What is the SALT deduction cap?
The SALT deduction cap is the federal limitation on the amount of state and local taxes taxpayers can deduct on their income tax returns. For tax years 2025 through 2029, the cap is $40,000 for most filers ($20,000 for married filing separately), up from the previous $10,000 limit imposed by the Tax Cuts and Jobs Act. The cap reduces the amount by 30% of the amount by which the Modified adjusted gross income exceeds $500,000, with a floor of $10,000. Qualifying expenses include state and local income taxes and property taxes, though taxpayers must choose between income and sales taxes. The cap reverts to $10,000 in 2030 under current law, making tax strategies during the 2025-2029 window critical.
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