If you pay significant state income taxes or property taxes, a change in federal tax law probably made you plenty happy with 2025 taxes and your luck will hold out until 2029.
The State and Local Tax (SALT) deduction allows you to deduct those payments from your federal taxable income, but since 2018, that deduction had been capped at $10,000, which many homeowners quickly maxed out. The One Big Beautiful Bill, signed in July 2025, raised that cap to $40,000 for 2026 (with small annual increases through 2029). That is four times the previous limit.
The biggest beneficiaries are homeowners in states with high property taxes or high state income taxes, where the old $10,000 cap left a lot of deductible money on the table.
One catch: the higher cap phases out for incomes above $500,000. And in 2030, the cap reverts to $10,000 unless Congress acts again. A tax professional can tell you whether itemizing makes sense for your situation.
