Long Island Business Consulting Firm Addresses NY's New SALT and PTET Rules Press Services

The SALT Torpedo: Why a Higher Deduction Cap Could Still Cost Some New York Owners More

Hauppauge, United States - July 24, 2026 / Heritage Accountants & Advisors /

Hauppauge, NY, July 24, 2026 – Two tax developments are directly affecting Long Island business owners. The first is the $40,000 individual SALT deduction cap under the One Big Beautiful Bill Act (OBBBA). The second is New York's PTET annual election deadline of March 15, which carries no exceptions and no late-filing relief. Financial service consulting firms across New York are helping owners understand how the two rules interact before year-end decisions are made. Heritage Accountants & Advisors has published guidance to help closely held businesses across Long Island prepare for the year-end.

What the New SALT Cap Changes for Business Owners

The OBBBA, signed on July 4, 2025, raised the federal SALT deduction limit from $10,000 to $40,000 for most filers, retroactive to January 1, 2025. The change applies to tax years 2025 through 2029, reverting to $10,000 in 2030.

The higher cap benefits owners who itemize on IRS Schedule A with MAGI below $500,000. Above that, the cap phases down by 30 cents per dollar, reaching $10,000 at approximately $600,000 in MAGI. Tax professionals call this the "SALT torpedo" zone.

Key OBBBA provisions:

The $40,000 cap and $500,000 threshold each increase 1% annually through 2029
The PTET deduction at the entity level is fully preserved
Restrictions previously limiting service businesses (SSTBs) from the PTET workaround were removed

According to the New York State Department of Taxation and Finance, eligible partnerships and S corporations may elect to pay state income tax at the entity level, generating a dollar-for-dollar credit for owners on their New York returns.

How the PTET Election Interacts with the New Cap

For owners with MAGI above $500,000, the PTET remains the primary mechanism for a federal deduction on New York state taxes. For owners below the threshold, both tools are available, and the better outcome depends on income, filing status, and entity structure. This is exactly the type of analysis that financial consulting for businesses in NY is built around.

"Most Long Island owners are still running 2025 tax numbers in their head. The problem is, that's not where March 15 decisions get made. You need current projections for both the SALT cap and PTET to avoid the wrong choice," says Philip Bellissimo, Managing Member, Heritage Accountants & Advisors

What the March 15 PTET Deadline Means for 2027

The PTET election must be made by March 15 through the entity's Business Online Services account. Filing Form 7004 does not extend the PTET window. New York has rejected late elections at every administrative level since 2021. Owners who missed March 15, 2026, should begin 2027 planning in Q4 2026.

Steps for Long Island Business Owners

Financial service consulting firms with current OBBBA and PTET knowledge can help owners evaluate their position before year-end:

Determine whether itemizing on Schedule A beats the standard deduction
Model the SALT phaseout if MAGI is near $500,000
Begin Q4 projections for a timely 2027 PTET election before March 15, 2027

For small business consulting services on Long Island, staying current with the OBBBA and New York's PTET election requirements is now part of standard tax planning practice.

Key Questions About PTET and the SALT Cap

Q: Can an owner use both the $40,000 SALT deduction and PTET in the same year?

A: Yes. The OBBBA preserves the PTET deduction. Whether combining both is beneficial depends on income and entity structure.

Q: Does the SALT cap apply to property taxes paid by the business?

A: No. Property taxes paid by a business entity are deductible as a business expense and fall outside the individual SALT cap.

Q: Should the PTET election be reassessed each year as income changes?

A: Yes. Owners near the $500,000 threshold benefit from projections before each March 15 deadline.

About Heritage Accountants & Advisors

Heritage Accountants & Advisors is a boutique CPA firm serving closely held businesses across Long Island and the New York Metro area from offices in Hauppauge and Southampton. Created through the January 2025 merger of two preeminent Long Island firms, BSB Associates and Ferrera, DeStefano & Caporusso, Heritage combines four decades of tax expertise with a practice model centered on financial clarity and long-term partnership. The firm provides tax preparation, operational guidance, audit representation, and business consulting services. Heritage holds membership in the AICPA and the New York Society of CPAs.

Disclaimer: This information is for educational purposes only and does not constitute professional tax, legal, or financial advice. Please consult with a qualified tax advisor regarding your specific tax situation.