2020 SALT Deduction Limit
The 2020 SALT Deduction Limit is $10,000.
Effective 2020-01-01Source: 2020 Instructions for Schedule A (Form 1040) (IRS)Verified 2026-08-29
Compared with 2019
Every figure on this page is unchanged from 2019.
| Item | 2019 | 2020 | Change |
|---|---|---|---|
| Deduction limit | $10,000 | $10,000 | +$0 (+0.0%) |
Who it applies to
Taxpayers who itemize deductions and pay state and local income, personal property, or real estate taxes
What changed this year, and why
For 2020, the deduction for state and local taxes (SALT) is limited to $10,000 on a federal income tax return. Taxpayers who are married and file separately have a lower limit. The cap applies to the combined total of state and local income taxes, personal property taxes, and real estate taxes a taxpayer includes on Schedule A.
Common questions
- Which taxes are subject to the $10,000 SALT deduction limit?
- The limit covers state and local income taxes (or sales taxes), personal property taxes, and real estate taxes. The cap applies to the combined total of these taxes.
The limit shrinks above a stated income
For tax year 2020, the total deduction for state and local taxes is generally limited to $10,000. If you are married and filing separately, this limit is reduced to $5,000. This cap applies to the combined total of all state and local taxes that you include on lines 5a, 5b, and 5c of Schedule A, which covers state and local income taxes (or general sales taxes), real estate taxes, and personal property taxes. Regardless of how much you actually paid in qualifying state and local taxes during the year, your total deduction for these taxes cannot exceed the applicable limit. This means that even if you paid substantially more than the threshold in combined state and local taxes, the excess amount above the limit provides no federal tax benefit. Taxpayers in high-tax states are more likely to be affected by this cap, as their combined tax payments may significantly exceed the allowable maximum.
The deduction for state and local taxes is generally limited to $10,000 ($5,000 if married filing separately). State and lo- cal taxes subject to this limit are the tax- es that you include on lines 5a, 5b, and 5c.
2020 Instructions for Schedule A (Form 1040) (IRS)
Income taxes or sales taxes, one or the other
This rule establishes that taxpayers face a choice between deducting state and local income taxes versus state and local general sales taxes when itemizing deductions. You cannot claim both categories in the same tax year. This election applies specifically to line 5a of Schedule A, where you must decide which type of state and local tax provides the greater benefit. If you choose to deduct general sales taxes, you must check the designated box on line 5a. The alternative is to deduct the state and local income taxes that were withheld from your salary during the year, along with any estimated tax payments made. This mutual exclusivity prevents double-counting of state and local tax obligations and requires taxpayers to calculate which option yields the larger deduction before filing.
You can elect to deduct state and local general sales taxes instead of state and local in- come taxes. You can't deduct both.
2020 Instructions for Schedule A (Form 1040) (IRS)
What is not a deductible tax
The tax code explicitly lists several categories of taxes that taxpayers cannot deduct on their federal returns. Federal income taxes are never deductible, nor are most federal excise taxes. Social security and Medicare taxes (FICA), federal unemployment taxes (FUTA), and railroad retirement taxes (RRTA) are also excluded from deduction eligibility. Customs duties imposed on imported goods cannot be deducted. Federal estate and gift taxes are generally non-deductible, though there is a special exception for income in respect of a decedent. Additionally, certain state and local taxes fall into the non-deductible category, including taxes on gasoline and car inspection fees, as well as assessments for local improvements like sidewalks. These exclusions prevent taxpayers from reducing their federal tax liability through deductions for these specific tax obligations.
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
2020 Instructions for Schedule A (Form 1040) (IRS)
Payroll contributions that do count
Certain mandatory payroll contributions to state benefit programs qualify as deductible state and local taxes. Specifically, mandatory contributions to the California, New Jersey, or New York Nonoccupational Disability Benefit Fund are deductible. Rhode Island's Temporary Disability Benefit Fund and Washington State's Supplemental Workmen's Compensation Fund also fall into this deductible category. Additionally, mandatory contributions to state unemployment funds in Alaska, California, New Jersey, or Pennsylvania can be deducted. Contributions to state family leave programs, such as the New Jersey Family Leave Insurance program and the California Paid Family Leave program, are also deductible when they are mandatory. These contributions are treated as state taxes for deduction purposes because they represent compulsory payments to state-administered programs that provide disability, unemployment, or family leave benefits to workers.
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.
2020 Instructions for Schedule A (Form 1040) (IRS)
You only get this if you itemize
This section describes the precondition for claiming the SALT deduction and other itemized deductions. Taxpayers must choose between itemizing their deductions or taking the standard deduction. The SALT deduction is only available to those who itemize. When filing, taxpayers compare their total itemized deductions (including SALT, mortgage interest, charitable contributions, and other allowable expenses) to their standard deduction amount. They claim whichever is larger. If the standard deduction exceeds the total of all itemized deductions, the taxpayer takes the standard deduction and receives no separate benefit from the SALT deduction or any other individual itemized deduction. This comparison means that for many taxpayers, especially those with lower total expenses, itemizing may not be beneficial even if they paid significant state and local taxes. The decision to itemize must be made for the entire return; taxpayers cannot itemize some deductions and take the standard deduction for others.
Use Schedule A (Form 1040) to figure your itemized deductions. In most cases, your federal income tax will be less if you take the larger of your itemized deductions or your standard deduction.
2020 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.
2020 Instructions for Schedule A (Form 1040) (IRS)
- Deduction limit
The deduction for state and local taxes is generally limited to $10,000 ($5,000 if married filing separately)