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Public Service Retirement Tax Relief Act of 2026
To amend the Internal Revenue Code of 1986 to establish a cap on income taxes on certain pensions.
Summary
- Caps the income tax owed on state and local government pensions at $10,000 per individual per year
- Increases the tax cap to $20,000 for joint tax returns where both spouses receive pensions from state or local government
- Allows taxpayers to calculate their total tax by adding the pension tax cap to their non-pension tax liability
- Applies to tax years beginning after December 31, 2025
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
Actions (2)
- Jul 16, 2026 Referred to the House Committee on Ways and Means. · house
- Jul 16, 2026 Introduced in House
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
IN THE HOUSE OF REPRESENTATIVES
July 16, 2026
Mr. Lawler introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to establish a cap on income taxes on certain pensions.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Public Service Retirement Tax Relief Act of 2026”.
SEC. 2. CAP ON INCOME TAXES ON CERTAIN PENSIONS.
(a) In General.—Section 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(k) Special Rule for Individuals Receiving Certain Pensions.—
“(1) In general.—The amount of tax imposed under this chapter may not exceed the sum of—
“(A) the non-pension tax amount, plus
“(B) $10,000 ($20,000 in the case of a qualified joint return).
“(2) Non-pension tax amount.—For purposes of this subsection, the term ‘non-pension tax amount’ means the amount of tax imposed under this chapter, determined without regard to income received from a pension provided by a State or local government.
“(3) Qualified joint return.—For purposes of this subsection, the term ‘qualified joint return’ means a return of tax filed jointly by spouses who each receive income from a pension provided by a State or local government.”.
(b) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2025. <all>
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