--- title: "SALT Deduction Cap 2026: $40,400 Limit and Phase-Down | TaxWren" description: "For 2026 you can deduct up to $40,400 of state and local taxes if you itemize. Above $505,000 of MAGI the cap drops by 30% of the excess, to $10,000." url: https://taxwren.com/blog/salt-deduction-cap --- [Income tax](/blog/income-tax) · Explainer # SALT deduction cap for 2026: $40,400, and how it shrinks above $505,000 For 2026 you can deduct up to $40,400 of state and local taxes if you itemize. Above $505,000 of MAGI the cap drops by 30% of the excess, to $10,000. By [the TaxWren team](/about#who-writes) · Updated October 22, 2026 · 2 min read ## Key takeaways - If you itemize, state and local income (or sales) taxes plus property taxes are deductible up to $40,400 for 2026 ($20,200 married filing separately), up from $40,000. - With modified AGI over $505,000, the cap falls by 30% of the excess, but never below $10,000. At $606,333 and above it is $10,000. - The higher cap lasts through 2029. From 2030 it returns to $10,000 under current law. For 2026 the deduction for state and local taxes (SALT) is capped at $40,400 per return, or $20,200 if you are married filing separately, up from $40,000 in 2025. The cap shrinks once modified AGI passes $505,000: it drops by 30% of the amount over, but not below $10,000. You only get the deduction if you itemize. ## What counts toward the cap The cap covers the state and local taxes you deduct on Schedule A: - state and local income taxes, including amounts withheld from your pay and estimated payments, _or_ general sales taxes instead; - real estate taxes on your home and other property you own personally (see the [property tax calculator](/property-tax-calculator)); - personal property taxes charged every year and based only on value, such as the value-based part of some car or boat taxes. ## How the cap shrinks with income Above the $505,000 threshold, each $1,000 of modified AGI cuts the cap by $300. The cap reaches the $10,000 floor at $606,333. Modified AGI is your AGI with a few adjustments listed in the Schedule A instructions. | Modified AGI | SALT cap | | --- | --- | | $505,000 | $40,400 | | $531,000 | $32,600 | | $556,000 | $25,100 | | $581,000 | $17,600 | | $607,000 | $10,000 | Single, head of household and married filing jointly. Married filing separately: half the cap, threshold and floor. Example A married couple pays $30,000 of state income tax and $15,000 of property tax, $45,000 in all, plus $12,000 of mortgage interest and $3,000 to charity. With modified AGI of $300,000 they deduct $40,400 of SALT and itemize $55,400, $23,200 more than the $32,200 standard deduction. At $556,000 the cap is down to $25,100, so they itemize $40,100, still $7,900 above the standard deduction. ## Itemize or take the standard deduction? The SALT deduction is one of the [itemized deductions](/glossary#itemized-deductions), so it only matters if your itemized total beats the standard deduction: $16,100 for single filers, $24,150 for heads of household and $32,200 for married couples filing jointly in 2026. The [income tax calculator](/income-tax-calculator) uses the standard deduction, so subtract the difference yourself if you itemize. If you live in a state without income tax, the [state map](/states) shows which ones, and deducting sales tax may help. If you live in a high-tax state, see which ones are [ranked highest for income tax](/blog/states-with-highest-income-tax). ## What happens after 2029 The law that raised the cap (Public Law 119-21) lets the cap and the income threshold rise a little each year through 2029. Starting in 2030 the phase-down ends and the cap returns to $10,000 for everyone, unless Congress changes it again. ## Sources 1. IRS: [IRS Schedule A (Form 1040) 2026 draft, line 5e](https://www.irs.gov/pub/irs-dft/f1040sa--dft.pdf) (official) 2. US Congress: [Public Law 119-21, section 70120 (limitation on the SALT deduction)](https://www.govinfo.gov/content/pkg/PLAW-119publ21/pdf/PLAW-119publ21.pdf) (official) 3. IRS: [Topic 503, Deductible taxes](https://www.irs.gov/taxtopics/tc503) (official) Figures come from the data files behind our calculators and update with them. See our [methodology](/methodology) and [editorial policy](/editorial-policy). This article is general information, not tax advice. ## Frequently asked questions ### What is the SALT cap for 2026? $40,400 for single, head of household and married filing jointly returns, and $20,200 for married filing separately. It is reduced for modified AGI over $505,000 ($252,500 separately). ### Is the SALT cap per person or per return? Per return. A married couple filing jointly gets one $40,400 cap, the same as a single filer. Filing separately gives each spouse $20,200. ### Do I get the SALT deduction if I take the standard deduction? No. State and local taxes are an itemized deduction on Schedule A. You only benefit if all your itemized deductions add up to more than your standard deduction ($16,100 single, $32,200 married filing jointly for 2026). ### Can I deduct both state income tax and sales tax? No. You choose one: state and local income taxes or general sales taxes. Property taxes are added either way. ### What happens to the SALT cap after 2029? Under current law the phase-down ends and the cap goes back to $10,000 starting in 2030. ## Run your own numbers - [Income tax calculator](/income-tax-calculator) Federal and state income tax owed for 2026. - [Property tax calculator](/property-tax-calculator) Yearly and monthly property tax on a home in any state from its value and the state's effective rate (US Census Bureau data), with every state ranked from the lowest to the highest rate. - [State income tax map](/states) Interactive map and table of 2026 income tax for all 50 states and DC, with links to each state 1099 calculator. ## Latest income tax news - November 12, 2026[IRS reminds filers that $1,000 charity deduction without itemizing starts with 2026 gifts](/news/charitable-deduction-for-non-itemizers-starts-2026) - November 12, 2026[IRS sets 2027 standard deduction at $16,600 for single filers and $33,200 for couples](/news/irs-sets-2027-tax-brackets-and-standard-deduction) - October 29, 2026[Marketplace enrollees will pay up to 10.22% of income for a benchmark plan in 2027](/news/aca-premium-contribution-percentages-rise) ## More on income tax - [Are Social Security benefits taxable? How much is taxed and when](/blog/is-social-security-taxable) - [Child tax credit 2026: amount, refundable part and income limits](/blog/child-tax-credit) - [Marginal vs effective tax rate: what you really pay in 2026](/blog/marginal-vs-effective-tax-rate)