OBBBA Section 70120 · $505k-$606k MAGI Phase-Down

2026 $505k-$606k MAGI SALT Phase-Out Calculator

See how much of your $40,400 SALT cap is lost above $505,000 MAGI and how a state PTET election eliminates the penalty.

30% SALT Phase-DownLoses $3,000 of SALT cap for every $10,000 of MAGI over $505,000.
45.5% Effective Tax RateEach extra dollar inside the $505k-$606k zone is taxed at 1.3x.
PTET & 401(k) EscapeEntity PTET payments bypass Schedule A and lower your K-1 MAGI.
2026 Household MAGI, State/Property Taxes Paid & Above-the-Line MAGI Reduction
Models the 30% SALT phase-down under OBBBA § 70120

Before PTET / Retirement MAGI Reduction

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 Zone45.5% (35% + 10.5%)

After Shifting State Tax to Entity PTET + 401(k)

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