New limits for 2026 could open the door to bigger tax savings.
The 2026 SALT cap is $40,400 – about 4x the old $10,000 limit.
Combined with mortgage interest and charitable giving, you may now exceed the standard deduction by itemizing.
The higher cap phases down above $505,000 MAGI and reverts to $10,000 in 2030.
Your tax professional can run both scenarios to see what saves you more.
What is a SALT deduction?
The SALT deduction allows taxpayers who itemize deductions to subtract state and local taxes (SALT) from their federal taxable income. This includes property taxes, state income taxes (or sales taxes if you elect that option), and certain other local taxes.
Under current law (OBBBA), the deduction is capped at $40,400 for 2026 (up from the previous $10,000 limit). It benefits only those whose total itemized deductions exceed the standard deduction. The higher cap is temporary through 2029 and phases down for high-income earners.
SALT can provide significant tax savings for homeowners and residents in high-tax states, but its value depends on your overall tax situation. Consult your tax professional to discuss in more detail.