Limitation on Deduction for State and Local Taxes (SALT)

Provides a temporary increase to the state and local taxes (SALT) deduction limitation from $10,000 to $40,400 effective for calendar years that begin in 2025 and end before January 1, 2030. The applicable limitation amount is half the applicable limitation amount in the case of a married individual filing a separate return.

For tax year 2026, the amount increased to:

• $40,400 for single filers, heads of household, and married couples filing jointly
• $20,200 if married filing separately

The overall limit is reduced if taxpayer’s modified adjusted gross income is more than $505,000 ($252,500 if married filing separately), but will not be reduced below $10,000 ($5,000 if married filing separately).