Forty thousand, with strings attached
Method
Enter your income and the state and local taxes you paid. The tool applies the new $40k cap, runs the 30% high-earner phasedown, and shows what you can actually deduct. Pure arithmetic, nothing stored.
Deductible SALT
$10,000
At the $10,000 floor — the phasedown can take no more.
Deductible
$10,000
Lost to phaseout
$30,000
Lost to cap
$40,000
2025 cap $40,000 · threshold $500,000 · floor $10,000 · usable cap $10,000
Estimate only — not legal or tax advice. Figures are based on the rules as published; your situation may differ. Confirm with the source below.
Rules last updated: June 29, 2026 · thetaxadviser.com ↗
What is the SALT deduction cap?
The state and local tax deduction lets people who itemize subtract their state income and property taxes from federal taxable income. Since 2018 it was capped at $10,000. The One Big Beautiful Bill Act raised that cap to $40,000 for 2025 (and $40,400 for 2026), a welcome change for homeowners in high-tax states — but the larger cap comes with a catch for higher earners.
How the 30% phasedown works
Above a modified adjusted gross income threshold of $500,000 ($505,000 in 2026), the cap shrinks by 30 cents per extra dollar of income. So the usable cap is cap − 0.30 × (MAGI − threshold), and it never drops below a $10,000 floor. Your actual deduction is whichever is smaller: the SALT you paid or that usable cap.
A worked example
A single filer with $600,000 of MAGI who paid $50,000 in state and local taxes sits $100,000 over the threshold. The phasedown cuts the cap by 0.30 × $100,000 = $30,000, dropping it from $40,000 to the $10,000 floor. Even though they paid $50,000, they can deduct only $10,000 — $30,000 lost to the phasedown and $40,000 of SALT left on the table.
What is the SALT deduction?+
The state and local tax (SALT) deduction lets itemizers subtract state income (or sales) taxes plus property taxes from their federal taxable income. It only helps if you itemize rather than take the standard deduction.
What did the One Big Beautiful Bill Act change?+
OBBBA raised the SALT cap from $10,000 to $40,000 for 2025 (then $40,400 for 2026, with small annual bumps). That is a big jump, but lawmakers attached a phasedown that quietly shrinks the benefit for high earners.
How does the hidden 30% phaseout work?+
Once your modified adjusted gross income passes the threshold ($500,000 in 2025, $505,000 in 2026), the cap drops by 30 cents for every dollar over it. The cap never falls below a $10,000 floor, so the phasedown fully bites by roughly $600,000 of MAGI.
What about married filing separately?+
Married filing separately taxpayers get half of everything: a $20,000 cap, a $250,000 threshold, and a $5,000 floor in 2025. This calculator halves those figures automatically when you choose that status.
When does the higher cap go away?+
The expanded cap and phasedown are temporary. Under current law the cap reverts to $10,000 for everyone in 2030 unless Congress extends it.
Is this tax advice?+
No. This is an estimate based on the published rules to help you understand the phasedown. Your actual deduction depends on itemizing, AMT, and other details, so confirm with a tax professional or the source linked below.