The cap, year by year
Above the income threshold, the cap is reduced by 30% of the excess, but never below $10,000 ($5,000 married filing separately). Some sources, including the IRS reminder on the 2026 Form 1040-ES, still print $40,000 and $500,000 for 2026; the statute sets $40,400 and $505,000.
| Tax year | Cap | Income where the cap starts shrinking |
|---|---|---|
| 2025 | $40,000 ($20,000 married filing separately) | $500,000 MAGI ($250,000 MFS) |
| 2026 | $40,400 | $505,000 MAGI |
| 2027 to 2029 | 101% of the prior year's cap | 101% of the prior year's threshold |
| 2030 on | $10,000 | Not applicable |
Federal versus Massachusetts
The SALT cap is purely a federal matter. Massachusetts does not allow federal Schedule A deductions at all and has no standard deduction; it uses personal exemptions and its own list of deductions. TIR 26-4 confirms Massachusetts does not conform to the SALT change.
| Federal | Massachusetts | |
|---|---|---|
| Property tax on your home | Itemized deduction within the SALT cap | Not deductible; may count toward the senior circuit breaker credit if 65 or older |
| Massachusetts income tax paid | Itemized deduction within the SALT cap | Not deductible |
| Standard deduction | $15,750 single / $31,500 joint for 2025 | None; personal exemptions instead |
Why itemizing may be back for Massachusetts homeowners
From 2018 to 2024, the $10,000 cap meant that a Massachusetts homeowner's property tax and state income tax often hit the limit, and the standard deduction won. With a $40,000 cap, the same household may be able to deduct its full property tax and state income tax, and once mortgage interest and charitable gifts are added, itemizing can beat the $31,500 joint standard deduction for 2025.
It will not change the answer for everyone. Households without a mortgage, or with modest property tax, may still do better with the standard deduction. The only way to know is to add it up.
Illustrative example for 2025. A married couple in Sharon with $300,000 of income pay $11,000 in property tax and about $14,000 in Massachusetts income tax, plus $12,000 of mortgage interest and $3,000 to charity. Under the old $10,000 cap, itemized deductions would total $25,000, below the $31,500 standard deduction. Under the $40,000 cap, they total $40,000, so itemizing saves tax on an extra $8,500 of income.
Watch for the high-income phase-down
The cap shrinks by 30% of modified adjusted gross income over $500,000 for 2025. At $600,000 of MAGI, the reduction is $30,000, taking the cap down to $10,000. So the larger cap is mostly a benefit for households between roughly $100,000 and $600,000 of income with meaningful property and state taxes.
For 2026, there is also a new overall limit on itemized deductions for taxpayers in the top bracket: deductions are reduced by 5.4% of the lesser of total itemized deductions or the amount taxable income exceeds $768,700 (joint) or $640,600 (single and head of household).
- Check MAGI against $500,000 (2025) or $505,000 (2026)
- Add property tax and Massachusetts income tax paid during the year
- Add mortgage interest and charitable gifts
- Compare the total with the standard deduction for your filing status
- For 2026 and later, also apply the 0.5% charitable floor if you itemize
Where we come in
We compare itemizing with the standard deduction on every federal return we prepare, and keep the Massachusetts return on its own rules. Before we start, we give you a scope and a price in writing.
Figures on this page were checked against the IRS and Massachusetts sources listed alongside on 28 Sep 2026. They change — confirm the current amount before relying on one.
General information for owner-led businesses, not advice for your specific situation. Tax and accounting rules change, and how they apply depends on facts particular to your business. Talk to us — or to another qualified professional — before acting on anything here.
