From $10K to $40K: OBBA’s Big SALT Deduction Boost

Salt

• OBBA and the SALT Cap Boost

  
  

  One of the standout provisions of the One Big Beautiful Act (OBBA) is the change to the State and Local Tax (SALT) deduction cap.

  Under prior law, taxpayers could only deduct up to $10,000 in state and local taxes. OBBA temporarily boosts that cap to $40,000 starting in 2025, giving relief to many households in high-tax states.

  But here’s the catch: the cap doesn’t stay that high forever. Starting in 2026, it begins to phase down gradually until it returns to $10,000 by 2030. High-income earners may also see a faster phaseout.

  Why it matters:

  • Bigger SALT deduction = lower federal taxable income for many families.

  • The window of higher caps is limited, so planning ahead can maximize the benefit.

  Bottom line: OBBA’s SALT cap boost gives taxpayers a temporary break, but it’s not permanent. If you’re in a high-tax state, this change could mean thousands in savings — at least for a few years.