Can I do anything withthe "Unused" amount above the $10,000 cap per SALT?

[Kipmc7]

This question is about the $10,000 limit on the deduction for State income tax plus property tax. I got this off the internet:

"The state and local tax (SALT) deduction is for taxpayers who itemize their deductions to reduce their federally taxable income. Those taxpayers can deduct up to $10,000 of property, sales, or income taxes they have already paid to state and local governments when electing the SALT deduction. This limit, known as the SALT “cap,” applies to tax years 2018 to 2025 and is set to expire after 2025"

My question is can I do anything about the amount that I could not deduct? Can I use in in later years? For 2023 the total for SALT was $11,169 leaving $1,169 that I could not deduct. for 2024 I expect that I will have $23,423 combined leaving $13,423 that I can not deduct.  Can I do anything with that? Will it roll over to later years?

Thank you

[xmasbaby0 · Accepted solution]

No, you cannot do anything with the amount that is over the $10K cap for a deduction for SALT.   Sorry.   No, it will not carry over to later years.   That's the idea of a limit.  

[Kipmc7]

I think that there is some calculation that if you could not take the deduction for the state tax payment, than any refund is not considered income. Is that right?  Can you show an example?

[SteamTrain]

IF you had (say) $15,000 of property taxes for 2023....then you could only use $10,000 due to SALT.

Two examples:

1) Then if you had a $6000 refund from the state for 2023 taxes, then the $5000 you couldn't use for Feds for 2023, wipes $5000 out of the state refund as being Federally taxable for 2024, with the remaining $1000 State refund being Fed taxable for 2024

2)  OR...If you got a $3000 refund from the state for 2023, then the $5000 you couldn't use for Feds for 2023, wipes out any of the state refund as being taxable for 2024.

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The TTX software has handled this properly for me in the past couple years...when I was over the SALT limit for the prior year  (and was using itemized deductions the prior year)