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.