WASHINGTON. D.C.- Congressman Mike Lawler (R, NY-17) has introduced the Public Service Retirement Tax Relief Act, legislation aimed at reducing federal income taxes on state and local government pensions.
The proposal would cap federal income taxes on eligible public pensions, providing up to $10,000 in tax relief for individual retirees and up to $20,000 for qualifying joint filers in which both spouses receive a state or local government pension. Other sources of income would continue to be taxed under current law.
Lawler said the measure is intended to help retired teachers, police officers, firefighters, and other public servants living on fixed incomes by allowing them to keep more of the retirement benefits they earned after years of public service.
Under current federal law, state and local government pensions are taxed as ordinary income. If approved, the legislation would establish a cap on the federal income taxes owed on eligible public pension income.
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