2025 SALT Deduction Limit
The 2025 SALT Deduction Limit is $40,000.
Effective 2025-01-01Source: 2025 Instructions for Schedule A (Form 1040) (IRS)Verified 2026-08-30
Compared with 2024
| Item | 2024 | 2025 | Change |
|---|---|---|---|
| Deduction limit | $10,000 | $40,000 | +$30,000 (+300.0%) |
Who it applies to
Taxpayers who itemize deductions on Schedule A (Form 1040) and pay state and local income, sales, or property taxes
What changed this year, and why
For 2025, the overall limit on the deduction for state and local income, sales, and property taxes (the SALT deduction) is $40,000, up from $10,000 in 2024.
Common questions
- Does the limit apply to all state and local taxes?
- The limit applies to the combined total of state and local income taxes, sales taxes, and property taxes reported on Schedule A (Form 1040), lines 5a, 5b, and 5c.
- Is the limit reduced for higher-income taxpayers?
- Yes. The source document states that the limit is reduced for higher-income taxpayers, but the limit will not be reduced below $10,000.
Every amount on this page is a published figure rather than yours. The SALT cap headroom takes the number you enter and works it out against them, showing which published figure it used.
The limit shrinks above a stated income
For 2025 the overall SALT deduction limit is $40,000, and that limit is not the whole rule: it is reduced once modified adjusted gross income passes a threshold. The Schedule A instructions state the threshold as $500,000, or $250,000 for a married person filing separately. A taxpayer whose MAGI is at or below the threshold claims the full $40,000; above it, the limit shrinks as income rises. The instructions also state a floor below which the reduction stops, and that floor is a separate amount this page does not publish, so it is not stated here.
The overall limit is reduced if your modified adjusted gross income is more than $500,000 ($250,000 if married filing separately)
2025 Instructions for Schedule A (IRS)
Income taxes or sales taxes, one or the other
When itemizing deductions on Schedule A, taxpayers must choose between deducting state and local general sales taxes or state and local income taxes. You cannot deduct both categories in the same tax year. This election allows taxpayers to select whichever option provides the larger deduction based on their circumstances. For example, if you live in a state with no income tax but made significant purchases subject to sales tax, electing the sales tax deduction may be more beneficial. Conversely, if you had substantial state income tax withholdings, the income tax deduction may be the better choice. The election applies to the total amount claimed on line 5a of Schedule A, and you must make this choice when filing your return. Once made, the election is binding for that tax year.
You can elect to deduct state and local general sales taxes instead of state and local income taxes. You can't deduct both.
2025 Instructions for Schedule A (IRS)
What is not a deductible tax
Not all taxes you pay are deductible as itemized deductions. Federal income taxes and most federal excise taxes cannot be deducted. Social security, Medicare, federal unemployment (FUTA), and railroad retirement (RRTA) taxes are also non-deductible. Customs duties, federal estate and gift taxes, and certain state and local taxes fall into this category as well. Specifically, state and local taxes on gasoline, car inspection fees, assessments for sidewalks or other property improvements, taxes you paid on behalf of someone else, and license fees such as marriage, driver's, or pet licenses are not deductible. Foreign personal or real property taxes also cannot be deducted. Only specific categories of state and local income, sales, and property taxes qualify for the SALT deduction, subject to the overall limit.
Certain state and local taxes, including 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).
2025 Instructions for Schedule A (IRS)
Payroll contributions that do count
Mandatory payroll contributions to certain state benefit funds are deductible as state and local taxes. Specifically, 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 qualify as deductible state taxes. Additionally, mandatory contributions to state unemployment funds in Alaska, California, New Jersey, or Pennsylvania are deductible. Mandatory contributions to state family leave programs, such as the New Jersey Family Leave Insurance program and the California Paid Family Leave program, also count. These mandatory payroll deductions are treated as state taxes paid and can be included in your SALT deduction, subject to the overall $40,000 limit. Voluntary contributions to similar programs do not qualify.
Mandatory contributions you made to the California, New Jersey, or New York Nonoccupational Disability Benefit Fund; Rhode Island Temporary Disability Benefit Fund; or Washington State Supplemental Workmen's Compensation Fund.
2025 Instructions for Schedule A (IRS)
You only get this if you itemize
The SALT deduction is only available if you itemize your deductions on Schedule A. You cannot claim state and local tax deductions if you take the standard deduction. In most cases, your federal income tax will be lower if you take the larger of your itemized deductions or your standard deduction. This means you must compare your total itemized deductions, including state and local taxes, mortgage interest, charitable contributions, and other qualifying expenses, against the standard deduction amount for your filing status. Only if your itemized deductions exceed the standard deduction should you itemize. The SALT deduction, even when it reaches the $40,000 limit, is just one component of your total itemized deductions. If your combined itemized deductions do not exceed the standard deduction, you receive no tax benefit from your state and local tax payments.
In most cases, your federal income tax will be less if you take the larger of your itemized deductions or your standard deduction.
2025 Instructions for Schedule A (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.
2025 Instructions for Schedule A (Form 1040) (IRS)
- Deduction limit
The overall limit on the deduction for state and local income, sales, and property taxes has increased to $40,000 ($20,000 if married filing separately)