SALT Deduction Calculator 2026
Calculate your State and Local Tax deduction under the new $40,400 OBBBA cap. Compare itemizing vs. standard deduction.
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Understanding the 2026 SALT Deduction Changes
The State and Local Tax (SALT) deduction allows taxpayers who itemize to deduct state income taxes, local income taxes, and property taxes from their federal taxable income. The TCJA of 2017 capped this deduction at $10,000, hurting taxpayers in high-tax states like California, New York, New Jersey, and Connecticut.
The OBBBA $40,400 Cap
The One Big Beautiful Bill Act, signed July 4, 2025, raised the SALT cap to $40,400 for 2026 ($20,200 for married filing separately). However, a “SALT torpedo” phasedown reduces the cap by 10% for every $1,000 of MAGI above $500,500 (single) or $500,500 (MFJ), effectively eliminating the benefit for very high earners above $600,000.
Should You Itemize in 2026?
With the higher SALT cap, the calculation has fundamentally changed. Previously, most taxpayers in high-tax states were capped at $10,000 in SALT deductions, making the standard deduction ($16,100 single / $32,200 MFJ) more attractive. Now, a married couple paying $15,000 in property tax and $12,000 in state income tax can deduct the full $27,000 — well above the old $10,000 cap. Combined with mortgage interest and charitable donations, many more taxpayers will benefit from itemizing in 2026.
States Most Affected by the SALT Cap Change
Taxpayers in California, New York, New Jersey, Connecticut, Maryland, Massachusetts, Illinois, and Oregon benefit most from the higher cap, as these states have the highest combined state/local tax burdens. Residents of no-income-tax states (Texas, Florida, etc.) primarily benefit through property tax deductions.