SALT itemized deduction cap, tax year 2026

For tax year 2026, the state and local tax (SALT) itemized deduction cap under 26 U.S.C. 164(b)(6), as amended by the One Big Beautiful Bill Act (Public Law 119-21) section 70120, is $40,400, up from the prior $10,000 cap. The $40,400 cap applies to taxpayers with modified adjusted gross income of $505,000 or less and phases down to $10,000 for taxpayers with modified AGI above $606,333. Through 2029 the cap increases each year to 101 percent of the prior year's amount. Authority: 26 U.S.C. 164(b)(6), as amended by OBBBA section 70120.