Public Service Retirement Tax Relief Act of 2026
Sponsored By: Representative Lawler, Michael [R-NY-17]
Introduced
Summary
Caps the federal tax owed on state and local government pensions. This bill would limit a taxpayer's total federal income tax when they receive a state or local government pension by letting the tax on their non‑pension income stand and then adding at most $10,000 for a single filer or $20,000 for a qualified joint return where both spouses receive such pensions.
Show full summary
- Single public retirees: Federal tax on pension income would be limited so a single filer can add at most $10,000 in tax above what they owe on non‑pension income.
- Married public retirees: Couples who both receive state or local pensions filing jointly would face a $20,000 cap on additional federal tax tied to those pensions.
- How the cap is calculated and when it applies: The measure ties the cap to the "non‑pension tax amount" which is the tax computed without pension income, and it would apply to taxable years beginning after December 31, 2025.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
Lower federal taxes for public retirees
If enacted, this would cap your federal income tax when you receive a State or local government pension. Your tax could not be more than the tax computed without the pension plus $10,000 if you file single. For joint returns where both spouses each receive such pensions, the cap would be the tax without the pensions plus $20,000. This rule would apply to taxable years beginning after December 31, 2025. A "qualified joint return" means a joint return filed by spouses who each receive income from a State or local government pension.
Sponsors & CoSponsors
Sponsor
Lawler, Michael [R-NY-17]
NY • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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