Your 2026 deductions
Use your W-2 Box 17 or CA/NY/NJ state return estimate
NYC local income tax, or state sales tax if higher than state income tax
Phase-out applies above $505,000 (single) / $252,500 (MFS)
Your 2026 SALT result
Itemizing gives you $26,800 more in deductions
+$26,000 extra deduction × 24% bracket = $6,240 in federal tax savings from the new cap
| 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 |
What is How to Use the SALT Deduction Calculator?
The SALT (State and Local Tax) deduction lets you deduct state income taxes, property taxes, and local taxes from your federal taxable income — if you itemize. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, raised the cap from $10,000 to $40,400 for 2026, delivering a major benefit to homeowners in high-tax states like California, New York, New Jersey, and Massachusetts.
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?
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.