Quick answer. For 2026, state and local taxes on Schedule A are capped at $40,400 ($20,200 married filing separately). Above $505,000 of modified AGI the cap drops by 30 cents per dollar, down to a $10,000 floor. A New Jersey couple paying $30,000 of state income tax and $14,000 of property tax with $600,000 of modified AGI would have a $11,900 cap and could deduct $11,900 of the $44,000 paid.
Estimate your deductible SALT
Enter your figures to see your limit and how it compares with the standard deduction.
The enhanced deduction for seniors is separate and doesn't depend on itemizing, so it isn't in this comparison. See the senior tax relief checker.
The federal rule
The 2025 Schedule A instructions put state and local income (or general sales) tax, real estate tax and personal property tax under one limit on line 5e. The figures the IRS has published:
| Year | Limit | Reduced when modified AGI is over | Never below |
|---|---|---|---|
| 2025 | $40,000 ($20,000 MFS) | $500,000 ($250,000 MFS) | $10,000 ($5,000 MFS) |
| 2026 | $40,400 ($20,200 MFS) | $505,000 ($252,500 MFS) | $10,000 ($5,000 MFS) |
| 2027 to 2029 | Rises by one percentage point a year, per the IRS's Working Families Tax Cuts webinar. Dollar figures not yet published; check irs.gov. | ||
The reduction is 30% of the modified AGI above the threshold (worksheet line 7 in the Schedule A instructions). Modified AGI here is Form 1040 line 11b plus certain excluded income from Puerto Rico and Forms 2555 and 4563. 2026 figures: Publication 505 (2026), the 2026 Form 1040-ES correction and the 2026 draft Schedule A.
Standard deduction to compare against
2025: $15,750 single or married filing separately, $31,500 married filing jointly, $23,625 head of household, plus $1,600 per age-65-or-blind box ($2,000 if unmarried) (Publication 554, Topic 551). 2026: $16,100, $32,200 and $24,150, plus $1,650 per box ($2,050 if unmarried) (Rev. Proc. 2025-32). Married filing separately has extra standard-deduction rules; see Topic 551.
New Jersey numbers to gather
- Property tax: what you actually paid during the calendar year, including quarterly payments made through your mortgage escrow (your lender's year-end statement shows them). Publication 530 says you deduct only what the lender paid to the town, not what you deposited into escrow.
- NJ income tax: NJ withholding on your W-2s and 1099s, estimated payments made in the year, and any balance you paid with last year's NJ-1040.
- New Jersey's own property tax deduction on the NJ-1040 (up to $15,000, or a $50 credit) is a separate state benefit with its own rules (NJ Division of Taxation). Property tax relief programs are listed on the Division of Taxation's relief page.
Sources
Opened and checked November 2026.
- IRS: Instructions for Schedule A (Form 1040) (2025), line 5e
- IRS Topic no. 503, Deductible taxes
- IRS Publication 505 (2026), Tax Withholding and Estimated Tax
- IRS: Correction to state and local income tax deduction amount in the 2026 Form 1040-ES
- IRS: 2026 Schedule A (Form 1040), draft
- IRS: Understanding the Working Families Tax Cuts, individual provisions (webinar script)
- IRS Publication 554 (2025), Tax Guide for Seniors
- IRS Topic no. 551, Standard deduction
- IRS Revenue Procedure 2025-32 (2026 inflation adjustments)
- IRS Publication 530 (2025), Tax Information for Homeowners
- NJ Division of Taxation: Property Tax Deduction/Credit for Homeowners and Renters
- NJ Division of Taxation: Property Tax Relief Programs
An organizer and calculator, not tax, legal or benefits advice. MCC Solutions is not a CPA firm and is not affiliated with the IRS or the State of New Jersey. Your tax preparer and the IRS instructions for your year control the result. The tool runs in your browser, and nothing you enter is sent or saved.
Common questions
What is the SALT deduction limit for 2026?
$40,400, or $20,200 if married filing separately. It shrinks by 30% of modified AGI over $505,000 ($252,500 married filing separately), but not below $10,000 ($5,000 married filing separately). For 2025 the figures were $40,000 and $500,000.
Does New Jersey property tax count toward the federal SALT limit?
Yes. State and local real estate taxes on property you own that isn't used for business go on Schedule A line 5b, together with state income tax (or general sales tax) on line 5a and personal property tax on 5c. All three share one limit.
How does the limit work if we file separately?
Each spouse uses half: $20,000 for 2025 or $20,200 for 2026, with the income threshold also halved ($250,000 or $252,500) and a $5,000 floor.
Should I itemize or take the standard deduction?
Whichever is larger usually lowers your tax more. The calculator adds your deductible SALT and any other itemized deductions you enter and compares them with your standard deduction. Your tax preparer can confirm with the full return.
What about years after 2026?
An IRS webinar says the limit rises by one percentage point a year through 2029. The IRS hasn't published those dollar figures yet, so the calculator stops at 2026. Check irs.gov before you plan for 2027.
Does my ANCHOR or Senior Freeze payment change what I can deduct?
IRS Publication 530 says a refund or rebate of real estate taxes you paid in the same year reduces your deduction. How a particular New Jersey payment is treated is a question for your tax preparer.
Related: Senior tax relief checker · NJ property tax relief for seniors · Self-employed tax calculator