The limit on the itemized deduction for state and local taxes. It rose from $10,000 to $40,000 for 2025, increases 1 percent a year through 2029, and is scheduled to fall back to $10,000 in 2030. It phases down for incomes above $500,000.
For Illinois homeowners with high property tax and income tax, the higher cap makes itemizing worthwhile again for many who took the standard deduction since 2018. It also changes the math on the Illinois pass-through entity election.
It phases down for modified AGI above $500,000 ($250,000 married filing separately), bottoming at $10,000. High earners keep the old cap.
Source: IRC 164(b)(6) as amended by Public Law 119-21
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
A confidential consultation. Tell us what you have, and we will tell you what applies and what it costs.
Hourly billing, estimated up front, with a deposit applied to the work.
Fill this out and we will reach out to schedule your consultation.
