For 2026 the ordinary cap is $40,400, or $20,200 if married filing separately. The phase-down begins above modified adjusted gross income of $505,000, or $252,500 for married filing separately. The cap generally cannot fall below $10,000, or $5,000 for married filing separately.
Itemizing must make sense compared with the standard deduction. Business taxes and state pass-through entity elections require separate analysis; they should not be treated as interchangeable with personal itemized deductions.
An example
Hypothetical: an eligible joint-filing household below the phase-down threshold pays $25,000 in deductible personal state and local taxes. The cap alone would not reduce that amount, but the household must still compare itemizing with the standard deduction.
Reviewed October 7, 2026. IRS correction: 2026 SALT cap and phase-down ↗
This is a general reference. Discuss how the rules apply to your business with your tax professional.