The SALT cap — OBBB era and the 2030 sunset

The current cap regime (2026–2029)

For tax years 2026 through 2029, the SALT cap is $40,400 per return (single, MFJ, or HoH — same number; MFS is half). That's a significant uplift from $10,000 — enough to fully cover state-tax bills for many upper-middle-class filers in high-tax states.

But there's a phase-out:

• Phase-out start: $500,000 MAGI
• Phase-out floor: $10,000 (cap can't go below this)
• Reduction rate: $1 of cap reduction per $30 of MAGI over $500k

Worked example: MFJ filer, MAGI = $800,000. Excess over $500k = $300,000. Cap reduction = $300,000 ÷ 30 = $10,000. Effective cap = $40,400 − $10,000 = $30,400.

A high-income filer can phase all the way down to the $10,000 floor, but never below.

The 2030 sunset

Unless Congress acts, the OBBB SALT regime expires after 2029. Starting in 2030, the cap reverts to $10,000, with no phase-out (everyone gets the same flat $10k cap regardless of income).

This is a hard cliff. A filer who deducted $40,400 in 2029 will only deduct $10,000 in 2030 — a $30,400 swing in deductible expenses. For HCOL filers, that's often a $7,000–$10,000 jump in federal tax owed in a single year.

Itemize vs standard

You only get any SALT benefit if you itemize. The 2026 standard deduction is ~$15,000 single / ~$30,000 MFJ. A filer needs SALT + mortgage interest + charity + medical (over the AGI floor) to clear standard deduction before itemizing pays off.

Common pattern in HCOL states under OBBB:

• $40,400 SALT
• $15,000 mortgage interest
• $5,000 charity
• = $60,400 itemized
• vs $30,000 standard
• = $30,400 itemizable benefit (worth ~$7,500 at 24% marginal)

Same filer post-2030:

• $10,000 SALT
• $15,000 mortgage interest
• $5,000 charity
• = $30,000 itemized
• vs $30,000 standard
• = roughly even — itemizing barely beats standard

The OBBB regime is the only window where itemizing beats standard for many HCOL filers. After 2030, mortgage interest + charity have to do the heavy lifting alone.

Planning levers

Bunching charitable giving. If you're near the itemize/standard-deduction line, give two years' worth of charity in one year (e.g., via a Donor Advised Fund), itemize big in that year, take the standard deduction the next. Average annual deduction is the same; tax benefit can be higher.

Pre-paying property tax (if your state allows). Some states permit December pre-payment of January property tax bills. Doing so in a high-income year (when your SALT cap isn't fully used) shifts the deduction earlier.

Pass-through entity SALT workaround. Most states allow pass-through businesses (S-corp, partnership) to elect to pay state tax at the entity level. The entity-level state tax is fully deductible federally as a business expense, bypassing the SALT cap. This only helps active business owners — W-2 filers can't use it.

State move. If you're considering relocating from a high-tax to a low-tax state, the SALT cap shrinks the federal-tax cost of staying. The 2030 sunset shrinks it further.

Where Horizons handles it

The /taxes page applies the right SALT cap and phase-out for whatever calendar year the engine is computing. The federal-breakdown row "Income tax (ordinary)" already reflects whether SALT was capped. The "Itemized vs standard" Level-2 drill-down tells you which path the engine took.

Toggle the scenario picker between current_law and alt_2030_default (the OBBB-sunset preview) to see how your tax bill changes if Congress doesn't extend the cap. For HCOL filers, the gap is usually significant.