PTETaxDesk / 2026 State PTET & $40k SALT Guides / Texas (TX) 2026 PTET Election vs. $40,000 SALT Cap Calculator & Deadlines
Texas (TX) 2026 PTET Election vs. $40,000 SALT Cap Calculator & Deadlines
How does Texas PTET work with the $40,000 SALT cap in 2026?
For the 2026 tax year in Texas (TX), S-Corporations and Partnerships can evaluate No Individual Income Tax (Texas Franchise Tax $2.47M Exclusion) (Entity Deduction, deadline: May 15) against the new $40,000 individual Schedule A SALT deduction cap (which phases down by 30% between $500,000 and $600,000 MAGI under Public Law 119-21 § 70120).
For the 2026 tax year in Texas (TX), S-Corporations and Partnerships can evaluate No Individual Income Tax (Texas Franchise Tax $2.47M Exclusion) (Entity Deduction, deadline: May 15) against the new $40,000 individual Schedule A SALT deduction cap (which phases down by 30% between $500,000 and $600,000 MAGI under Public Law 119-21 § 70120).
Open Texas 2026 PTET vs. $40k SALT Calculator
2026 Texas (TX) Pass-Through Entity Tax (PTET) Statutory Matrix
| PTET Parameter | 2026 Texas (TX) Rule |
|---|---|
| State PTET Rate & Statute | No Individual Income Tax (Texas Franchise Tax $2.47M Exclusion) |
| Owner Credit / Exclusion Mechanism | Entity Deduction |
| Mandatory Election / Payment Deadline | May 15 |
| 2026 Federal Individual SALT Cap | $40,000 (Phases down to $10,000 between $500k & $600k MAGI) |
| IRS Notice 2020-75 Entity Deduction | 100% Above-the-Line Deduction on Form 1065 / Form 1120-S |
Frequently Asked Questions
Should I elect Texas PTET in 2026 now that the federal SALT cap is $40,000?
Yes, in most cases where Texas state income tax plus personal property tax exceeds $40,000, where household MAGI exceeds $500,000 (triggering the 30% SALT phase-down torpedo), or where taking the $32,200 MFJ standard deduction while deducting Texas PTET at the entity level produces a larger combined federal deduction.
What is the 2026 Texas PTET election deadline?
In Texas, the statutory election / payment rule is: May 15. Cash-basis entities must remit PTET payments by December 31, 2026 to claim the federal deduction on the 2026 return.