One Big Beautiful Bill (OB3) State And Local Tax (SALT) Deduction changes

This change applies to tax years 2025-2029.

No changes to pass-through entity tax deduction for partnerships and S-Corps.  The pass-through entity tax deduction is allowed through 2029.  This applies, for the most part to states that have a state income tax.  It seldom matters to Florida residents.

The maximum SALT deduction for Single, HOH, and Married Filing Joint (MFJ) are all the same at $40K in 2025 and indexed for inflation each year thereafter through 2029.

The SALT deduction for MFS is half of the others at $20K.

The new SALT deduction of $40K, has a phaseout down to $10K.  It cannot go below $10K, regardless of filing status or income.

The phasedown window is $500K-600K, indexed for inflation for years 2026-2029. You reach the $10K deduction floor once MAGI exceeds $590K.