What Is the SALT Deduction?

The SALT deduction lets you deduct state and local income taxes (or sales taxes) plus property taxes on your federal return — but only if you itemize. Since 2018, the total SALT deduction has been capped at $10,000 per return ($5,000 if married filing separately). This cap hit taxpayers in high-tax states like California, New York, and New Jersey hardest. Some states have created workarounds through pass-through entity taxes. The cap is scheduled to expire after 2025, but Congress may act.