The SALT cap is $40,000 now — should you itemize again?
The One Big Beautiful Bill Act quadrupled the state-and-local-tax deduction cap for 2026. For New York homeowners, the itemize-vs-standard-deduction math just changed — but only through 2029.
For eight years, the $10,000 SALT cap pushed most taxpayers into the standard deduction. The One Big Beautiful Bill Act changed the equation: for 2026 through 2029, the state-and-local-tax deduction cap is $40,000 for married couples filing jointly ($20,000 for single or married-filing-separately filers), adjusted annually. In 2030 it snaps back to $10,000 — and higher-income households see the expanded cap phased back down.
The new math for New York homeowners
The 2026 standard deduction is about $32,200 for joint filers. A New York homeowner paying, say, $12,000 in property taxes plus $15,000 in state income tax used to hit the $10,000 wall and take the standard deduction. Now that same household can deduct $27,000 in SALT alone — add mortgage interest and charitable giving, and itemizing suddenly wins by real money.
Three things to watch
- It’s temporary. 2026–2029 is a planning window, not a permanent fixture. Bunching deductions into these years can pay off.
- Top-bracket filers face a new cap: the OBBBA limits the value of itemized deductions to 35% for those in the 37% bracket.
- Charitable giving has a new floor: itemizers now face a 0.5%-of-AGI floor on charitable contributions — small donations may no longer clear the bar.
Who benefits most — and a bunching play
The winners are households in high-tax states — New York, New Jersey, California — where property taxes plus state income tax blow past the old $10,000 cap. If your SALT alone is $25,000–$30,000, you’re likely itemizing again for the first time since 2017.
The play worth modeling: bunching. Since the window closes after 2029, consider pulling planned charitable gifts or paying deductible state estimates into 2026–2029 to maximize the years you itemize, then taking the standard deduction in leaner years. Run both scenarios before you commit.
One more wrinkle: the expanded cap phases back down for higher-income households, and married couples filing separately each get $20,000 — so the filing-status math matters more than usual through 2029. If you’re near a phaseout threshold, timing income like bonuses or capital gains around these years can be worth real money. And re-run the comparison every year, not just once — the standard deduction keeps its inflation adjustments while the SALT rules shift beneath it.
The bottom line: if you haven’t run the itemize-vs.-standard-deduction comparison since 2017, run it now. Four years of expanded SALT is a window — use it, and have a 2030 plan for when the cap snaps back to $10,000.
Alex Volkov, CPA is a New York-licensed CPA with over two decades in accounting, focused on resolving IRS tax problems — back taxes, liens, levies, garnishments, and audits — for individuals and businesses nationwide.
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Sources: Kitces.com, “Breaking Down The ‘One Big Beautiful Bill Act’ (OBBBA).” Read the analysis; Uncle Kam, “The One Big Beautiful Bill Act (OBBBA): 2026 Tax Changes and Your Complete Strategy Guide.” Read the guide.