Property Tax Deduction In California
The federal state and local tax deduction, commonly called SALT, allows homeowners to deduct up to $10,000 in combined state income taxes and property taxes paid when they itemize on Schedule A. For California homeowners, who often face some of the highest property tax bills in the country, this $10,000 cap frequently limits the full federal benefit that would otherwise be available.
California does not allow a deduction for property taxes on the state income tax return. The state conforms to federal adjusted gross income but does not adopt the federal Schedule A itemized deductions, so property tax relief at the state level comes through programs like the Homeowners Exemption and the Proposition 13 assessment limits rather than an income tax deduction.
California homeowners should document property tax payments with county tax bills and payment receipts to support the federal SALT deduction. Those who pay supplemental property taxes following a home purchase or reassessment should also retain those bills, as those payments count toward the $10,000 federal cap in the year they are paid.