of $10,000. This calculator helps you determine your actual SALT deduction under the 2026 rules, compare it against the old $10,000 cap, and see whether itemizing or taking the standard deduction makes more financial sense. It also estimates the federal tax savings from the higher cap based on your marginal tax bracket.

How to Use

Enter your estimated state income tax and property tax for 2026.
Add any local income or sales taxes if applicable.
Enter your mortgage interest and charitable contributions to see your full itemized deduction total.
Enter your MAGI to check if the phase-out applies (kicks in above $505,000 for single, $252,500 for MFS).
Select your filing status and tax bracket to see your estimated tax saving vs. the old $10,000 cap.

Why Use This Tool?

The 2026 SALT cap is $40,400 — a $30,400 increase over the old $10,000 TCJA cap

For a taxpayer in the 32% bracket, the increase is worth up to $9,728 in federal tax savings

More households can now benefit from itemizing rather than taking the standard deduction

Homeowners in CA, NY, NJ, MA, CT with $25,000+ in annual state/local taxes recapture significant deductions

Cap is indexed at 1% annually through 2029

Tips & Best Practices

Use your final W-2 state income tax withheld as a proxy for state income tax if you're not sure of your exact liability.
Property tax is the amount actually paid in 2026 — use your December/January tax bills as a guide.
If you paid sales tax instead of state income tax (Texas, Florida, etc.), use the higher of the two, not both.
The phase-out ($505k single) is rare — if you're near this threshold, consider whether IRMAA and NIIT also apply.
Charitable contributions of appreciated stock allow you to deduct fair market value without recognizing the gain — a powerful combo with the new SALT cap.

Frequently Asked Questions

What is the SALT deduction cap for 2026?

The 2026 SALT cap is $40,400 for single, married filing jointly, and head of household filers — up from $10,000 under the old TCJA limit. The cap for married filing separately is $20,200. The OBBBA indexes the cap at 1% per year through 2029.

Who benefits most from the higher SALT cap?

Homeowners in high-tax states — California, New York, New Jersey, Massachusetts, Connecticut — who previously hit the $10,000 cap quickly. If your property tax alone exceeds $10,000, the new cap could add tens of thousands of dollars to your itemized deductions.

Does the SALT cap phase out at high incomes?

Yes. For single and HOH filers with MAGI above $505,000, the cap is reduced by 30 cents for each dollar over the threshold. For married filing separately, the phase-out starts at $252,500. The cap returns to $10,000 in 2030 unless Congress extends it.

Can I deduct both state income tax and property tax?

Yes, but both are combined into your total SALT deduction and subject to the same $40,400 cap. You cannot deduct them separately beyond the cap. You may use state sales tax instead of state income tax (whichever is higher), but not both.

What does this calculator NOT cover?

This calculator does not model the alternative minimum tax (AMT), which disallows the SALT deduction entirely. It also does not account for foreign tax credits, state-specific deductions, the mortgage interest cap on debt over $750,000, charitable contribution limits, or the interaction with other itemized deductions. The phase-out thresholds shown apply to 2026 only and may change in future years. Consult a tax professional for your complete return.

Real-world Examples

MFJ couple in New Jersey

Married filing jointly with $22,000 state income tax, $14,000 property tax, $18,000 mortgage interest, and $5,000 charitable contributions at 24% marginal rate.

Input

State IT: $22,000 | Property: $14,000 | Mortgage: $18,000 | Charity: $5,000 | MAGI: $280,000 | Rate: 24%

Output

Total SALT: $36,000 | SALT deduction: $36,000 (under $40,400 cap)
Old cap deduction: $10,000 | Extra deduction: $26,000
Tax saving vs old cap: $26,000 × 24% = $6,240
Total itemized: $73,000 vs. $32,200 standard → Itemize