Under Public Law 119-21 (§ 70120), every $1,000 of Modified Adjusted Gross Income (MAGI) above $500,000 ($250,000 MFS) destroys $300 of your $40,000 SALT cap until it hits the $10,000 floor at $600,000 MAGI. For a taxpayer in the 35% federal bracket, losing $30,000 of SALT deduction over a $100,000 income band adds an extra +10.5% stealth surtax (a 45.5% effective federal marginal rate).
| Pre-Strategy MAGI | $575,000 |
| 30% SALT Cap Phase-Down Penalty | -$22,500 |
| Remaining Allowed Schedule A SALT Cap | $17,500 |
| Effective Marginal Federal Rate in Torpedo Zone | 45.5% (35% + 10.5%) |
| Post-PTET Reduced MAGI | $547,000 |
| Restored Personal Schedule A SALT Cap | $25,900 |
| Total Deductions Unlocked (PTET + Restored SALT) | $24,400 |
| Total Federal Tax Saved From Escaping Torpedo | $8,540 / yr |