SALT Deduction Calculator 2026

The State and Local Tax (SALT) deduction allows you to deduct certain state and local taxes from your federal taxable income when you itemize. The Tax Cuts and Jobs Act of 2017 capped this deduction at $10,000, which significantly affected taxpayers in high-tax states. The OBBBA restores much of that lost benefit.

What Changed Under OBBBA

The OBBBA raises the SALT cap to $40,400, a $30,400 increase. This means you can deduct up to $40,400 in combined state, local, and property taxes — four times the previous limit. This primarily benefits homeowners and residents of high-tax states.

What Counts as SALT?

The following taxes are included in the SALT deduction:

• State income taxes (or state sales taxes — you choose whichever gives you a larger deduction, but not both)
• Real estate / property taxes on your primary residence, vacation home, and land
• Local income taxes — city, county, school district, or other municipal income taxes
• Personal property taxes — annual vehicle registration fees based on vehicle value, boat taxes, and similar property-based taxes

Worked Example: The Patel Family in Westchester, NY

Raj and Priya Patel own a home in Westchester County, New York. They have a combined household income of $200,000 and file married filing jointly. Their annual taxes:

• New York state income tax: $11,000
• Westchester County property tax: $14,000
• Local taxes: $2,000
• Total SALT: $27,000

Under the old $10,000 cap, the Patels could only deduct $10,000. Under the new$40,400 cap, they can deduct the full $27,000. That is an additional $17,000 deduction. At their 24% marginal tax rate, this saves them $4,080 per year in federal taxes.

Important: Itemizing Required

To benefit from the SALT deduction, you must itemize your deductions on Schedule A instead of taking the standard deduction. The SALT deduction only helps if your total itemized deductions (SALT + mortgage interest + charitable contributions + medical expenses + other itemized deductions) exceed your standard deduction.

For 2026, the standard deduction is $16,100 (single) or $32,200 (married filing jointly). If your SALT alone is under the standard deduction, you may still benefit from the standard deduction more than from itemizing.

Who Benefits Most?

The SALT cap increase is most valuable for:

• High-tax state residents — New York, New Jersey, California, Connecticut, Massachusetts, Illinois, and Maryland have the highest combined state and local tax burdens
• Homeowners with high property taxes — areas with property taxes above $10,000 per year were most affected by the old cap
• Dual-income households in high-tax states — higher incomes mean higher state income taxes, which were previously capped
• NYC residents — the combination of NY state income tax plus NYC local income tax plus property tax often exceeds $20,000 annually

If your total SALT was already under $10,000 per year, the cap increase does not affect you — you were already deducting the full amount under the old cap.

State-Specific SALT Calculators

We also offer SALT calculators pre-filled with average tax data for the highest-tax states: New York, New Jersey, California, Connecticut, and Massachusetts.

Source: IRS.gov | Congress.gov — One Big Beautiful Bill Act