South Dakota · State and Local Tax (SALT) Deduction
State and Local Tax (SALT) Deduction in South Dakota (2026)
Deduct combined state income taxes (or sales taxes) and local property taxes up to the 2026 SALT limit. South Dakota has no state income tax, so a South Dakota filer's combined marginal rate on the next dollar at $65,964 of income is about 12% (12% federal).
2026 savings example for South Dakota
Planning estimate for a single filer earning $65,964 (South Dakota median household income in LevyIO's state dataset) who removes $5,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; SD tax uses the state brackets in LevyIO's dataset.
Estimated total savings
$600
Federal savings
$600
$5,736 → $5,136 · 12% bracket
SD state savings
$0
No state income tax
Combined marginal rate
12%
≈ $120 saved per $1,000 deducted
Statutory maximum for this item in LevyIO's dataset: $40,400.
Federal × South Dakota marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The SD column is the state marginal rate at the midpoint of each range (South Dakota has no income tax). The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | SD marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 0% | 10% | $100 |
| 12% | $28,500 - $66,500 | 0% | 12% | $120 |
| 22% | $66,500 - $121,800 | 0% | 22% | $220 |
| 24% | $121,800 - $217,875 | 0% | 24% | $240 |
| 32% | $217,875 - $272,325 | 0% | 32% | $320 |
| 35% | $272,325 - $656,700 | 0% | 35% | $350 |
| 37% | Over $656,700 | 0% | 37% | $370 |
Eligibility & forms
Taxpayers who pay state income, sales, or property taxes
- Must itemize
- State/local income OR sales tax
- Property taxes on real estate
- $40,400 combined cap for most filers ($20,200 MFS)
Federal forms: Schedule A
South Dakota filing notes
No income or corporate tax. Trust-friendly laws benefit estate planning. Sales tax at 6.4% is moderate.
Common mistakes: Exceeding the SALT cap; Including foreign taxes here.
Frequently asked questions
How much can the State and Local Tax (SALT) Deduction save a South Dakota taxpayer in 2026?
In LevyIO's example, a single filer with $65,964 of income (the South Dakota median household income in our state dataset) who removes $5,000 from taxable income saves about $600 in 2026 federal tax (12% marginal bracket) and nothing at the state level because South Dakota does not tax wage income. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's SD bracket data, not a survey figure.
What is the South Dakota income tax rate for 2026?
South Dakota has no state income tax. The SD standard deduction in LevyIO's dataset is $0 single / $0 married. No income or corporate tax. Popular for trusts. Moderate property taxes.
Who qualifies for the State and Local Tax (SALT) Deduction in South Dakota?
Taxpayers who pay state income, sales, or property taxes. The federal rules are the same in every state; the requirements are: Must itemize; State/local income OR sales tax; Property taxes on real estate; $40,400 combined cap for most filers ($20,200 MFS). South Dakota filers should confirm on the SD return whether the state follows the federal treatment.
Which forms do I file to claim the State and Local Tax (SALT) Deduction?
Federal: Schedule A. South Dakota has no individual income tax return for wage income, so there is no state form to file for this item. Common mistakes: Exceeding the SALT cap; Including foreign taxes here.
State and Local Tax (SALT) Deduction in other states
- Full State and Local Tax (SALT) Deduction guide (all states)
- State and Local Tax (SALT) Deduction in North Dakota
- State and Local Tax (SALT) Deduction in Alabama
- State and Local Tax (SALT) Deduction in Arkansas
- State and Local Tax (SALT) Deduction in California
- State and Local Tax (SALT) Deduction in Georgia
More South Dakota deductions and credits
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.