Under Public Law 119-21 (OBBBA § 70120), the 2026 individual Schedule A SALT deduction cap rose to $40,000 ($20,000 MFS) but phases down by 30% of MAGI above $500,000 back to a $10,000 floor at $600,000 MAGI. Meanwhile, IRS Notice 2020-75 remains in full force, allowing S-Corporations (Form 1120-S) and Partnerships / Multi-Member LLCs (Form 1065) to deduct state income taxes at the entity level with zero SALT cap while preserving the $32,200 MFJ Standard Deduction. Compare both options below and download a signed 2026 Shareholder/Partner PTET Election Consent Resolution PDF.
| State Tax on Pass-Through Income | $18,865 |
| Total Personal SALT Paid (State + Property Tax) | $34,865 |
| 2026 Allowed SALT Cap After $500k Phase-Out | $28,000 |
| Disallowed SALT Lost to Cap / Standard Ded | $6,865 |
| Total Allowed Schedule A / Standard Deduction | $46,000 |
| Entity-Level State PTET Deducted Above-the-Line | $18,865 |
| Remaining Personal Schedule A / Standard Ded | $34,000 |
| Total Combined Federal Deductions (PTET + Personal) | $52,865 |
| State Credit Hair-Cut Cost (If <100% Credit State) | $0 (100% Credit) |
| Net Annual Federal Tax Saved by PTET Election | $2,403 / yr |
Mandatory Election Deadline: Return Due Date (Mar 15 / Ext). Deducting PTET on Form 1120-S / 1065 also lowers AGI out of the $500k-$600k SALT Torpedo zone.
Compare personal Schedule A itemizing against entity-level PTET across all 36 PTET states and download a signed Board/Partner Consent PDF.
Generate your state-specific Q1-Q4 PTET estimated tax voucher calendar and avoid fatal June 15 / March 15 election forfeiture.
Calculate how the 30% SALT cap phase-down between $500,000 and $600,000 MAGI spikes effective marginal tax rates to 45.5% and how PTET cures it.