2018 SALT Deduction Limit
For 2018, the SALT Deduction Limit figures are $10,000 (Deduction limit) and $5,000 (Deduction limit, married filing separately).
Effective 2018-01-01Source: 2018 Instructions for Schedule A (Form 1040) (IRS)Verified 2026-09-03
Who it applies to
Individual taxpayers who itemize deductions on Schedule A of Form 1040 for the 2018 tax year.
What changed this year, and why
The Tax Cuts and Jobs Act set a cap on the itemized deduction for state and local taxes (SALT) at $10,000 for 2018. Married taxpayers filing separately are subject to a lower limit.
Common questions
- Is the limit different for married taxpayers filing separately?
- Taxpayers filing as married filing separately have a lower limit than those filing under other statuses.
- What taxes are subject to the limit?
- The limit covers state and local income taxes (or general sales taxes, if elected), real estate taxes, and personal property taxes.
The limit shrinks above a stated income
The SALT deduction is subject to an overall dollar cap that applies regardless of income. You cannot deduct more than $10,000 of your combined state and local taxes, including income taxes or general sales taxes, real estate taxes, and personal property taxes. If you are married filing separately, the cap is $5,000. This limit is not phased down based on your income level - there is no income-based phase-down that shrinks the deduction as your earnings increase. However, the overall limitation on itemized deductions based on adjusted gross income no longer applies, though other limitations may still affect the amount you can claim. The flat dollar cap remains in effect for all taxpayers who itemize.
You can’t deduct more than $10,000 ($5,000 if married filing separate) of your total state and local taxes, including income taxes (or gener- al sales taxes, if elected instead of in- come taxes), real estate taxes, and per- sonal property taxes.
2018 Instructions for Schedule A (Form 1040) (IRS)
Income taxes or sales taxes, one or the other
You may choose to deduct state and local general sales taxes in place of state and local income taxes, but you cannot deduct both. This election allows taxpayers in states with no income tax to still receive a SALT deduction benefit. If you make this election, you include your general sales taxes on the appropriate line instead of your income taxes. You must choose one or the other - you cannot combine both types of taxes to reach the $10,000 limit. Most taxpayers choose based on which amount is larger, though you should calculate both to determine which gives you the greater deduction benefit.
You can elect to deduct state and local general sales taxes instead of state and local in- come taxes. You can't deduct both.
2018 Instructions for Schedule A (Form 1040) (IRS)
What is not a deductible tax
Certain taxes are explicitly excluded from the SALT deduction. Federal income taxes and most federal excise taxes cannot be deducted. Social security, Medicare, federal unemployment, and railroad retirement taxes are also non-deductible. Customs duties, federal estate and gift taxes, and certain state and local taxes such as gasoline taxes, car inspection fees, and assessments for property improvements are excluded. Marriage, driver's, and pet license fees do not qualify either. Foreign personal or real property taxes are also non-deductible. These exclusions apply regardless of whether you itemize or whether you are subject to the $10,000 SALT cap.
Taxes You Can't Deduct • Federal income and most excise taxes. • Social security, Medicare, federal unemployment (FUTA), and railroad re- tirement (RRTA) taxes. • Customs duties. • Federal estate and gift taxes. How- ever, see Line 16, later, if you had in- come in respect of a decedent. • Certain state and local taxes, in- cluding tax on gasoline, car inspection fees, assessments for sidewalks or other improvements to your property, tax you paid for someone else, and license fees (for example, marriage, driver's, and pet). • Foreign personal or real property taxes.
2018 Instructions for Schedule A (Form 1040) (IRS)
Payroll contributions that do count
Certain mandatory payroll contributions to state funds count as deductible state and local taxes. These include mandatory contributions you made to the California, New Jersey, or New York Nonoccupational Disability Benefit Fund, the Rhode Island Temporary Disability Benefit Fund, or the Washington State Supplemental Workmen's Compensation Fund. Mandatory contributions to state unemployment funds in Alaska, California, New Jersey, or Pennsylvania also qualify, as do mandatory contributions to state family leave programs like the New Jersey Family Leave Insurance program and the California Paid Family Leave program. These amounts are treated as state income taxes and go on the appropriate line of Schedule A, subject to the overall $10,000 SALT cap. This treatment ensures that required state payroll deductions receive the same tax benefit as other state income tax withholdings.
Mandatory contributions you made to the California, New Jersey, or New York Nonoccupational Disability Bene- fit Fund, Rhode Island Temporary Disa- bility Benefit Fund, or Washington State Supplemental Workmen's Compensation Fund.
2018 Instructions for Schedule A (Form 1040) (IRS)
You only get this if you itemize
To receive any tax benefit from the SALT deduction limit, you must first itemize your deductions on Schedule A. You do not get the SALT deduction if you claim the standard deduction. The IRS instructions state that your federal income tax is generally lower only if you take the larger of your itemized deductions or your standard deduction. If your itemized deductions, including your state and local taxes, do not exceed your standard deduction, then you receive no benefit from the SALT deduction. You must compare both amounts and choose the larger one to determine your filing method.
In most cases, your federal income tax will be less if you take the larger of your itemized deductions or your standard deduction.
2018 Instructions for Schedule A (Form 1040) (IRS)
Prepaying next year's property tax before it is assessed doesn't count this year
For the 2018 tax year, the Internal Revenue Service limits the state and local tax deduction to $10,000. Prepaying property taxes for 2019 before they are assessed by the local taxing authority does not allow those taxes to count toward the 2018 deduction. The IRS requires that property taxes be both paid in the current year and assessed prior to the beginning of the following year to be deductible. This means taxpayers cannot accelerate their 2019 property tax liability into 2018 simply by making an early payment if the assessment has not yet occurred. The $10,000 cap applies to the total of all state and local taxes claimed, including property taxes that meet the assessment and payment timing requirements. Taxpayers should verify with their local tax authority when assessments are made to determine which year's taxes are eligible for deduction.
Prepayment of next year's property taxes. Only taxes paid in 2018 and as- sessed prior to 2019 can be deducted for 2018. State or local law determines whether and when a property tax is as- sessed, which is generally when the tax- payer becomes liable for the property tax imposed.
2018 Instructions for Schedule A (Form 1040) (IRS)
A refund of tax you already deducted can come back as income
Under Internal Revenue Service rules for the 2018 tax year, if a taxpayer received a refund of state or local general sales taxes in 2018 that related to purchases made in an earlier year, the refund itself does not reduce the 2018 sales tax deduction. However, if the taxpayer deducted those actual state and local general sales taxes in the earlier year and that deduction reduced their tax liability, they may have to include the refund in income on Schedule 1 (Form 1040), line 21. This recovery rule ensures that a tax benefit previously received is recaptured when the underlying tax is returned. The $10,000 SALT deduction limit applies to the total of state and local taxes claimed, but the income inclusion of a prior-year refund is handled separately from that cap. Taxpayers should consult Recoveries in Publication 525 for details on how to report the refunded amount.
However, if you deduc- ted your actual state and local general sales taxes in the earlier year and the de- duction reduced your tax, you may have to include the refund in income on Schedule 1 (Form 1040), line 21.
2018 Instructions for Schedule A (Form 1040) (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
2018 Instructions for Schedule A (Form 1040) (IRS)
- Deduction limit
The deduction for state and local taxes is limited to $10,000 ($5,000 if married fil- ing married separately).
- Deduction limit, married filing separately
The deduction for state and local taxes is limited to $10,000 ($5,000 if married fil- ing married separately).