PTETaxDesk / 2026 State PTET & $40k SALT Guides / Married Filing Separately $20,000 SALT Cap ($250k Phase-Out) vs. State PTET in 2026
Married Filing Separately $20,000 SALT Cap ($250k Phase-Out) vs. State PTET in 2026
Married Filing Separately $20,000 SALT Cap ($250k Phase-Out) vs. State PTET in 2026?
Under Public Law 119-21 (§ 70120), Married Filing Separately taxpayers receive only a $20,000 SALT cap that phases down at $250,000 MAGI to a $5,000 floor, making entity-level PTET essential for high-earning MFS pass-through owners.
Under Public Law 119-21 (§ 70120), Married Filing Separately taxpayers receive only a $20,000 SALT cap that phases down at $250,000 MAGI to a $5,000 floor, making entity-level PTET essential for high-earning MFS pass-through owners.
Open 2026 $40,000 SALT Cap vs. State PTET Calculator
2026 PTET & SALT Compliance Checklist
- Adopt a Written Partner/Shareholder PTET Consent Resolution: Keep signed authorization in your corporate or partnership minute book.
- Remit Cash-Basis Vouchers Before December 31, 2026: Under IRS Notice 2020-75, cash-basis entities can deduct 2026 PTET only to the extent paid by December 31, 2026.
- Avoid Overpayment Refunds (IRC § 111): Base your Q4 PTET payment on actual projected 2026 state liability so next year's state refund isn't recaptured as ordinary federal income.
Frequently Asked Questions
Married Filing Separately $20,000 SALT Cap ($250k Phase-Out) vs. State PTET in 2026?
Under Public Law 119-21 (§ 70120), Married Filing Separately taxpayers receive only a $20,000 SALT cap that phases down at $250,000 MAGI to a $5,000 floor, making entity-level PTET essential for high-earning MFS pass-through owners.