SALT Cap Calculator 2026 — Free
See how the OBBBA $40,000 SALT deduction cap affects your federal taxes compared to the old $10,000 cap. Estimate your tax savings instantly.
Your SALT Deduction Comparison
The OBBBA raised the State and Local Tax (SALT) deduction cap from $10,000 to $40,000 for 2026, making itemized deductions viable for millions more homeowners in high-tax states like New York, New Jersey, California, and Connecticut.
How It Works
- Enter your state and local taxes
- Select your filing status
- Enter your adjusted gross income
- Review your SALT deduction and savings
Understanding the SALT Cap Under OBBBA
The State and Local Tax (SALT) deduction allows taxpayers who itemize to deduct state income taxes, property taxes, and local taxes from their federal taxable income. The 2017 Tax Cuts and Jobs Act (TCJA) capped this deduction at $10,000 ($5,000 for married filing separately), a limit that disproportionately affected homeowners in high-tax states. The One Big Beautiful Bill Act (OBBBA) of 2025 significantly raised this cap to $40,000 ($20,000 MFS) starting in 2026, providing substantial relief to millions of taxpayers.
What Changed in 2026
Under the old TCJA rules, a homeowner paying $8,000 in state income tax and $12,000 in property tax could only deduct $10,000 of the $20,000 total. Under the OBBBA, that same taxpayer can now deduct the full $20,000 — an additional $10,000 deduction worth $2,200 in tax savings at the 22% bracket. The new $40,000 cap means most taxpayers can deduct all of their state and local taxes. Only those in the highest-tax areas with expensive homes may still be limited. If you're deciding between itemizing and the standard deduction, use our standard vs. itemized deduction calculator to compare all your deductions side by side.
Which States Benefit Most
Taxpayers in states with high income tax rates and high property values see the greatest benefit. New York, New Jersey, California, Connecticut, and Illinois top the list. In New York, the average combined state and local tax burden for a middle-income homeowner often exceeds $15,000, meaning the old $10,000 cap left thousands of dollars on the table. New Jersey homeowners pay some of the highest property taxes in the nation — averaging over $9,000 per year — so the higher cap makes a meaningful difference. California's progressive income tax (up to 13.3%) means higher earners were particularly squeezed by the old cap. Seniors in high-tax states who also benefit from the new senior standard deduction bonus may see even larger combined savings.
Should You Itemize Now?
With the SALT cap rising to $40,000, many taxpayers who previously took the standard deduction may find that itemizing is now more advantageous. If your combined SALT, mortgage interest, and charitable contributions exceed the standard deduction ($16,100 single, $32,200 MFJ, $24,150 HOH in 2026), itemizing saves you more. This calculator shows whether your SALT deduction alone exceeds your standard deduction — but remember to add mortgage interest and charitable gifts for the full comparison. The breakeven point is lower than ever thanks to the higher cap.
Example Savings by State
| State | Typical SALT | Old Cap Deduction | New Cap Deduction | Extra Savings (22%) |
|---|---|---|---|---|
| New York | $22,000 | $10,000 | $22,000 | $2,640 |
| New Jersey | $18,500 | $10,000 | $18,500 | $1,870 |
| California | $20,000 | $10,000 | $20,000 | $2,200 |
| Connecticut | $17,000 | $10,000 | $17,000 | $1,540 |
| Illinois | $14,000 | $10,000 | $14,000 | $880 |
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