MaxGhenis · Nov 8, 2026 · Nov 8, 2026
diff --git a/changelog.d/fix-id-retirement-cap-2026.fixed.md b/changelog.d/fix-id-retirement-cap-2026.fixed.md
@@ -0,0 +1 @@
+Set Idaho's 2026 retirement benefits deduction cap to $49,824 for single filers, heads of household and surviving spouses, and $74,736 for joint filers, from the Social Security Administration's 2026 maximum benefit for a worker retiring at full retirement age, as Idaho Code § 63-3022A(2) defines the cap.
diff --git a/policyengine_us/parameters/gov/states/id/tax/income/deductions/retirement_benefits/cap.yaml b/policyengine_us/parameters/gov/states/id/tax/income/deductions/retirement_benefits/cap.yaml
@@ -26,19 +26,28 @@ metadata:
       href: https://tax.idaho.gov/wp-content/uploads/forms/EIN00046/EIN00046_10-23-2024.pdf#page=32
     - title: Idaho Individual Income Tax Instructions Packet 2025
       href: https://tax.idaho.gov/wp-content/uploads/forms/EIN00046/EIN00046_03-02-2026.pdf#page=45
+    - title: Social Security Administration, 2026 Social Security changes (maximum benefit for a worker retiring at full retirement age)
+      href: https://www.ssa.gov/news/en/cola/factsheets/2026.html
 
 SINGLE:
   2021-01-01: 37_776
   2022-01-01: 40_140
   2023-01-01: 43_524
   2024-01-01: 45_864
   2025-01-01: 48_216
+  # 12 times SSA's 2026 maximum benefit for a worker retiring at full
+  # retirement age ($4,152 a month), as 63-3022A(2)(b) defines it.
+  2026-01-01: 49_824
 JOINT:
   2021-01-01: 56_664
   2022-01-01: 60_210
   2023-01-01: 65_286
   2024-01-01: 68_796
   2025-01-01: 72_324
+  # 63-3022A(2)(a) sets the joint amount for a worker whose spouse draws
+  # benefits only on the worker's record. The Tax Commission's 2021-2025
+  # joint amounts equal 1.5 times the single amount, as this one does.
+  2026-01-01: 74_736
 SEPARATE:
   # Per Idaho Form 39R instructions: "If you're married, you can't claim
   # this deduction if you file separately." (Idaho Code 63-3022A(2)(e))
@@ -51,10 +60,12 @@ SURVIVING_SPOUSE:
   2023-01-01: 43_524
   2024-01-01: 45_864
   2025-01-01: 48_216
+  2026-01-01: 49_824
 HEAD_OF_HOUSEHOLD:
   # Per Idaho Code 63-3022A(2)(b): "not married" taxpayers use single cap
   2021-01-01: 37_776
   2022-01-01: 40_140
   2023-01-01: 43_524
   2024-01-01: 45_864
   2025-01-01: 48_216
+  2026-01-01: 49_824
diff --git a/...states/id/tax/income/deductions/retirement_benefits/id_retirement_benefits_deduction.yaml b/...states/id/tax/income/deductions/retirement_benefits/id_retirement_benefits_deduction.yaml
@@ -135,3 +135,113 @@
   output:
     id_retirement_benefits_deduction_relevant_income: 10_000
     id_retirement_benefits_deduction: 10_000
+
+# Idaho Code 63-3022A(2) caps the deduction at SSA's maximum benefit for a
+# worker reaching full retirement age: $4,152 a month in 2026, so $49,824 for
+# a single filer and 1.5 times that, $74,736, on a joint return.
+
+- name: Idaho 2026 retirement benefits cap for a single filer.
+  period: 2026
+  input:
+    people:
+      person1:
+        id_retirement_benefits_deduction_relevant_income: 60_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SINGLE
+    households:
+      household:
+        members: [person1]
+        state_code: ID
+  output:
+    id_retirement_benefits_deduction: 49_824
+
+- name: Idaho 2026 retirement benefits cap on a joint return.
+  period: 2026
+  input:
+    people:
+      person1:
+        id_retirement_benefits_deduction_relevant_income: 80_000
+      person2:
+        id_retirement_benefits_deduction_relevant_income: 0
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+        filing_status: JOINT
+    households:
+      household:
+        members: [person1, person2]
+        state_code: ID
+  output:
+    id_retirement_benefits_deduction: 74_736
+
+- name: Idaho 2026 retirement benefits cap less Social Security retirement benefits.
+  period: 2026
+  input:
+    people:
+      person1:
+        id_retirement_benefits_deduction_relevant_income: 60_000
+        social_security_retirement: 20_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SINGLE
+    households:
+      household:
+        members: [person1]
+        state_code: ID
+  output:
+    # 49,824 - 20,000
+    id_retirement_benefits_deduction: 29_824
+
+- name: Idaho 2026 retirement benefits cap for a head of household.
+  period: 2026
+  input:
+    people:
+      person1:
+        id_retirement_benefits_deduction_relevant_income: 60_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: HEAD_OF_HOUSEHOLD
+    households:
+      household:
+        members: [person1]
+        state_code: ID
+  output:
+    id_retirement_benefits_deduction: 49_824
+
+- name: Idaho 2026 retirement benefits cap for a surviving spouse.
+  period: 2026
+  input:
+    people:
+      person1:
+        id_retirement_benefits_deduction_relevant_income: 60_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SURVIVING_SPOUSE
+    households:
+      household:
+        members: [person1]
+        state_code: ID
+  output:
+    id_retirement_benefits_deduction: 49_824
+
+- name: Idaho 2025 retirement benefits cap for a single filer stays $48,216.
+  period: 2025
+  input:
+    people:
+      person1:
+        id_retirement_benefits_deduction_relevant_income: 60_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SINGLE
+    households:
+      household:
+        members: [person1]
+        state_code: ID
+  output:
+    id_retirement_benefits_deduction: 48_216
Original file line number	Diff line number	Diff line change
		@@ -0,0 +1 @@
		Set Idaho's 2026 retirement benefits deduction cap to $49,824 for single filers, heads of household and surviving spouses, and $74,736 for joint filers, from the Social Security Administration's 2026 maximum benefit for a worker retiring at full retirement age, as Idaho Code § 63-3022A(2) defines the cap.