SALT Deduction Calculator 2026 β New $40,000 Cap
Calculate your state and local tax deduction under the new OBBBA $40,000 SALT cap. See your savings vs the old $10,000 limit and phaseout impact.
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Final SALT Deduction
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Total SALT (before cap)
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Phaseout Reduction
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Tax Benefit
SALT Component Breakdown & Old vs New Cap Comparison
How This SALT Deduction Calculator Works
Enter your state income tax (or sales tax), local taxes, and property taxes. Choose your filing status and income. The calculator applies the new OBBBA cap ($40,000 MFJ / $20,000 single) plus the $500,000 MAGI phaseout, then compares your result to the old $10,000 cap to show your additional savings from the new law.
SALT Deduction Formula (OBBBA)
Total SALT = (State Income Tax OR Sales Tax) + Local Tax + Property Tax
New Cap = $40,000 (MFJ) | $20,000 (single, HoH) | $10,000 (MFS)
Phaseout: above $500,000 MAGI β Cap reduced by $0.30 per $1 over
Capped SALT = min(Total SALT, Adjusted Cap)
Tax Benefit = Capped SALT Γ Marginal Rate
Savings vs Old Law = (New Cap Deduction β Old Cap Deduction) Γ Rate
New Cap = $40,000 (MFJ) | $20,000 (single, HoH) | $10,000 (MFS)
Phaseout: above $500,000 MAGI β Cap reduced by $0.30 per $1 over
Capped SALT = min(Total SALT, Adjusted Cap)
Tax Benefit = Capped SALT Γ Marginal Rate
Savings vs Old Law = (New Cap Deduction β Old Cap Deduction) Γ Rate
Example
MFJ, MAGI $250,000, state income tax $18,000, property tax $12,000, marginal rate 24%:
Total SALT: $18,000 + $12,000 = $30,000
New cap ($40,000): limited to $30,000 (under cap)
No phaseout (MAGI under $500,000)
Tax benefit: $30,000 Γ 24% = $7,200
Old $10,000 cap would yield: $10,000 Γ 24% = $2,400
Additional savings from new law: $4,800
Total SALT: $18,000 + $12,000 = $30,000
New cap ($40,000): limited to $30,000 (under cap)
No phaseout (MAGI under $500,000)
Tax benefit: $30,000 Γ 24% = $7,200
Old $10,000 cap would yield: $10,000 Γ 24% = $2,400
Additional savings from new law: $4,800
Extended
State SALT Impact Table
How much residents in the top 15 high-tax states benefit from the new $40K vs old $10K cap
Average SALT amounts for top high-tax states and the benefit from the new $40,000 cap vs the old $10,000 cap. Assumes MFJ, 24% marginal rate, median property tax + state income tax for each state.
Top 15 High-Tax States β SALT Impact Comparison
| State | Avg State Income Tax | Avg Property Tax | Total SALT | Old Cap Deduction | New Cap Deduction | Extra Tax Savings (24%) |
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Frequently Asked Questions
What is the new SALT deduction cap under the OBBBA?
The One Big Beautiful Budget Act raised the SALT (State and Local Tax) deduction cap from $10,000 to $40,000 for married filing jointly filers and $20,000 for single filers. This is a significant increase from the $10,000 cap imposed by the 2017 Tax Cuts and Jobs Act and provides major relief for taxpayers in high-tax states like California, New York, and New Jersey.
What does the SALT deduction phaseout mean?
The new $40,000 SALT cap phases out for high-income taxpayers. Above $500,000 MAGI, the cap is reduced by $0.30 for every $1 of income over $500,000. This means very high earners may not receive the full benefit of the higher cap. The phaseout effectively floors back toward the old $10,000 cap for the highest earners.
Should I deduct state income taxes or sales taxes?
You can deduct either state and local income taxes OR general sales taxes β not both. If you live in a state without income tax (like Texas or Florida), you would use the sales tax option. The IRS provides optional sales tax tables if you do not have records, based on your income and state. Taxpayers in high-income-tax states almost always benefit more from deducting income taxes.
Can I deduct property taxes under the new SALT cap?
Yes. Property taxes paid on your primary residence and other real property are included in SALT. They count toward the same $40,000 (MFJ) or $20,000 (single) cap. If your property taxes plus state income taxes (or sales taxes) exceed the cap, you can only deduct up to the cap amount.
How does the new SALT cap compare to the old $10,000 cap?
For married filing jointly filers, the new cap is four times higher β $40,000 vs $10,000. In high-tax states where combined state income tax plus property tax routinely exceeds $10,000, the benefit can be substantial. A family with $30,000 in SALT payments saves the taxes on an additional $20,000 of deductions compared to the old law.