The 2026 SALT cap: $40,400, the phase-down and who benefits
The deduction for state and local taxes (SALT) was capped at $10,000 for years. The OBBBA raised the cap to $40,000 for 2025 and $40,400 for 2026, then 1% more each year through 2029. High earners get less, and the cap returns to $10,000 in 2030. You must itemize to use it.
| Key fact | 2026 rule |
|---|---|
| 2026 cap | $40,400 ($20,200 if married filing separately) |
| Phase-down starts | MAGI over $505,000 |
| Phase-down rate | 30% of MAGI over the threshold |
| Floor | $10,000 |
| Need to itemize? | Yes — Schedule A |
| Ends | Reverts to $10,000 in 2030 |
What counts as SALT
State and local property taxes plus either state and local income taxes or general sales taxes — whichever is larger. Federal taxes never count.
Worked example
The Chens (married, filing jointly) pay $31,000 of property tax and $14,000 of state income tax: $45,000 of SALT. Their MAGI is $380,000, below the $505,000 line, so the full $40,400 cap applies. They deduct $40,400, and $4,600 is disallowed.
If their MAGI were $550,000, the cap would shrink by 30% × $45,000 = $13,500 to $26,900.
When the cap hits the floor
The reduction cannot take the cap below $10,000. For 2026 the floor is reached at a MAGI of about $606,000.
Should you itemize?
The cap only matters if your itemized deductions exceed your standard deduction ($16,100 single, $32,200 joint, $24,150 head of household in 2026). A couple with $40,400 SALT, $12,000 mortgage interest and $4,000 charity has $56,400 of itemized deductions — $24,200 more than the standard deduction. See our standard vs itemized guide.
Frequently asked questions
What is the SALT cap for 2026?
$40,400, phasing down by 30% of MAGI over $505,000, with a $10,000 floor.
Is the higher cap permanent?
No. It rises 1% a year through 2029 and returns to $10,000 in 2030 under current law.
Does the cap apply per person?
Per return. Married filing separately gets half.
Do I need to itemize?
Yes. SALT is claimed on Schedule A.
Deductions basics · Phase-outs · Schedule 1-A · SALT Cap Calculator
This article is educational information, not tax advice. Rules can change and your situation may differ. Confirm details on IRS.gov or with a tax professional. Figures reflect law and IRS guidance as of 2026-10-21. See our methodology.