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 TCJA cap was set to lapse after 2026, but OBBBA (2025) instead raised it to $40,000 for 2026-2029 (with a $10,000 floor above $500,000 MAGI); it is scheduled to return to $10,000 in 2030.

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 even without the SALT deduction, and OBBBA made that higher exemption permanent. Had the TCJA sunset, both would have reversed - SALT uncapped BUT AMT triggered for many filers - making the net benefit smaller than the headline cap removal suggests; the pre-TCJA column models that scenario.