SALT Deduction Calculator

The State and Local Tax deduction was capped at $10,000 per return ($5,000 MFS) by the TCJA starting 2018. Before TCJA there was no cap. Wealthy filers in high-tax states (CA, NY, NJ, IL, MA) routinely deducted $50K-$200K of SALT pre-2018. The cap was a politically targeted feature designed to limit federal subsidies for high-tax states. It expires Dec 31, 2026.

Pass-Through Entity Tax elections (now in 35+ states) shift the SALT deduction from the individual return (capped) to the pass-through entity return (uncapped - fully deductible at the business level). Effective for partners and S-corp shareholders. Workaround is IRS-blessed per Notice 2020-75. Doesn't help W-2 employees; only those with pass-through ownership.

Yes - IRS lets you choose state income tax OR state general sales tax, not both. In income-tax-free states (TX, FL, NV, etc.), sales tax election is the only SALT option and uses IRS-published estimated tables based on income + family size, or actual receipts. Texas residents typically deduct $1,500-$3,000 sales tax under this method.

Pre-TCJA, SALT was added BACK to income for AMT purposes - high-SALT filers often paid AMT, partially negating the SALT deduction benefit. TCJA simultaneously raised AMT exemptions, so few filers paid AMT 2018-2026 even without the SALT deduction. Post-sunset, both reverse: SALT uncapped BUT AMT triggered for many filers - the net benefit is smaller than the headline cap removal suggests.