The U.S. federal cap on the state and local tax deduction, known as SALT, will rise to $40,400 in 2026 from $40,000 in 2025. CNBC reports that the change stems from President Donald Trump's “big beautiful bill,” which temporarily raised the limit through 2029.
The SALT cap stood at $10,000 in 2024. Under the law, it will increase by 1% a year from 2026 through 2029 before reverting to $10,000 in 2030. The deduction covers property taxes plus either state and local income taxes or sales taxes, but not both.
The tax break is available only to filers who itemize rather than claim the standard deduction. For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples. According to the latest IRS data, about 90% of filers used the standard deduction in tax year 2023.
Experts say the higher SALT deduction typically benefits “upper-middle to upper-income earners.” One strategy they suggest is bunching deductions into a single tax year to get above the standard deduction threshold. For example, taxpayers who have already received a property tax assessment may be able to make next year’s payment by Dec. 31.
A similar approach may apply to state quarterly estimated taxes tied to self-employment, small business income or investment earnings. Flexibility can be limited, however, if property taxes are handled through a mortgage escrow account, and payment deadlines can vary by state and jurisdiction.
