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Itemized Deductions - Taxes Paid 2021

Limit on Taxes Paid

The itemized deduction for state and local taxes paid is limited to $10,000 ($5,000 MFS).

State and Local Income or General Sales Taxes

A taxpayer can elect to deduct either state and local sales taxes or state and local income taxes, but not both.

State and Local Income Taxes

Includes the following:

  •  Withholding reported on Forms W-2, W-2G, 1099-G, 1099-R, 1099-MISC, and 1099-NEC.
  •  Taxes paid for a prior year, such as the balance due paid when filing the state income tax return or a balance due when amending a prior year state income tax return.
  •  State and local estimated tax payments made during 2021, including the prior year refund credited to 2021, and prior year estimated payments made during 2021.

Example: The fourth quarter 2020 estimate paid in January 2021.

  •  Mandatory contributions made to the California, New Jersey, or New York Nonoccupational Disability Funds, the Rhode Island Temporary Disability Benefit Fund, the New Jersey, Pennsylvania, or Alaska Unemployment Compensation Funds, the Washington State Supplemental Workmenโ€™s Compensation Fund, or state family leave programs.

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