SALT Deduction: How to Write Off State and Local Tax
If you itemize on your annual return, you may be able to write off some property or state tax through the SALT deduction.
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What is the SALT tax deduction?
The state and local tax (SALT) deduction is a federal tax break that allows filers who itemize to deduct a portion of their certain state and local taxes from their taxable income. The state and local tax (SALT) deduction limit is $40,000 in 2025 and $40,400 in 2026.
High earners may only be able to deduct up to $10,000, however. The SALT deduction cap is reduced by $0.30 for every dollar over $500,000 of income in 2025 or $505,000 in 2026.
To take advantage of the SALT tax deduction, you must itemize rather than take the standard deduction when you file your annual tax return. If the SALT deduction and your other write-offs don’t add up to more than the standard deduction amount, it may not make sense to itemize. Here is this year's standard deduction.
Filing status | Deduction amount |
|---|---|
Single | $15,000. |
Married filing jointly | $30,000. |
Head of household | $22,500. |
Note: Those married filing separately follow the deduction for single filers. Surviving spouses follow the deduction for married filers. | |
When does the SALT cap expire?
The current SALT deduction limit is set to revert to $10,000 for all taxpayers in 2029.
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How does the SALT deduction work?
There are a number of taxes covered by the SALT tax deduction: state income taxes, sales tax and even property tax. But for a few of the big ones, you might have to make a choice: You can deduct local and state income taxes or state and local sales taxes. Not both.
Let’s go over these deductions one by one.
SALT deduction for income taxes
If you get a W-2 form from your employer, it’s pretty easy to see what you’ve paid in state or local income taxes over the course of the year. You can use the information on that form to figure out how much state or local income tax you might be able to deduct.
If you are self-employed, note that you can also deduct any estimated taxes you might have paid to your state or local government over the course of a tax year.
And if you had to make any payments on prior-year state or local taxes, you can deduct those, too.
SALT deduction for sales taxes
If you decide it’s a good idea to deduct sales taxes rather than income taxes, there are a few ways to do this. If you have really good records of the sales taxes you’ve paid over the course of the year, you can use those to calculate the exact amount of your deduction.
But not everyone is able to hang onto receipts from each taxable purchase they made throughout the year. So the IRS also offers a sales tax deduction calculator to help you figure out what you can claim.
SALT deduction for property taxes
Generally speaking, you can claim property taxes with your SALT deduction, but some types of payments do not qualify. The IRS says deductible real estate taxes are “levied for the general public welfare. The charge must be uniform against all real property in the jurisdiction at a like rate.”
So, which types of property taxes might not be deductible?
Some taxes assessed by state or municipal governments pay for special benefits for a particular district. Maybe they pay for new sewers for one neighborhood or better sidewalks for a specific area. Because these taxes and benefits don’t affect the entire tax base, they aren’t deductible.
SALT deduction for personal property taxes
You can generally deduct taxes levied on personal property such as a boat or a car. If the tax is based only on the value of the property, and it’s charged annually (even if it’s billed more regularly), the SALT deduction may cover it.
What taxes aren’t covered by the SALT deduction?
The IRS says you can’t use the SALT deduction for “federal income taxes, Social Security taxes, transfer taxes (or stamp taxes) on the sale of property, homeowner's association fees, estate and inheritance taxes, and service charges for water, sewer, or trash collection.”
