The SALT deduction lets itemizers subtract state and local taxes, capped at $40,000 for 2025. The cap drops 30 cents for every dollar of income over $500,000, but never below $10,000. It only helps if you itemize, and the raised cap reverts to $10,000 in 2030. This tool follows the IRS Schedule A worksheet, line by line.
Deductible SALT (line 5e)
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How to Use the SALT Deduction Calculator
- Pick your tax year and filing status, and say whether you itemize on Schedule A. The deduction only helps itemizers.
- Use the toggle to elect income tax or general sales tax on line 5a, then enter that amount plus your real estate and personal property taxes.
- Enter your MAGI. Read the deductible SALT, the effective cap for your year and income, any phase-down and how much SALT is lost.
| Result | What it means |
|---|---|
| Deductible SALT (line 5e) | The capped amount that goes on Schedule A line 5e. It lowers taxable income only if you itemize. |
| Total SALT paid (line 5d) | Your income or sales tax, plus real estate tax, plus personal property tax, before the cap. |
| Effective cap this year | The applicable limit after any high-income phase-down. Marked projected for 2027 to 2029 and reverted for 2030 on. |
| SALT lost to the cap | SALT you paid but cannot deduct because it is over the cap. |
| Phase-down reduction | The 30 percent cut to the cap for income over the threshold, down to the floor. |
| Verdict band | Green when all SALT is under the cap, amber when it is capped or phased down, and a notice when you do not itemize or the year has reverted. |
What Is the SALT Deduction and the $40,000 Cap?
The SALT deduction lets you subtract state and local taxes from your federal taxable income if you itemize on Schedule A. SALT stands for state and local tax. It covers state and local income or sales tax, real estate tax and personal property tax.
For 2017 and earlier there was no dollar cap. The 2017 tax law capped SALT at $10,000. Public Law 119-21, signed July 4, 2025, raised the cap to $40,000 for 2025, with a high-income phase-down. The raised cap is temporary: it applies to tax years 2025 through 2029 and then reverts to $10,000 for 2030 and later, unless Congress acts again.
This is a deduction, not a credit. It lowers the income you are taxed on, so the saving is the deduction times your tax rate. It is one of several 2025 changes in the same law, alongside the no tax on tips deduction. The cap applies to the total of all SALT categories combined, not to each one.
How Does the SALT Deduction Calculator Work?
The calculator copies the IRS State and Local Tax Deduction Worksheet from the 2025 Schedule A instructions, in the order the IRS prints it.
SALT paid = income or sales tax + real estate tax + personal property taxEffective cap = max(base cap - 0.30 x max(0, MAGI - threshold), floor)Deductible = min(SALT paid, effective cap)The base cap is $40,000 for 2025 ($20,000 if married filing separately). The phase-down threshold is $500,000 ($250,000 MFS), and the floor is $10,000 ($5,000 MFS).
- Line 5a to 5d. Add the one state and local tax you elect, income tax or general sales tax, to real estate tax and personal property tax. That sum is line 5d.
- Measure income. Subtract the threshold from your MAGI. If MAGI is at or below the threshold, there is no phase-down.
- Phase down the cap. Multiply the excess by 30 percent and subtract it from the base cap. The result cannot fall below the $10,000 floor ($5,000 MFS).
- Line 5e. Take the smaller of line 5d and the effective cap. That is your deductible SALT.
Because the cut is 30 cents per dollar of income, a full $40,000 cap reaches the $10,000 floor once MAGI is $100,000 over the threshold, which is MAGI of $600,000 in 2025 for anyone other than MFS.
SALT Deduction Example: Worked Cases
Every number below was computed in code from the worksheet rules above, for a married-filing-jointly return in 2025.
| Case | Inputs | Result |
|---|---|---|
| Under the threshold | Income tax $22,000 + real estate tax $13,000, MAGI $300,000 | SALT paid $35,000. MAGI is under $500,000, so the cap stays $40,000. Deductible $35,000. |
| High income, phased down | SALT paid $50,000, MAGI $560,000 | Excess $60,000; 30 percent is $18,000; cap $22,000. Deductible $22,000, with $28,000 lost. |
| Floor reached | SALT paid $60,000, MAGI $600,000 | The reduction hits $30,000, so the cap bottoms out at the $10,000 floor. Deductible $10,000. |
| 2030 reversion (single) | SALT paid $17,000, MAGI $150,000 | The raised cap has sunset. The flat cap is $10,000. Deductible $10,000, with $7,000 lost. |
The first two cases match the worked examples in the verified data for this tool. The fourth shows why the tax year matters: the same taxpayer would deduct far less once the cap reverts.
What Counts as State and Local Taxes?
Schedule A lists SALT on lines 5a to 5c, then totals and caps them. You elect either income tax or general sales tax on line 5a, not both.
| Schedule A line | What it covers | Notes |
|---|---|---|
| 5a income tax | State and local income tax withheld, estimated payments and prior-year balances paid | Pick this or sales tax, whichever is larger. Most people in income-tax states pick this. |
| 5a general sales tax | State and local general sales tax, from receipts or the IRS optional tables | Often the better choice in states with no income tax, such as Texas or Florida. |
| 5b real estate tax | State and local property tax on real estate you own | Only deductible property tax counts; see how it is set in how property tax is calculated. |
| 5c personal property tax | Yearly tax based on the value of personal property, such as some vehicle registration fees | Only the value-based part qualifies, not flat fees. |
Foreign income taxes, federal taxes, and taxes paid for a trade or business on other schedules are not entered here. The cap applies to the combined total on line 5d, not to each line on its own.
The High-Income Phase-Down, Year by Year
The raised cap shrinks for high earners and grows slightly each year through 2029 before it reverts. The table shows the verified figures used by this tool.
| Tax year | Base cap (non-MFS) | Phase-down threshold | Status |
|---|---|---|---|
| 2025 | $40,000 | $500,000 | Confirmed by IRS Schedule A instructions |
| 2026 | $40,400 | $505,000 | Stated in the enacted law |
| 2027 | $40,804 | $510,050 | Projected (101 percent of prior year) |
| 2028 | $41,212 | $515,150 | Projected (101 percent of prior year) |
| 2029 | $41,624 | $520,302 | Projected (101 percent of prior year) |
| 2030 and later | $10,000 | No phase-down | Reversion / sunset |
The reduction is always 30 percent of MAGI over the threshold, and the cap never falls below $10,000 ($5,000 MFS). Married filing separately halves the base cap, the threshold and the floor. The 2027 to 2029 rows come from the statute's 101 percent rule because the IRS has not yet published official dollar figures for those years, so treat them as estimates.
Itemizing Compared with the Standard Deduction
The SALT deduction is worth nothing unless your total itemized deductions beat the standard deduction. The two choices answer different questions.
| Choice | What you subtract | When it wins |
|---|---|---|
| Standard deduction | A flat amount set by filing status | When your itemized total, including SALT, is smaller than the flat amount. |
| Itemize on Schedule A | SALT plus mortgage interest, gifts to charity and more | When those add up to more than the standard deduction. |
A higher SALT cap makes itemizing worthwhile for more people, because more of their state and local taxes now count. If you take the standard deduction, this calculator shows a $0 benefit and a notice, because no SALT is deducted. Compare your whole return before you choose.
Factors That Change Your SALT Deduction
Your Income (MAGI)
MAGI is AGI plus a few foreign and possessions exclusions, so for most filers it equals AGI. Every dollar over the threshold cuts the cap by 30 cents, until the floor. Income swings near the threshold move the cap the most.
Filing Status
Single, head of household, married filing jointly and qualifying surviving spouse all use the full cap and threshold. Married filing separately halves all three numbers, which can sharply limit the deduction.
Income Tax Versus Sales Tax
You elect one on line 5a. In a no-income-tax state the sales tax election often wins. Self-employed filers weighing state taxes may also look at the self-employment tax calculator for the federal side.
The Tax Year
The cap is temporary. It rises slightly each year through 2029, then reverts to $10,000 in 2030. Multi-year planning should account for the scheduled sunset.
When to Use the Calculator
Before You File
Add up your state tax, property tax and any personal property tax, then see how much survives the cap and whether itemizing beats the standard deduction.
When Your Income Is Near $500,000
The phase-down makes the deduction sensitive to income in that range. Test a few MAGI figures to see how fast the cap falls toward the floor.
When Planning Across Years
Because the raised cap sunsets after 2029, compare 2025 to 2029 against the 2030 reversion. It can affect whether to prepay or defer deductible taxes.
Common Mistakes with the SALT Deduction
1. Claiming It Without Itemizing
SALT is a Schedule A itemized deduction. If you take the standard deduction, you get no SALT benefit at all.
2. Adding Income Tax and Sales Tax
Line 5a is one or the other, not both. Pick the larger of the two.
3. Forgetting the Phase-Down
High earners do not get the full $40,000. The cap drops 30 cents per dollar of income over the threshold.
4. Ignoring the 2030 Sunset
The raised cap is temporary. Unless the law changes, the cap is $10,000 again from 2030.
5. Using the Statutory MFS Floor
The law text says $10,000, but the IRS worksheet uses $5,000 for married filing separately. This tool follows the IRS worksheet.
6. Treating the Deduction as a Refund
It lowers taxable income, not your tax dollar for dollar. The saving is the deduction times your marginal rate.
Accuracy and Limitations
The calculator reproduces the IRS State and Local Tax Deduction Worksheet for one return. It does not replace Schedule A or the full Form 1040 instructions.
What it calculates accurately
- The $40,000 cap and $500,000 threshold for 2025, the 30 percent reduction and the $10,000 floor, as printed on the 2025 Schedule A worksheet.
- The married-filing-separately halving of the cap, threshold and floor, with the IRS $5,000 floor.
- The 2026 cap and threshold stated in the enacted law, and the scheduled 2030 reversion to $10,000.
- The line 5a election of income tax or general sales tax, and the combined line 5d total.
What it does not account for
- Whether itemizing beats the standard deduction on your full return, and your other itemized deductions.
- Your exact marginal rate, credits, the alternative minimum tax or state tax effects.
- The 2027 to 2029 caps and thresholds, which are projected from the statute and not yet IRS-published.
- Any law changes after 2026-10-04. Confirm the current limits on irs.gov before you file.
How We Calculate the Deduction
Frequently Asked Questions
How much SALT can I deduct in 2025?
Up to $40,000 of combined state and local taxes if you itemize, or $20,000 if married filing separately. The cap phases down for high earners and cannot be used at all if you take the standard deduction.
At what income does the SALT cap phase down?
The cap starts to shrink when MAGI is over $500,000, or $250,000 if married filing separately. It drops 30 cents for every dollar above that line, down to a $10,000 floor ($5,000 MFS).
When does the $40,000 SALT cap expire?
It is temporary. The raised cap applies to tax years 2025 through 2029, rising slightly each year, then reverts to $10,000 ($5,000 MFS) for 2030 and later unless Congress passes a new law.
Can I deduct SALT if I take the standard deduction?
No. SALT is an itemized deduction on Schedule A. If you take the standard deduction, you get no SALT benefit, which is why this tool shows $0 in that case.
Do I add state income tax and sales tax together?
No. On line 5a you elect one, either state and local income tax or general sales tax, whichever is larger. You then add real estate and personal property taxes.
What counts toward the SALT cap?
State and local income or sales tax, real estate (property) tax, and personal property tax based on value. Federal taxes and foreign income taxes do not count on this line.
Is the 2027 to 2029 cap official?
Not yet. The 2025 cap is confirmed by the IRS and the 2026 cap is in the enacted law. The 2027 to 2029 figures are projected from the statute's 101 percent rule, so treat them as estimates.
How does married filing separately change the cap?
It halves everything: the cap is $20,000 for 2025, the phase-down threshold is $250,000, and the floor is $5,000. The IRS worksheet uses the $5,000 floor even though the law text says $10,000.
What is MAGI for the SALT phase-down?
MAGI is your adjusted gross income plus any foreign earned income or Puerto Rico and possessions income excluded under sections 911, 931 and 933. For most filers MAGI equals AGI.
Does the SALT deduction lower my tax dollar for dollar?
No. It lowers your taxable income, so the saving equals the deduction times your marginal tax rate. It is a deduction, not a credit.
Is my data saved?
No. The calculation runs in your browser and nothing is sent to our servers. Anything you choose to Save stays in this browser only.
Sources
- IRS 2025 Instructions for Schedule A (Form 1040), Line 5e and State and Local Tax Deduction Worksheet (IRS, 2025 tax-year instructions, read 2026-10-04).
- IRS Instructions for Schedule A (Form 1040), PDF (IRS, 2025 instructions PDF, read 2026-10-04).
- Public Law 119-21 (OBBBA), Sec. 70120, adding IRC 164(b)(7) (Congress.gov, enacted July 4, 2025; 139 STAT. 169-170; read 2026-10-04).
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Explore all finance calculatorsThis calculator gives an educational estimate from the figures you enter. It is an estimate, not tax or financial advice, and it cannot replace your tax return, a tax professional or your loan servicer. This deduction only helps if you itemize, out-year caps are projections, and your result depends on your full return. Check the current Schedule A instructions on irs.gov before you file. MultiCalculators is not affiliated with or endorsed by the IRS, the U.S. Department of the Treasury or the U.S. Department of Education. Spotted an error? Let us know.
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