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At an Oct. 9 rally in Syracuse, New York, President Trump took credit for a tax change that matters a lot in high-tax states. “We gave you SALT deduction back saving the typical New York family over $7,000,” he told the crowd. (1)
SALT is the deduction for state and local taxes. For 2026, the limit on that deduction is $40,400, and it shrinks once modified adjusted gross income tops $505,000, though not below $10,000. (2)
Before the new tax law, the limit was $10,000. (3)
I’ve been a CPA since 1981, so let me referee this one. Trump is right that this is a real tax cut for some New Yorkers. But “typical”? That’s where the claim runs into the math.
You only get the SALT deduction if you itemize. In 2022, the latest year in one IRS report, just 9.5% of returns itemized, while 88.6% claimed the standard deduction. (4) And for 2026, the standard deduction for a married couple is $32,200. (5)
So who really gets $7,000, and who gets nothing? Here are 5 things to know.
1. If you don’t itemize, the bigger SALT deduction is worth $0
Here’s a made-up example. A retired New York couple with a paid-off house pays $9,000 in property tax and $5,000 in state income tax, and gives $3,000 to charity.
That’s $17,000 of itemized deductions, far below the $32,200 standard deduction. (5) They took the standard deduction under the old law, and they’ll take it under the new one. For them, the bigger SALT limit changes nothing.
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2. $7,000 takes a high income and a big tax bill
The limit went from $10,000 to $40,400. So the most extra you can deduct is $30,400, and only if you already itemize, pay at least $40,400 a year in state and local taxes and have modified adjusted gross income of $505,000 or less. (2)(3)
Now run that through the 2026 tax brackets. For married couples, the 22% bracket starts above $100,800 of taxable income, and the 24% bracket starts above $211,400. (5)
By my math, $30,400 of extra deductions saves at most $6,688 in the 22% bracket, at most $7,296 in the 24% bracket and at most $9,728 in the 32% bracket, which starts above $403,550 of taxable income for married couples. (5)
In other words, saving “over $7,000” takes taxable income above $211,400 and state and local taxes of at least about $32,000 to $40,000 a year. That’s a well-off family, not a typical one. The transcript doesn’t show where Trump’s $7,000 figure comes from. (1)
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3. Working homeowners with a mortgage get something, just not $7,000
Take a made-up working couple under 65 who pay $25,000 a year in property and state income taxes, $12,000 in mortgage interest and give $5,000 to charity.
Under the old $10,000 limit, their itemized deductions came to $27,000, less than the standard deduction, so they didn’t itemize. Under the new limit, they total $42,000. (2)(5)
That’s $9,800 more than the standard deduction. In the 22% bracket, it’s worth about $2,156 a year. Real money, but well short of $7,000.
4. For retirees, the senior deduction is the bigger deal
The same law added an extra $6,000 deduction for people 65 and older, for 2025 through 2028. It phases out for modified adjusted gross income over $75,000 ($150,000 for joint filers). (6)
Here’s the key difference: You get it whether you itemize or not. (6) If you’re married and both 65 or older, each of you can claim it. (6) In the 12% bracket, $12,000 of deductions is worth up to $1,440 a year.
Figuring out which breaks you qualify for, and whether to itemize, can change from year to year. If the numbers are significant, it can pay to have a professional look at the whole picture.
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5. Don’t build a budget on either break lasting
The higher SALT limit reverts to $10,000 in 2030, CNBC reported when the law passed. (3) And the senior deduction runs only through 2028. (6)
So plan your taxes one year at a time. A tax cut that’s scheduled to shrink isn’t one to count on for the rest of your retirement.
My honest take
Give Trump his due: if you live in a high-tax state, own an expensive home and itemize, the bigger SALT deduction is a genuine tax cut. Some families will save thousands.
But most people don’t itemize, and many retirees with a paid-off house won’t see a dime from it. For them, the senior deduction is the break that counts.
So before you believe any politician’s number, look at last year’s return and see whether you itemized. If you didn’t, the SALT fight isn’t about your money.
Sources: 1. Roll Call Factba.se; 2. Internal Revenue Service; 3. CNBC; 4. IRS Statistics of Income; 5. Internal Revenue Service; 6. Internal Revenue Service
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