SALT Deduction Cap Rises to $40,400 for 2026, Setting Up a Year-End Tax Planning Race
The federal cap on state and local tax deductions will increase to $40,400 for 2026, giving higher-income households in high-tax states a larger window to reduce taxable income. Tax advisers say the most effective moves will come before year-end, when timing, prepayments and itemization strategy can still materially affect the size of the deduction.
