Section 1. Short title
This Act may be cited as the Public Service Retirement Tax Relief Act of 2026.
(a) In general
Section 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
(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.