The 2025 SALT deduction cap is not working properly yet 01.23.2026

[17691094736]

My 20205 itemized deductions are greater than the standard deduction, yet the standard deduction is used in TurboTax online as of 01.23.2026 When will this be fixed?

[MarilynG1]

Are you taking the SALT deduction caps into consideration, and not just totaling your itemized deductions?  If you're using TurboTax Desktop look at Schedule A in FORMS to review the calculations.

In TurboTax Online, in the left-side menu choose Tax Tools > Tools > View Tax Summary.  Back at the left-side menu, choose 'Preview My 1040'.

You can also switch from Standard to Itemized in the Program.  Here's How to Switch from Standard to Itemized Deductions.

Here's detailed info on SALT Deductions.

@17691094736 

[engineblockeggs]

I agree, this is busted. The AGI I have is no where near where it needs to be for the $10K cap, but that's what turbotax says, and yes I'm doing itemized deductions. 

[RogerD1]

The State And Local Tax deduction is reduced if your modified adjusted gross income (MAGI) is greater than $500,000 ($250,000 for married filing separately).  The cap for 2025 was raised to $40,000 in the One Big Beautiful Bill and is working as it should in TurboTax.  If the total of your state and local taxes is under the limit and other itemized deductions are minimal, it is likely that the standard deduction will be more beneficial to you than itemizing.

{Edited 2/18/26}

@engineblockeggs 

[wufkar07]

I agree - this is not working properly.

in the Deductions section I can see the State and Local Income Tax with the correct amount - however the software defaults to the lesser sales tax even if I click the check box saying I want to use the SALT amount.

After reviewing the "Show me the estimated summary" it appears the math is working even if the glitch is occurring on the deductions summary page. 

How incredibly frustrating. 

[PatriciaV]

It would be helpful to have a TurboTax ".tax2025" file that is experiencing this issue for further investigation.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, please follow these instructions: 

In TurboTax Online, open your return, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools.
2. A window will pop up which says Tools Center.
3. On this screen, select Share my file with Agent.
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
5. You may wish to snap a screenshot to post instead of the actual number.
6. Reply to this thread with your Token number (including the dash) and tag (@) the Expert requesting the token from you.
7. Please include any States that are part of your return - this is VERY important.

If you are using TurboTax for Desktop, go to Online in the top menu, then choose "Send Tax File to Agent."

We will then be able to see the same experience you are having. If we are able to determine the cause, we'll reply here and possibly provide you with a resolution. 

@wufkar07 

@17691094736 

[17691094736]

I'm referring to 2025 Minnesota State Personal Income Tax calculations. Generally, only affecting persons with significant taxable income and significant real estate taxes.  TurboTax suggests the not all state modifications have been programed as of 02.23.2026. 

[aematkin]

Actually Turbo Tax is still using the old SALT rule in my desktop software.  It is reducing my state and local taxes down to $10,000 and I have paid over $65,000.  I should be at least getting $40,000. I'm a CPA btw

[DawnC]

Is your desktop software updated?  @aematkin All versions of TurboTax desktop have been updated to reflect the 2025 federal SALT changes.   

The overall limit on the deduction for state and local income, sales, and property taxes has increased to $40,000 ($20,000 if married filing separately). The overall limit is reduced if your modified adjusted gross income is more than $500,000 ($250,000 if married filing separately) but will not be reduced below $10,000 ($5,000 if married filing separately).   IRS Schedule A instructions

[VolvoGirl]

Are you on Windows or Mac?   

If your program says it's up to date or you can't update it then try the Manual Update for Windows

https://ttlc.intuit.com/community/updating/help/manually-update-turbotax-for-windows-software-basic-...

Also try updating Windows OS.

Starting at $500,000 ($250,000 if married filing separately) of modified AGI the SALT deduction phases down and is fully down to $10,000 at $600,000 ($300,000 if married filing separately) of MAGI.

[aematkin]

Yes I updated the software and ran it again and the same outcome. Ridiculous. Now on hold with Intuit for 45 minutes 

[DoninGA]

@aematkin Are you referring to the Federal Schedule A for the SALT limitation or is this an issue with a state tax return?

[DawnC]

Is your modified adjusted gross income in the phaseout range or higher?    If so, the deduction amount is reduced.   @aematkin 

The overall limit on the deduction for state and local income, sales, and property taxes has increased to $40,000 ($20,000 if married filing separately). The overall limit is reduced if your modified adjusted gross income is more than $500,000 ($250,000 if married filing separately) but will not be reduced below $10,000 ($5,000 if married filing separately).   IRS Schedule A instructions