U.S. Code » Title 26 » Subtitle Subtitle A— Income Taxes › Chapter CHAPTER 1— NORMAL TAXES AND SURTAXES › Subchapter Subchapter B— Computation of Taxable Income › Part PART I— DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC.

26 U.S.C. § 68

Overall limitation on itemized deductions

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(a) In generalIn the case of an individual, the amount of the itemized deductions otherwise allowable for the taxable year (determined without regard to this section) shall be reduced by 2⁄37 of the lesser of—(1) such amount of itemized deductions, or(2) so much of the taxable income of the taxpayer for the taxable year (determined without regard to this section and increased by such amount of itemized deductions) as exceeds the dollar amount at which the 37 percent rate bracket under section 1 begins with respect to the taxpayer.(b) Coordination with other limitations

This section shall be applied after the application of any other limitation on the allowance of any itemized deduction.

(Added Pub. L. 101–508, title XI, § 11103(a), Nov. 5, 1990, 104 Stat. 1388–406; amended Pub. L. 103–66, title XIII, §§ 13201(b)(3)(E), 13204, Aug. 10, 1993, 107 Stat. 459, 462; Pub. L. 105–277, div. J, title IV, § 4004(b)(2), Oct. 21, 1998, 112 Stat. 2681–911; Pub. L. 107–16, title I, § 103(a), June 7, 2001, 115 Stat. 44; Pub. L. 112–240, title I, § 101(b)(2)(A), Jan. 2, 2013, 126 Stat. 2316; Pub. L. 115–97, title I, §§ 11002(d)(2), 11046(a), Dec. 22, 2017, 131 Stat. 2061, 2088; Pub. L. 115–141, div. U, title IV, § 401(a)(33), Mar. 23, 2018, 132 Stat. 1186; Pub. L. 119–21, title VII, § 70111(a), July 4, 2025, 139 Stat. 164.)Inflation Adjusted Items for Certain Years

For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.

Editorial NotesAmendments

2025—Pub. L. 119–21 amended section generally. Prior to amendment, section consisted of subsecs. (a) to (f) relating, respectively, to general rule, applicable amount, exception for certain itemized deductions, coordination with other limitations, exception for estates and trusts, and this section not applying to any taxable year beginning after Dec. 31, 2017, and before Jan. 1, 2026.

2018—Subsec. (b)(2). Pub. L. 115–141 substituted “shall be” for “shall be shall be” in introductory provisions.

2017—Subsec. (b)(2)(B). Pub. L. 115–97, § 11002(d)(2), substituted “1(f)(3)(A)(ii)” for “1(f)(3)(B)” and “2016” for “1992”.

Subsec. (f). Pub. L. 115–97, § 11046(a), added subsec. (f).

2013—Subsec. (b). Pub. L. 112–240, § 101(b)(2)(A)(i), added subsec. (b) and struck out former subsec. (b). Prior to amendment, text read as follows:

“(1) In general.—For purposes of this section, the term ‘applicable amount’ means $100,000 ($50,000 in the case of a separate return by a married individual within the meaning of section 7703).

“(2) Inflation adjustments.—In the case of any taxable year beginning in a calendar year after 1991, each dollar amount contained in paragraph (1) shall be increased by an amount equal to—

“(A) such dollar amount, multiplied by

“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting ‘calendar year 1990’ for ‘calendar year 1992’ in subparagraph (B) thereof.”

Subsecs. (f), (g). Pub. L. 112–240, § 101(b)(2)(A)(ii), struck out subsecs. (f) and (g), which related to phaseout of limitation and termination of applicability of section, respectively.

2001—Subsecs. (f), (g). Pub. L. 107–16 added subsecs. (f) and (g).

1998—Subsec. (c)(3). Pub. L. 105–277 substituted “for casualty or theft losses described in paragraph (2) or (3) of section 165(c) or for losses described in section 165(d)” for “for losses described in subsection (c)(3) or (d) of section 165”.

1993—Subsec. (b)(2)(B). Pub. L. 103–66, § 13201(b)(3)(E), substituted “1992” for “1989”.

Subsec. (f). Pub. L. 103–66, § 13204, struck out heading and text of subsec. (f). Text read as follows: “This section shall not apply to any taxable year beginning after December 31, 1995.”

Statutory Notes and Related SubsidiariesEffective Date of 2025 Amendment

Pub. L. 119–21, title VII, § 70111(c), July 4, 2025, 139 Stat. 165, provided that: “The amendments made by this section [amending this section and section 199A of this title] shall apply to taxable years beginning after December 31, 2025.”

Effective Date of 2017 Amendment

Amendment by section 11002(d)(2) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115–97, set out as a note under section 1 of this title.

Pub. L. 115–97, title I, § 11046(b), Dec. 22, 2017, 131 Stat. 2088, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 2017.”

Effective Date of 2013 Amendment

Amendment by Pub. L. 112–240 applicable to taxable years beginning after Dec. 31, 2012, see section 101(b)(3) of Pub. L. 112–240, set out as a note under section 1 of this title.

Effective Date of 2001 Amendment

Pub. L. 107–16, title I, § 103(b), June 7, 2001, 115 Stat. 45, provided that: “The amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2005.”

Effective Date of 1998 Amendment

Pub. L. 105–277, div. J, title IV, § 4004(c)(3), Oct. 21, 1998, 112 Stat. 2681–911, provided that: “The amendment made by subsection (b)(2) [amending this section] shall apply to taxable years beginning after December 31, 1990.”

Effective Date of 1993 Amendment

Amendment by section 13201(b)(3)(E) of Pub. L. 103–66 applicable to taxable years beginning after Dec. 31, 1992, see section 13201(c) of Pub. L. 103–66, set out as a note under section 1 of this title.

Effective Date

Section applicable to taxable years beginning after Dec. 31, 1990, see section 11103(e) of Pub. L. 101–508, set out as an Effective Date of 1990 Amendment note under section 1 of this title.

Notes of Decisions
Cited in 7 cases (1 in the last 5 years), 2000–2021 · leading case: New York v. Yellen, 15 F.4th 569 (2d Cir. 2021).
Sort: Relevance Newest Treatment
New York v. Yellen, 15 F.4th 569 (2d Cir. 2021). · cites it 2× “1388 , 1388-406 3 (1990) (codified at 26 U.S.C. § 68 (a)). Finally, in 2004 Congress reinstated the 4 deduction for state and local sales taxes but forced taxpayers to choose between 5 deducting state and local sales taxes and deducting state and local income taxes, 6 thereby…”
Srivastava v. Comm'r, 220 F.3d 353 (5th Cir. 2000). “See 26 U.S.C. § 68 . Finally, the alternative minimum tax also may operate to reduce the value of a deduction.”
United States v. Elsass, 978 F. Supp. 2d 901 (S.D. Ohio 2013). “See 26 U.S.C. § 68 . Further, § 67 applies to certain itemized deductions and prohibits those deductions if, in the aggregate, they do not exceed 2% of a taxpayer’s AGI.”
United States v. McCoy, 280 F.3d 1058 (D.C. Cir. 2002). “Just as under the IRC an increase in income at certain levels will reduce the benefit of a taxpayer’s deductions, see 26 U.S.C. § 68 (reducing allowable deductions by 3% of the excess of adjusted gross income over applicable statutory threshold); see also id.”
Campbell v. United States, 45 F. App'x 50 (2d Cir. 2002). “Specifically, he argued that: (1) the federal income taxes on amounts taken as state and local income taxes pursuant to 26 U.S.C. § 68 was beyond the authority granted to Congress by the Sixteenth Amendment, and infringed on the reserved rights of the States in violation of the…”
State Of New York v. Mnuchin, 408 F. Supp. 3d 399 (S.D.N.Y. 2019). · cites it 2× “1388 , 1388-406 (codified at 26 U.S.C. § 68 ). And the Pease limitation has been upheld as constitutional over objections that it exceeded Congress’s lawful tax authority by effectively limiting the SALT deduction.”
Dulik v. Comm'r, 2017 T.C. Summary Opinion 51 (Tax Ct. 2017). · cites it 2× “Generally, legal fees are deductible as an ordinary and necessary business expense only if the matter with respect to which fees were incurred originated in the taxpayer's trade or business and only if the claim *60 is sufficiently connected to that trade or business; the…”
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