The state and local tax deduction—usually called the SALT deduction—is an itemized deduction on Schedule A, not a tax credit. For a 2025 federal return, eligible state and local income or general sales taxes, qualifying real estate taxes, and qualifying personal property taxes are combined under a $40,000 limit for most filing statuses, with a separate limit and income-based reduction for some taxpayers. The amount you can claim depends on what you paid, when it was paid or assessed, your filing status and modified adjusted gross income (MAGI), and whether your total itemized deductions exceed your standard deduction.
What is the state and local tax deduction?
The SALT deduction lets taxpayers who itemize deduct certain state and local taxes on federal Schedule A. The eligible categories generally include state and local income taxes—or, by election, general sales taxes—plus qualifying real estate taxes and value-based annual personal property taxes. These categories share one SALT limit; they do not each get a separate limit. The Internal Revenue Service (IRS) explains the categories and reporting rules in its 2025 Instructions for Schedule A (Form 1040).
A deduction reduces the income subject to federal tax; it does not reduce your tax bill dollar for dollar. For example, a $40,000 deduction does not mean $40,000 less tax. Its actual value depends on your taxable income and other circumstances.
What is the SALT limit for a 2025 federal return?
For the 2025 tax year, the general SALT limit is $40,000, or $20,000 for married filing separately. If your 2025 MAGI exceeds $500,000, or $250,000 for married filing separately, the Schedule A worksheet reduces the limit by 30% of the excess. The limit cannot be reduced below $10,000, or $5,000 for married filing separately. These are 2025 tax-year amounts; consult the IRS 2025 Schedule A instructions for the worksheet and additional rules, including rules involving Forms 2555 or 4563 and income excluded from Puerto Rico.
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
#1 Best Overall
![H&R Block Tax Software Deluxe + State 2025 Win/Mac [PC/Mac Online Code]](https://m.media-amazon.com/images/I/41ZQoiZKHHL._SL160_.jpg)
- Tax prep made smarter: With AI Tax Assist, you can get real-time expert answers from start to finish.
- Step-by-step Q&A and guidance
- Quickly import your W-2, 1099, 1098, and last year's personal tax return, even from TurboTax and Quicken software
- Itemize deductions with Schedule A
- Accuracy Review checks for issues and assesses your audit risk
The limit is applied to the combined eligible SALT amount, not just to state income tax. If your eligible taxes total more than the limit applicable to you, the excess is not deductible under this Schedule A limit.
How the 2026 limit differs
The following amounts are for the 2026 tax year, not a 2025 federal return. The IRS correction notice lists a $40,400 general limit, or $20,200 for married filing separately; a phase-down threshold of $505,000, or $252,500 for married filing separately; a 30% reduction on MAGI above that threshold; and a floor of $10,000, or $5,000 for married filing separately. See the IRS 2026 Form 1040-ES correction.
Rank #2
![TurboTax Deluxe Desktop Edition 2025, Federal & State Tax Return [Win11/Mac14 Download]](https://m.media-amazon.com/images/I/41Ug1D1e2xL._SL160_.jpg)
- TurboTax Desktop Edition is download software which you install on your computer for use
- Requires Windows 11 or macOS Sonoma or later (Windows 10 not supported)
- Recommended if you own a home, have charitable donations, high medical expenses and need to file both Federal & State Tax Returns
- Includes 5 Federal e-files and 1 State via download. State e-file sold separately. Get U.S.-based technical support (hours may vary).
- Live Tax Advice: Connect with a tax expert and get one-on-one advice and answers as you prepare your return (fee applies)
Which state and local taxes may qualify?
Income taxes and payments
For the Schedule A state-and-local-tax category, you generally choose state and local income taxes or general sales taxes. Eligible income-tax amounts may include withholding, estimated payments made during 2025, and qualifying payments made during 2025 for an earlier tax year, subject to the Schedule A instructions. Do not count withholding again if it was already deducted on a business schedule.
Real estate taxes
Qualifying real estate taxes generally must be imposed on you and paid during the year. The tax must be assessed uniformly at a like rate on real property throughout the community and used for general community or governmental purposes. A charge for a particular service or privilege does not qualify merely because it appears on a local property-tax bill.
Free tools Windows power users keep installed
One-click scans. No signup required.
Rank #3
![H&R Block Tax Software Premium & Business 2025 Win [PC Online code]](https://m.media-amazon.com/images/I/41QUtTaIoiL._SL160_.jpg)
- Premium: Windows 10 or higher and Business: Windows 11
- Tax prep made smarter: With AI Tax Assist, you can get real-time expert answers from start to finish.
- Quickly import your W-2, 1099, 1098, and last year's personal tax return, even from TurboTax and Quicken software
- Five free federal e-files and unlimited federal preparation and printing
- Free e-file included for most business forms
For a 2025 return, the IRS says only taxes paid in 2025 and assessed before 2026 can be deducted. State or local law determines when a tax is assessed. Check the date and nature of the charge on the bill, not just the date the bill arrived. See IRS Publication 530 (2025) and the 2025 Schedule A instructions.
Personal property taxes
An annual tax on personal property may qualify when it is based on the property’s value alone. A flat registration fee or a charge based on weight, age, or another factor is not a value-based tax simply because it is billed with a vehicle fee. The IRS Schedule A instructions describe the requirements.
Rank #4
![TurboTax Home & Business Desktop Edition 2025, Federal & State Tax Return [Win11/Mac14 Download]](https://m.media-amazon.com/images/I/41g5u0+-GVL._SL160_.jpg)
- TurboTax Desktop Edition is download software which you install on your computer for use
- Requires Windows 11 or macOS Sonoma or later (Windows 10 not supported)
- Recommended if you are self-employed, an independent contractor, freelancer, small business owner, sole proprietor, or consultant
- Includes 5 Federal e-files and 1 State via download. State e-file sold separately. Get U.S.-based technical support (hours may vary)
- Live Tax Advice: Connect with a tax expert and get one-on-one advice and answers as you prepare your return (fee applies)
Can you deduct sales tax instead of state income tax?
Yes. If you itemize, you may elect general sales taxes instead of state and local income taxes for this Schedule A category; you cannot claim both as the category choice. The IRS permits either actual eligible expenses or optional sales-tax tables. If you use actual expenses, keep receipts: the IRS states, “You must keep your actual receipts showing general sales taxes paid to use this method.”
In some circumstances, sales tax paid on a home or building materials may qualify. If you deduct those taxes, you cannot also include them in the home’s cost basis. The rules and table method are in the 2025 Schedule A instructions and IRS Publication 530 (2025).
PC Slower Than It Used to Be?
A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11Crashes, No Sound, or Screen Glitches?
Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteBest Value
![TurboTax Business Desktop Edition 2025, Federal Tax Return [Win11 Download]](https://m.media-amazon.com/images/I/41DGgZMFxXL._SL160_.jpg)
- TurboTax Desktop Edition is download software which you install on your computer for use
- Requires Windows 11 or macOS Sonoma or later (Windows 10 not supported)
- Recommended if you have a partnership, own an S or C Corp, Multi-Member LLC, manage a trust or estate, or need to file a separate tax return for your business
- Includes 5 Federal e-files. Business State forms sold separately via download. Get U.S.-based technical support (hours may vary).
- Prepare and file your business or trust taxes with confidence
Should you itemize or take the standard deduction?
Compare your total allowable itemized deductions with the standard deduction for your filing status. The SALT deduction alone does not determine which is larger. For the 2025 tax year, the standard deduction is $31,500 for married filing jointly or qualifying surviving spouse, $23,625 for head of household, and $15,750 for single or married filing separately, according to IRS 2025 tax courseware.
Quick Recap
- Identify your filing status and the tax year of the return.
- Work out eligible SALT amounts, applying the limit and any MAGI reduction for that tax year.
- Add those amounts to your other allowable itemized deductions.
- Compare the itemized total with the standard deduction for your filing status; use the option that gives the larger deduction, subject to applicable filing rules.
What records and dates should you check?
- Keep state and local tax statements, withholding records, and proof of estimated payments or prior-year tax payments made in 2025.
- If claiming actual sales-tax expenses, retain receipts supporting the amounts claimed.
- For property taxes, verify both the payment date and assessment date, as well as whether a billed charge is a tax or a service fee.
- Check that a business-schedule deduction does not duplicate an amount claimed on Schedule A.
- Use the instructions for the tax year being filed; the 2025 and 2026 limits are different.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
