Schedule A 2026 draft: every itemized-deduction line that changed

The short answer. The IRS posted its draft of Schedule A for tax year 2026 on May 12, 2026, and it is the first version of the itemized-deduction form that reflects Public Law 119-21 in full. Five lines carry the changes. Line 5e lifts the state and local tax cap to $40,400 with a phase-down starting at $505,000. Line 8d, “Reserved for future use” on the 2025 form, now reads “Mortgage insurance premiums.” Line 13 pulls charitable gifts through a new limitation worksheet built around a 0.5 percent floor. Line 17 breaks “other itemized deductions” into eleven sub-lines, with gambling losses now capped at 90 percent and educator expenses added at the end. And line 18 asks a question the form has not asked since 2017: whether income exceeds $384,350, the trigger for the new 2/37 overall limitation in 26 U.S.C. 68. Every number here comes from the draft PDF and the statute as amended; the instructions had not been posted when this was written.

Draft season is the window in which a form can still change, so this page is written to be updated. The companion piece on the new form for tips, overtime and car-loan interest, Schedule 1-A 2026 draft, line by line, covers the deductions that sit outside Schedule A; the decision between itemizing and the standard deduction, which these changes shift for a narrow group of filers, is worked through in standard deduction versus itemizing.

The two forms side by side

Line 5e: the cap moves to $40,400 and the phase-down to $505,000

The 2025 form fixed the SALT cap at $40,000 with a phase-down for AGI above $500,000. The 2026 draft prints $40,400 and $505,000, and both numbers are written into the statute rather than indexed. Section 164(b)(7)(A) sets the “applicable limitation amount” at $40,000 for 2025, $40,400 for 2026, and “101 percent of the dollar amount in effect” for the preceding year from 2027 through 2029, then “$10,000” for any year after 2029. Section 164(b)(7)(B) does the same for the threshold: $500,000 in 2025, $505,000 in 2026, 101 percent thereafter.

The phase-down mechanics are the part filers most often misread. The cap is “reduced by 30 percent of the excess” of modified AGI over the threshold, “half the threshold amount in the case of a married individual filing a separate return,” and the reduction “shall not result in the applicable limitation amount being less than $10,000.” Two consequences follow. A joint filer with $560,000 of MAGI in 2026 loses 30 percent of $55,000, or $16,500, and keeps a cap of $23,900. And the cap hits its $10,000 floor when the excess reaches $101,333.33, that is, at $606,333 of MAGI, up from $600,000 in 2025. Between $505,000 and $606,333, each additional dollar of MAGI costs 30 cents of deduction, which at a 35 percent marginal rate is a 10.5-point surcharge that the bracket tables do not show.

Line 8d: mortgage insurance premiums return

This is the cleanest change on the form. For 2025 the line was a placeholder. For 2026 it is live, and the reason is a single subclause. Section 163(h)(3)(E) has treated premiums for qualified mortgage insurance on acquisition debt as deductible interest since 2007, subject to a phase-out that removes 10 percent of the deduction for each $1,000 of AGI above $100,000 ($50,000 MFS), but clause (iv) of that subparagraph terminated the treatment for amounts paid after December 31, 2021. Public Law 119-21, section 70108, rewrote the special rules for tax years beginning after 2017, striking the “before January 1, 2026” sunset and inserting subclause (F)(i)(III): “Mortgage insurance premiums treated as interest. Clause (iv) of subparagraph (E) shall not apply.” The termination is switched off, so premiums paid in 2026 flow to line 8d and into the line 8e total.

The same section made the $750,000 acquisition-debt ceiling permanent by deleting the 2026 sunset in section 163(h)(3)(F)(i), which is why the caution above line 8 is unchanged. Whether a borrower still pays mortgage insurance at all is a separate question, worked through in how to remove PMI.

Lines 11-15: charity now runs through a floor

On the 2025 form, cash gifts, non-cash gifts and the prior-year carryover added straight to a total on line 14. The 2026 draft inserts a step: line 13 reads “Enter the amount from line 6 of the Charitable Contribution Limitation Worksheet,” the carryover moves to line 14 and the total to line 15.

The worksheet exists because of new section 170(b)(1)(I). For an individual, “any charitable contribution otherwise allowable … shall be allowed only to the extent that the aggregate of such contributions exceeds 0.5 percent of the taxpayer’s contribution base for the taxable year.” The contribution base is AGI computed without net operating loss carrybacks, so for most filers it is line 11b. A filer with $200,000 of AGI and $5,000 of cash gifts to public charities deducts $4,000. The statute also fixes the order in which the floor bites: it is applied “first” to contributions subject to the 20 percent limit, “second” to the 30 percent capital-gain category, then upward, so the least favorable gifts absorb the floor before the 60 percent cash category does. The worksheet’s six lines are where that ordering happens, and the form itself no longer shows the arithmetic.

Two related provisions do not appear on Schedule A. The new deduction for filers who do not itemize, up to $1,000, or $2,000 on a joint return, for cash gifts to public charities under section 170(p), belongs on Form 1040, whose 2026 draft the IRS had not posted as of this writing. And the reduction in the value of itemized deductions for top-bracket taxpayers is not a charity rule at all; it is the line 18 question below.

Line 16: state-declared disasters count

The casualty line, renumbered from 15 to 16, adds four words. Losses now qualify if they come from “a federally or state-declared disaster.” Section 165(h)(5)(A) was amended by Public Law 119-21, section 70109(b)(1), to read “or a State declared disaster,” and section 70109(a)(1) struck the “before January 1, 2026” sunset, so the post-2017 limitation of personal casualty losses to declared disasters is now permanent but broader. The 10 percent of AGI floor and the $100 per-event threshold in section 165(h) are unchanged.

Line 17: eleven sub-lines, and two that matter

The 2025 form compressed every remaining itemized deduction into one line with a list in the instructions. The 2026 draft prints the list on the form: 17a gambling losses, 17b net qualified disaster loss, 17c standard deduction claimed with a qualified disaster loss, 17d casualty losses of income-producing property, 17e federal estate tax on income in respect of a decedent, 17f amortizable bond premium, 17g ordinary loss on contingent-payment or inflation-indexed debt, 17h repayments under a claim of right over $3,000, 17i unrecovered investment in a pension, 17j impairment-related work expenses, 17k educator expenses, and 17z for the rest. Two of those carry new law.

17a, gambling at 90 percent. Section 165(d), as replaced by Public Law 119-21, section 70114(a), now says the deduction “shall be equal to 90 percent of the amount of such losses during such taxable year” and “shall be allowed only to the extent of the gains from such transactions.” The line label, “Deductible gambling losses,” is the form’s way of saying the taxpayer applies the 90 percent before entering the figure. A filer with $10,000 of winnings reported on Schedule 1 and $10,000 of documented losses enters $9,000 here and pays tax on $1,000 that did not exist as profit. Paragraph (2) of the subsection folds “any deduction otherwise allowable … incurred in carrying on any wagering transaction” into the term “losses,” so a professional gambler’s travel and entry fees are inside the 90 percent as well. The checkbox beneath 17a, for winnings reported on Schedule C or E, exists for that population.

17k, educator expenses beyond the $300. Section 67(b)(13), added by Public Law 119-21, section 70110(b), lists “the deductions allowed by section 162 for educator expenses” among the deductions that are not miscellaneous itemized deductions, and new section 67(g) defines them as the section 62(a)(2)(D) expenses “without regard to the dollar limitation.” The above-the-line educator deduction on Schedule 1 keeps its cap; the amount over the cap, which was non-deductible for individuals since 2018, can go on 17k for a filer who itemizes. The line label says “not reported on Schedule 1” to prevent counting the same dollars twice.

Line 18: the $384,350 question and the 2/37 haircut

For eight years, line 17 of Schedule A simply added the column. The 2026 draft, at line 18, asks: “Is the amount on Form 1040 or 1040-SR, line 11b, minus the amounts on lines 13a and 13b of that form, more than $384,350?” A “No” adds the column and sends the total to Form 1040 line 12e. A “Yes” sends the filer to an Itemized Deductions Worksheet in the instructions.

The reason is the rewritten section 68. The old Pease limitation, suspended since 2018, reduced itemized deductions by 3 percent of AGI over a threshold. The new text is different in kind. Itemized deductions “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.” Subsection (b) applies it “after the application of any other limitation,” so the SALT cap, the charity floor and the gambling haircut all run first.

Two things about the form’s question are worth decoding. First, “line 11b minus lines 13a and 13b” is AGI less the qualified business income deduction and the Schedule 1-A deductions, which is taxable income before itemized deductions, exactly the “increased by such amount” figure in the statute. Second, $384,350 is not a limit; it is the lowest of the four 2026 thresholds at which the 37 percent bracket begins, the married-filing-separately figure, half of the $768,700 joint threshold. The form uses it as a universal trigger so that no filer skips the worksheet by mistake; the worksheet then applies the filer’s own bracket start, $640,600 for single and head of household, $768,700 for joint returns.

The arithmetic is gentler than the fraction looks, and it has a clean interpretation. Take a joint return with $900,000 of AGI, no QBI or Schedule 1-A deductions, and $100,000 of itemized deductions. Taxable income before itemizing is $900,000; the excess over $768,700 is $131,300; the lesser of $100,000 and $131,300 is $100,000; the reduction is 2/37 of $100,000, or $5,405.41. The filer deducts $94,594.59, which at 37 percent is worth $35,000, or 35 cents per dollar of deductions instead of 37. That is the design: for a taxpayer fully inside the top bracket, 2/37 of a 37 percent deduction is a 2-point haircut, and every itemized dollar is worth 35 percent. For a filer only partly inside the bracket the limitation is smaller. With $800,000 of AGI and the same $100,000 of deductions, the excess is $31,300, the reduction is 2/37 of $31,300, or $1,691.89, and the deductions allowed are $98,308.11.

The 2026 thresholds themselves, and how they were computed from the September 2025 inflation data, are in the 2027 tax brackets projection, which carries the confirmed 2026 table.

What did not change

The medical floor stays at 7.5 percent of AGI on line 3, with the AGI figure still pulled from Form 1040 line 11b. The $750,000 acquisition-debt cap and the checkbox for loans not used to buy, build or improve the home are unchanged in text and now permanent in law. Investment interest on line 9 and the Form 4952 attachment are untouched. The $250 substantiation reminders on lines 11 and 12 and the Form 8283 threshold of $500 are the same. The election on the last line, to itemize even when the standard deduction is larger, keeps its purpose and moves one line down.

What to watch before the form is final

Three things could still move. The draft instructions, which will contain both worksheets, had not been posted; the six lines of the charity worksheet and the exact layout of the section 68 worksheet are the parts most likely to change between draft and final. The Form 1040 for 2026 had not been drafted either, so the non-itemizer charity line and the destination lines cited on Schedule A, 11b, 12e, 13a and 13b, are still the 2025 numbering. And the IRS reserves the right to post a new draft if legislation intervenes; the cover sheet says so. This page will be revised when the instructions appear.

Sources

• Internal Revenue Service — Draft Schedule A (Form 1040) 2026, created May 12, 2026, and Schedule A (Form 1040) 2025, created November 20, 2025
• Legal Information Institute, Cornell Law School — 26 U.S.C. 68, 26 U.S.C. 164, 26 U.S.C. 165, 26 U.S.C. 163, 26 U.S.C. 67, 26 U.S.C. 170, including the 2025 amendment notes citing Public Law 119-21 sections 70108, 70109, 70110, 70114 and 70424