MaxGhenis · Nov 7, 2026 · Nov 7, 2026 · Nov 7, 2026 · Nov 7, 2026 · Nov 7, 2026
diff --git a/changelog.d/rrb-federal-tax.added.md b/changelog.d/rrb-federal-tax.added.md
@@ -0,0 +1 @@
+Add inputs for the three parts of Railroad Retirement Act benefits: the tier 1 social security equivalent benefit, the taxable rest of the annuity and its tax-free part.
diff --git a/changelog.d/rrb-federal-tax.fixed.md b/changelog.d/rrb-federal-tax.fixed.md
@@ -0,0 +1 @@
+Tax Railroad Retirement Act benefits federally, with tier 1 social security equivalent benefits under IRC 86 alongside Social Security and the rest of the annuity as a pension under IRC 72(r). Keep them out of every state income tax, Minnesota's and Vermont's minimum taxes and the state withholding estimates, as 45 U.S.C. 231m(a) requires, and count them as each state's rules do in Arizona's property tax credit, Minnesota's elderly and disabled subtraction, Oregon's retirement income credit, West Virginia's senior citizen deduction, Pennsylvania's property tax and rent rebate and Utah's homeowner and renter relief.
diff --git a/changelog.d/vet-rrb-income-totals.fixed.md b/changelog.d/vet-rrb-income-totals.fixed.md
@@ -0,0 +1 @@
+Count veterans' benefits and Railroad Retirement Board benefits in household and SPM benefits, and in the copies of those lists that the BOOST, End Child Poverty Act and Texas rebate reforms define, so both net incomes and SPM resources include them.
diff --git a/policyengine_us/parameters/gov/hhs/medicaid/income/modification.yaml b/policyengine_us/parameters/gov/hhs/medicaid/income/modification.yaml
@@ -5,6 +5,9 @@ values:
     - section_911_excluded_income
     - tax_exempt_interest_income
     - tax_exempt_social_security
+    # Section 36B(d)(2)(B)(iii) adds back social security benefits as section
+    # 86(d) defines them, which include tier 1 railroad retirement benefits.
+    - tax_exempt_railroad_social_security_equivalent_benefits
 metadata:
   unit: list
   label: Medicaid/CHIP/ACA-related MAGI additions over AGI

diff --git a/policyengine_us/parameters/gov/household/household_benefits.yaml b/policyengine_us/parameters/gov/household/household_benefits.yaml
@@ -19,6 +19,10 @@ values:
     - educational_assistance
     - financial_assistance
     - survivor_benefits
+    # Census money income counts veterans' payments, and railroad retirement
+    # as a government transfer (P60-200 Appendix A).
+    - veterans_benefits
+    - railroad_benefits
     - household_head_start_benefits
     # One-time energy relief payments.
     # Paid at the same time as the Alaska Permanent Fund Dividend,
@@ -52,6 +56,10 @@ values:
     - educational_assistance
     - financial_assistance
     - survivor_benefits
+    # Census money income counts veterans' payments, and railroad retirement
+    # as a government transfer (P60-200 Appendix A).
+    - veterans_benefits
+    - railroad_benefits
     - household_head_start_benefits
     # One-time energy relief payments.
     # Paid at the same time as the Alaska Permanent Fund Dividend,
@@ -72,3 +80,6 @@ metadata:
   unit: list
   period: year
   label: Household benefits
+  reference:
+    - title: "Census Bureau, P60-200 Appendix A, Definitions and Explanations #page 3-4"
+      href: https://www2.census.gov/programs-surveys/cps/methodology/Appendix%20A%20P60-200%20income%20measurement%20definition.pdf#page=3
diff --git a/...ov/irs/deductions/itemized/salt_and_real_estate/state_sales_tax_table/income_sources.yaml b/...ov/irs/deductions/itemized/salt_and_real_estate/state_sales_tax_table/income_sources.yaml
@@ -44,11 +44,13 @@ values:
     - veterans_benefits
     # Nontaxable combat pay - not available.
     - workers_compensation
-    # Nontaxable part of social security and railroad retirement benefits;
-    # railroad retirement benefits are not included.
+    # Nontaxable part of social security and railroad retirement benefits.
     - tax_exempt_social_security
-    # Nontaxable IRA, pension, or annuity distributions (excluding rollovers).
+    - tax_exempt_railroad_social_security_equivalent_benefits
+    # Nontaxable IRA, pension, or annuity distributions (excluding rollovers),
+    # including Railroad Retirement Act annuities' tax-free part.
     - tax_exempt_pension_income
+    - tax_exempt_railroad_pension_benefits
     - tax_exempt_retirement_distributions
     # Public assistance payments.
     - tanf

diff --git a/policyengine_us/parameters/gov/irs/gross_income/sources.yaml b/policyengine_us/parameters/gov/irs/gross_income/sources.yaml
@@ -21,6 +21,10 @@ values:
     - dividend_income
     - taxable_pension_income
     # Pension income includes annuities and endowment contracts
+    # Railroad Retirement Act benefits other than the social security
+    # equivalent benefit, which IRC 72(r)(1) treats as benefits from a
+    # qualified employer plan (Form 1040 line 5b).
+    - taxable_railroad_pension_benefits
     # Disability benefits from a plan paid for by the employer (§ 105(a)),
     # on Form 1040 line 1h until minimum retirement age, then line 5.
     # Benefits from a plan the recipient paid for are excluded (§ 104(a)(3)).
@@ -35,6 +39,9 @@ values:
     - estate_income
     - taxable_unemployment_compensation
     - taxable_social_security
+    # Tier 1 railroad retirement benefits, which section 86 taxes together
+    # with Social Security (IRC 86(d)(1)(B); Form 1040 line 6b).
+    - taxable_railroad_social_security_equivalent_benefits
     - illicit_income
     - taxable_retirement_distributions
     - taxable_roth_conversions
@@ -56,6 +63,10 @@ metadata:
   reference:
     - title: 26 U.S. Code § 61 - Gross income defined
       href: https://www.law.cornell.edu/uscode/text/26/61
+    - title: 26 U.S. Code § 72(r) - Certain railroad retirement benefits treated as received under employer plans
+      href: https://www.law.cornell.edu/uscode/text/26/72#r
+    - title: 26 U.S. Code § 86(d) - Social security benefit
+      href: https://www.law.cornell.edu/uscode/text/26/86#d
     - title: 26 U.S. Code § 129 - Dependent care assistance programs
       href: https://www.law.cornell.edu/uscode/text/26/129
     - title: 26 U.S. Code § 111 - Recovery of tax benefit items

diff --git a/policyengine_us/parameters/gov/ssa/ssi/income/sources/unearned.yaml b/policyengine_us/parameters/gov/ssa/ssi/income/sources/unearned.yaml
@@ -4,9 +4,9 @@ values:
     # (a) Annuities, pensions, and other periodic payments.
     - pension_income
     - social_security
-    # NOTE: Household net income, SNAP, HUD annual income and other program
-    # income lists count social_security and ssi but not railroad_benefits, so
-    # an SSI recipient's railroad annuity drops out of them.
+    # NOTE: SNAP, HUD annual income and other program income lists count
+    # social_security and ssi but not railroad_benefits, so an SSI recipient's
+    # railroad annuity drops out of them.
     # https://github.com/PolicyEngine/policyengine-us/issues/10551
     - railroad_benefits
     - disability_benefits

diff --git a/policyengine_us/parameters/gov/states/az/tax/income/subtractions/subtractions.yaml b/policyengine_us/parameters/gov/states/az/tax/income/subtractions/subtractions.yaml
@@ -12,6 +12,7 @@ values:
     - az_adoption_expense_subtraction # Other subtractions - Item D
     - az_families_tax_rebate_subtraction # Line 36, Item U
     - az_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
   2025-01-01:
     - us_govt_interest # Line 28
     - az_public_pension_exclusion # Line 29a
@@ -29,6 +30,7 @@ values:
     - auto_loan_interest_deduction # MCTCP worksheet Line 4 (Sch 1-A Line 30)
     - additional_senior_deduction # MCTCP worksheet Line 5 (Sch 1-A Line 37)
     - az_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
   # HB 4168 (2026): auto loan interest sunsets after TY2025 (43-1022(36));
   # adds child & dependent care and IRC 530A distribution subtractions.
   2026-01-01:
@@ -48,6 +50,7 @@ values:
     - az_dependent_care_expense_subtraction # 43-1022(34)
     - az_530a_distribution_subtraction # 43-1022(33)
     - az_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
 metadata:
   unit: list
   period: year
@@ -71,3 +74,5 @@ metadata:
       href: https://www.azleg.gov/ars/43/01022.htm
     - title: Arizona HB 4168 (2026), Sec. 15, amending A.R.S. 43-1022(31)-(36)
       href: https://www.azleg.gov/legtext/57leg/2R/bills/HB4168H.pdf#page=28
+    - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+      href: https://www.law.cornell.edu/uscode/text/45/231m#a
diff --git a/policyengine_us/parameters/gov/states/ca/tax/income/agi/subtractions.yaml b/policyengine_us/parameters/gov/states/ca/tax/income/agi/subtractions.yaml
@@ -6,13 +6,15 @@ values:
     - us_govt_interest
     - salt_refund_income
     - ca_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
   2025-01-01:
     - taxable_social_security
     - taxable_unemployment_compensation
     - us_govt_interest
     - salt_refund_income
     - ca_military_retirement_exclusion
     - ca_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
 
 metadata:
   reference:
@@ -24,6 +26,8 @@ metadata:
       href: https://www.ftb.ca.gov/forms/2024/2024-540-ca-instructions.html
     - title: 2025 California Form 540 Schedule CA instructions
       href: https://www.ftb.ca.gov/forms/2025/2025-540-ca-instructions.html
+    - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+      href: https://www.law.cornell.edu/uscode/text/45/231m#a
   period: year
   unit: list
   label: California AGI subtractions
diff --git a/policyengine_us/parameters/gov/states/co/tax/income/subtractions/subtractions.yaml b/policyengine_us/parameters/gov/states/co/tax/income/subtractions/subtractions.yaml
@@ -8,6 +8,7 @@ values:
     - co_collegeinvest_subtraction
     - co_charitable_contribution_subtraction
     - co_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
     # Colorado Agricultural Land Capital Gain Subtraction
     # Qualified Reservation Income
     # PERA/DPSRS Subtraction, for PERA contributions made in 1984–1986 or DPSRS contributions made in 1986
@@ -29,6 +30,7 @@ values:
     - co_charitable_contribution_subtraction
     - co_able_contribution_subtraction
     - co_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
     # Colorado Agricultural Land Capital Gain Subtraction
     # Qualified Reservation Income
     # PERA/DPSRS Subtraction, for PERA contributions made in 1984–1986 or DPSRS contributions made in 1986
@@ -58,3 +60,5 @@ metadata:
       href: https://tax.colorado.gov/sites/tax/files/documents/DR0104_book_2024.pdf#page=18
     - title: 2025 Colorado Individual Tax Filing Guide 104 Book
       href: https://tax.colorado.gov/sites/tax/files/documents/Book104_2025.pdf#page=18
+    - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+      href: https://www.law.cornell.edu/uscode/text/45/231m#a
diff --git a/policyengine_us/parameters/gov/states/ct/tax/income/subtractions/subtractions.yaml b/policyengine_us/parameters/gov/states/ct/tax/income/subtractions/subtractions.yaml
@@ -8,6 +8,7 @@ values:
     - ct_pension_annuity_subtraction #ln 48b
     - salt_refund_income #ln 38
     - ct_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
 
 metadata:
   unit: list
@@ -26,3 +27,5 @@ metadata:
       href: https://portal.ct.gov/-/media/drs/forms/2024/income/2024-ct-1040-instructions_1224.pdf#page=8
     - title: 2025 Form CT-1040 Connecticut Resident Income Tax Return Instructions, Lines 39,41,44,48b
       href: https://portal.ct.gov/-/media/drs/forms/2025/income/2025-ct-1040-instructions_1225.pdf#page=8
+    - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+      href: https://www.law.cornell.edu/uscode/text/45/231m#a
diff --git a/policyengine_us/parameters/gov/states/dc/tax/income/subtractions/sources.yaml b/policyengine_us/parameters/gov/states/dc/tax/income/subtractions/sources.yaml
@@ -13,6 +13,8 @@ metadata:
       href: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2023_D40_Book_Final_012324.pdf#page=34
     - title: 2024 DC Form D-40 Booklet
       href: https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2024_D40_Booklet_011525.pdf#page=34
+    - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+      href: https://www.law.cornell.edu/uscode/text/45/231m#a
 values:
   2021-01-01:
     - taxable_social_security
@@ -23,3 +25,4 @@ values:
     - salt_refund_income
     - dc_survivor_benefits_subtraction
     - dc_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
diff --git a/policyengine_us/parameters/gov/states/de/tax/income/subtractions/subtractions.yaml b/policyengine_us/parameters/gov/states/de/tax/income/subtractions/subtractions.yaml
@@ -10,6 +10,7 @@ values:
     - taxable_unemployment_compensation # (10)
     - salt_refund_income # 30 Del. C. § 1106(b)(9) / PIT-RES Line 7
     - de_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
     # The elderly or disabled income exclusion is computed separately
     # - de_elderly_or_disabled_income_exclusion # (2)
   2022-01-01:
@@ -19,6 +20,7 @@ values:
     - de_529_plan_subtraction # HB 145
     - salt_refund_income # 30 Del. C. § 1106(b)(9) / PIT-RES Line 7
     - de_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
 
 metadata:
   unit: list
@@ -31,3 +33,5 @@ metadata:
     href: https://legis.delaware.gov/BillDetail/79061
   - title: 2021 Delaware Resident Individual Income Tax Return (PIT-RES) Instructions, Line 7
     href: https://revenuefiles.delaware.gov/2021/PIT-RES_TY21_2021-01_Instructions.pdf
+  - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+    href: https://www.law.cornell.edu/uscode/text/45/231m#a
diff --git a/policyengine_us/parameters/gov/states/ga/tax/income/subtractions/subtractions.yaml b/policyengine_us/parameters/gov/states/ga/tax/income/subtractions/subtractions.yaml
@@ -11,13 +11,15 @@ values:
     - taxable_social_security
     - ga_investment_in_529_plan_deduction
     - ga_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
   2022-01-01:
     - us_govt_interest
     - ga_retirement_exclusion
     - ga_military_retirement_exclusion
     - taxable_social_security
     - ga_investment_in_529_plan_deduction
     - ga_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
   2026-01-01:
     - us_govt_interest
     - ga_retirement_exclusion
@@ -27,13 +29,15 @@ values:
     - ga_qualified_overtime_exclusion
     - ga_cash_tip_exclusion
     - ga_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
   2029-01-01:
     - us_govt_interest
     - ga_retirement_exclusion
     - ga_military_retirement_exclusion
     - taxable_social_security
     - ga_investment_in_529_plan_deduction
     - ga_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
 
 metadata:
   unit: list
@@ -52,3 +56,5 @@ metadata:
       href: https://www.legis.ga.gov/api/legislation/document/20252026/249080#page=6
     - title: Georgia HB463 (2025-2026), Section 2-4 adding O.C.G.A. § 48-7-27(a)(17) - cash tips exclusion
       href: https://www.legis.ga.gov/api/legislation/document/20252026/249080#page=7
+    - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+      href: https://www.law.cornell.edu/uscode/text/45/231m#a
diff --git a/policyengine_us/parameters/gov/states/hi/tax/income/subtractions/subtractions.yaml b/policyengine_us/parameters/gov/states/hi/tax/income/subtractions/subtractions.yaml
@@ -8,6 +8,7 @@ values:
     - us_govt_interest # Line 18
     - student_loan_interest_ald # Line 18
     - hi_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
   2025-01-01:
     - taxable_pension_income # Line 13
     - military_retirement_income # Line 13
@@ -16,6 +17,7 @@ values:
     - us_govt_interest # Line 18
     - hi_student_loan_interest_subtraction # Line 18
     - hi_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
 
 
 metadata:
@@ -31,3 +33,5 @@ metadata:
       href: https://law.justia.com/codes/hawaii/2022/title-14/chapter-235/section-235-7/
     - title: 2025 Hawaii N-11 Instructions Subtractions
       href: https://files.hawaii.gov/tax/forms/current/n11ins.pdf#page=13
+    - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+      href: https://www.law.cornell.edu/uscode/text/45/231m#a
diff --git a/policyengine_us/parameters/gov/states/ia/tax/income/taxable_income/subtractions.yaml b/policyengine_us/parameters/gov/states/ia/tax/income/taxable_income/subtractions.yaml
@@ -21,6 +21,7 @@ values:
     - ia_disability_income_exclusion
     # Schedule 1, line 11, column B, and line 19
     - ia_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
 
 metadata:
   unit: list
@@ -35,3 +36,5 @@ metadata:
     href: https://revenue.iowa.gov/media/4096/download?inline=#page=1
   - title: 2024 IA1040 Iowa Income Tax Return Instruction
     href: https://revenue.iowa.gov/media/4152/download?inline#page=61
+  - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+    href: https://www.law.cornell.edu/uscode/text/45/231m#a
diff --git a/policyengine_us/parameters/gov/states/id/tax/income/subtractions/subtractions.yaml b/policyengine_us/parameters/gov/states/id/tax/income/subtractions/subtractions.yaml
@@ -13,6 +13,7 @@ values:
     - id_529_plan_subtraction # Idaho Code 63-3022(n)
     - id_health_insurance_premiums_subtraction # Idaho Code 63-3022P
     - id_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
   2025-01-01:
     - salt_refund_income # (2)
     - us_govt_interest # (3)(a)
@@ -27,6 +28,7 @@ values:
     - id_529_plan_subtraction # Idaho Code 63-3022(n)
     - id_health_insurance_premiums_subtraction # Idaho Code 63-3022P
     - id_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
 
 
 metadata:
@@ -44,3 +46,5 @@ metadata:
     href: https://legislature.idaho.gov/statutesrules/idstat/Title63/T63CH30/SECT63-3022P/
   - title: Section 35.01.01.254 - (5) / (3) (a)
     href: https://regulations.justia.com/states/idaho/35/35-01-01/section-35-01-01-254/
+  - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+    href: https://www.law.cornell.edu/uscode/text/45/231m#a
diff --git a/policyengine_us/parameters/gov/states/il/tax/income/base/subtractions.yaml b/policyengine_us/parameters/gov/states/il/tax/income/base/subtractions.yaml
@@ -11,6 +11,7 @@ values:
     - il_529_plan_subtraction
     - salt_refund_income
     - il_other_subtractions
+    - taxable_railroad_benefits  # 45 U.S.C. 231m(a)
 metadata:
   unit: list
   period: year
@@ -26,3 +27,5 @@ metadata:
       href: https://tax.illinois.gov/content/dam/soi/en/web/tax/forms/incometax/documents/currentyear/individual/il-1040-schedule-m-instr.pdf#page=3
     - title: Illinois Department of Revenue Publication 120, Retirement Income
       href: https://tax.illinois.gov/content/dam/soi/en/web/tax/research/publications/pubs/documents/pub-120.pdf#page=2
+    - title: 45 U.S. Code § 231m(a) - Railroad Retirement Act annuities are exempt from state tax
+      href: https://www.law.cornell.edu/uscode/text/45/231m#a
Original file line number	Diff line number	Diff line change
		@@ -0,0 +1 @@
		Add inputs for the three parts of Railroad Retirement Act benefits: the tier 1 social security equivalent benefit, the taxable rest of the annuity and its tax-free part.
Original file line number	Diff line number	Diff line change
		@@ -0,0 +1 @@
		Tax Railroad Retirement Act benefits federally, with tier 1 social security equivalent benefits under IRC 86 alongside Social Security and the rest of the annuity as a pension under IRC 72(r). Keep them out of every state income tax, Minnesota's and Vermont's minimum taxes and the state withholding estimates, as 45 U.S.C. 231m(a) requires, and count them as each state's rules do in Arizona's property tax credit, Minnesota's elderly and disabled subtraction, Oregon's retirement income credit, West Virginia's senior citizen deduction, Pennsylvania's property tax and rent rebate and Utah's homeowner and renter relief.
Original file line number	Diff line number	Diff line change
		@@ -0,0 +1 @@
		Count veterans' benefits and Railroad Retirement Board benefits in household and SPM benefits, and in the copies of those lists that the BOOST, End Child Poverty Act and Texas rebate reforms define, so both net incomes and SPM resources include them.