Federal tax engine: sources

Tax-exempt interest (§103) enters Social Security provisional income (§86(b)(2)(B)) but not taxable income

Used by: Tax-exempt interest. Status: verified.

• 26 U.S. Code § 103 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  gross income does not include interest on any State or local bond
• 26 U.S. Code § 86 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  the amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax

Added 2026-09-28 (A1/DOC1): a source for a Form 1040 composition step of the federal engine; every quote checked with scripts/check_state_tax_sources.py --url/--expect.

Form 1040 and schedules: the line each engine value is reported on (TY2025 forms; the TY2026 forms are not yet published)

Used by: Tax-exempt interest; IRA distributions and Roth conversions; Pensions and annuities; Social Security benefits; Taxable Social Security (the Pub 915 worksheet); Net short-term gain or loss; Net long-term gain or loss; Combined net gain or loss; Line 7a: a net loss enters as zero; Other ordinary income; Total income; Adjusted gross income; Standard deduction and the §63(f) aged amount; The senior deduction (Schedule 1-A); Additional deductions on line 13b; Total deductions; Taxable income; Tax: the brackets and the capital-gains worksheet; The 10% additional tax on early distributions; Net investment income tax; Other taxes; Total tax. Status: verified.

• Form 1040 (2025): U.S. Individual Income Tax Return (Internal Revenue Service; record) checked 2026-09-28
  Tax-exempt interest; IRA distributions; Pensions and annuities; Social security benefits; Capital gain or (loss). Attach Schedule D if required; Additional income from Schedule 1, line 10; This is your total income; This is your adjusted gross income; Standard deduction or itemized deductions (from Schedule A); Additional deductions from Schedule 1-A, line 38; Add lines 12e, 13a, and 13b; This is your taxable income; Tax (see instructions); Other taxes, including self-employment tax, from Schedule 2, line 21; This is your total tax
• Schedule 1-A (Form 1040) (2025): Additional Deductions (Internal Revenue Service; record) checked 2026-09-28
  Enhanced deduction for seniors. Add lines 36a and 36b
• Schedule 2 (Form 1040) (2025): Additional Taxes (Internal Revenue Service; record) checked 2026-09-28
  Additional tax on IRAs or other tax-favored accounts; Net investment income tax. Attach Form 8960; These are your total other taxes
• Schedule D (Form 1040) (2025): Capital Gains and Losses (Internal Revenue Service; record) checked 2026-09-28
  Net short-term capital gain or (loss); Net long-term capital gain or (loss); Combine lines 7 and 15 and enter the result

Added 2026-09-28 (A1/DOC1): a source for a Form 1040 composition step of the federal engine; every quote checked with scripts/check_state_tax_sources.py --url/--expect.

IRA distributions are included in gross income (§408(d)(1))

Used by: IRA distributions and Roth conversions. Status: verified.

• 26 U.S. Code § 408 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  any amount paid or distributed out of an individual retirement plan shall be included in gross income by the payee or distributee

Added 2026-09-28 (A1/DOC1): a source for a Form 1040 composition step of the federal engine; every quote checked with scripts/check_state_tax_sources.py --url/--expect.

Pension and annuity payments are included in gross income (§72(a))

Used by: Pensions and annuities. Status: verified.

• 26 U.S. Code § 72 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  gross income includes any amount received as an annuity

Added 2026-09-28 (A1/DOC1): a source for a Form 1040 composition step of the federal engine; every quote checked with scripts/check_state_tax_sources.py --url/--expect.

SS taxability base / adjusted base §86(c)

Used by: Social Security benefits; Taxable Social Security (the Pub 915 worksheet). Status: verified.

• 26 U.S. Code § 86 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  (A) except as otherwise provided in this paragraph, $25,000, (B) $32,000 in the case of a joint return, and (C) zero; (A) except as otherwise provided in this paragraph, $34,000, (B) $44,000 in the case of a joint return

Pub 915 MFS lived-apart uses $25,000

Used by: Taxable Social Security (the Pub 915 worksheet). Status: verified.

• Publication 915, Social Security and Equivalent Railroad Retirement Benefits (Internal Revenue Service; record) checked 2026-09-28
  $25,000 if you are married filing separately and lived apart from your spouse for all of; $0 if you are married filing separately and lived with your spouse at any time during

Pub 915 currently shows the 2025 edition (same statutory amounts).

Net short-term, net long-term and net capital gain (§1222)

Used by: Net short-term gain or loss; Net long-term gain or loss; Combined net gain or loss. Status: verified.

• 26 U.S. Code § 1222 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  the excess of short-term capital gains for the taxable year over the short-term capital losses for such year; the excess of long-term capital gains for the taxable year over the long-term capital losses for such year; the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges

Added 2026-09-28 (A1/DOC1): a source for a Form 1040 composition step of the federal engine; every quote checked with scripts/check_state_tax_sources.py --url/--expect.

§1211(b) capital loss limit

Used by: Line 7a: a net loss enters as zero. Status: verified.

• 26 U.S. Code § 1211 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  the lower of- (1) $3,000 ($1,500 in the case of a married individual filing a separate return)

Gross income (§61)

Used by: Other ordinary income; Total income. Status: verified.

• 26 U.S. Code § 61 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  gross income means all income from whatever source derived

Added 2026-09-28 (A1/DOC1): a source for a Form 1040 composition step of the federal engine; every quote checked with scripts/check_state_tax_sources.py --url/--expect.

Adjusted gross income (§62)

Used by: Adjusted gross income. Status: verified.

• 26 U.S. Code § 62 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  in the case of an individual, gross income minus the following deductions

Added 2026-09-28 (A1/DOC1): a source for a Form 1040 composition step of the federal engine; every quote checked with scripts/check_state_tax_sources.py --url/--expect.

2026 standard deduction

Used by: Standard deduction and the §63(f) aged amount. Status: verified.

• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments) (Internal Revenue Service; record) checked 2026-09-28
  Married Individuals Filing Joint Returns and Surviving Spouses (§ 1(j)(2)(A)) $32,200 Heads of Households (§ 1(j)(2)(B)) $24,150; (§ 1(j)(2)(C)) $16,100 Married Individuals Filing Separate Returns (§ 1(j)(2)(D)) $16,100

Rev. Proc. 2025-32 §4.14(1).

§63(f) additional std deduction aged/blind 2026

Used by: Standard deduction and the §63(f) aged amount. Status: verified.

• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments) (Internal Revenue Service; record) checked 2026-09-28
  the additional standard deduction amount under § 63(f) for the aged or the blind is $1,650. The additional standard deduction amount is increased to $2,050 if the individual is also unmarried and not a surviving spouse

Rev. Proc. 2025-32 §4.14(3) (section 4 holds the 2026 items). Code comments and the standard-deduction pages cited the 2025 section (3); corrected 2026-09-28.

OBBBA senior deduction §151(d)(5)(C)

Used by: The senior deduction (Schedule 1-A). Status: verified.

• 26 U.S. Code § 151 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  In the case of a taxable year beginning before January 1, 2029, there shall be allowed a deduction in an amount equal to $6,000 for each qualified individual; reduced (but not below zero) by 6 percent of so much of the taxpayer's modified adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return); this subparagraph shall apply only if the taxpayer and the taxpayer's spouse file a joint return

Codified at IRC §151(d)(5)(C) (added by OBBBA §70103): (C)(i)-(ii) amount per qualified individual, (C)(iii)(I) the 6% phase-out, (C)(v) joint-return requirement. Code comments cited subparagraphs (A)/(B); corrected 2026-09-28.

OBBBA §70103 effective date (2025 start)

Used by: The senior deduction (Schedule 1-A). Status: verified.

• Public Law 119-21 (One Big Beautiful Bill Act), enrolled text (U.S. Government Publishing Office (govinfo); record) checked 2026-09-28
  SEC. 70103. TERMINATION OF DEDUCTION FOR PERSONAL EXEMPTIONS OTHER THAN TEMPORARY SENIOR DEDUCTION; The amendments made by this section shall apply to taxable years beginning after December 31, 2024. SEC. 70104

IRS: senior deduction per individual ($12,000 couple), 2025-2028

Used by: The senior deduction (Schedule 1-A). Status: verified.

• Working Families Tax Cuts: tax deductions for working Americans and seniors (Internal Revenue Service (newsroom); record) checked 2026-09-28
  Effective for 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000; $12,000 total for a married couple where both spouses qualify

URL redirects from the old one-big-beautiful-bill-* slug.

Taxable income (§63(a), (b))

Used by: Total deductions; Taxable income. Status: verified.

• 26 U.S. Code § 63 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  gross income minus the deductions allowed by this chapter; adjusted gross income, minus

Added 2026-09-28 (A1/DOC1): a source for a Form 1040 composition step of the federal engine; every quote checked with scripts/check_state_tax_sources.py --url/--expect.

2026 ordinary brackets Single

Used by: Tax: the brackets and the capital-gains worksheet. Status: verified.

• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments) (Internal Revenue Service; record) checked 2026-09-28
  TABLE 3 - Section 1(j)(2)(C) - Unmarried Individuals (other than Surviving Spouses and Heads of Households) If Taxable Income Is: The Tax Is: Not over $12,400; Over $105,700 but not over $201,775 $17,966 plus 24%; Over $201,775 but not over $256,225 $41,024 plus 32%; Over $256,225 but not over $640,600 Over $640,600 $58,448 plus 35% of the excess over $256,225 $192,979.25 plus 37% of the excess over $640,600

PDF column order interleaves the last two Single rows; snippet matches the extracted order.

2026 ordinary brackets MFJ

Used by: Tax: the brackets and the capital-gains worksheet. Status: verified.

• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments) (Internal Revenue Service; record) checked 2026-09-28
  Not over $24,800 10% of the taxable income; Over $24,800 but not over $100,800 $2,480 plus 12% of the excess over $24,800; Over $403,550 but not over $512,450 $82,048 plus 32% of the excess over $403,550; Over $512,450 but not over $768,700 $116,896 plus 35%; Over $768,700 $206,583.50 plus 37% of the excess over $768,700; $35,932 plus 24% of the excess over $211,400

2026 ordinary brackets MFS

Used by: Tax: the brackets and the capital-gains worksheet. Status: verified.

• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments) (Internal Revenue Service; record) checked 2026-09-28
  Over $256,225 but not over $384,350 $58,448 plus 35% of the excess over $256,225; Over $384,350 $103,291.75 plus 37% of the excess over $384,350

2026 ordinary brackets HOH

Used by: Tax: the brackets and the capital-gains worksheet. Status: verified.

• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments) (Internal Revenue Service; record) checked 2026-09-28
  Not over $17,700 10% of the taxable income; Over $17,700 but not over $67,450 $1,770 plus 12%; Over $67,450 but not over $105,700 $7,740 plus 22%; Over $105,700 but not over $201,750 $16,155 plus 24%; Over $201,750 but not over $256,200 $39,207 plus 32%; Over $256,200 but not over $640,600 $56,631 plus 35%; Over $640,600 $191,171 plus 37%

2026 LTCG 0%/15% max amounts

Used by: Tax: the brackets and the capital-gains worksheet. Status: verified.

• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments) (Internal Revenue Service; record) checked 2026-09-28
  Married Individuals Filing Joint Returns and Surviving Spouse $98,900 $613,700 Married Individuals Filing Separate Returns $49,450 $306,850 Heads of Household $66,200 $579,600 All Other Individuals $49,450 $545,500

§4.03.

§72(t) 10% additional tax; 59½ exception

Used by: The 10% additional tax on early distributions. Status: verified.

• 26 U.S. Code § 72 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  shall be increased by an amount equal to 10 percent of the portion of such amount which is includible in gross income; made on or after the date on which the employee attains age 59½

Engine applies the penalty through END-OF-YEAR age 59 and waives it from EOY age 60 (conservative annual approximation of 59½). Only the 59½ exception is modelled (not SEPP, separation at 55, etc.). TaxConfig.early_withdrawal_penalty_age = 59 is informational only.

NIIT §1411 rate and thresholds

Used by: Net investment income tax. Status: verified.

• 26 U.S. Code § 1411 (Cornell Legal Information Institute (text of the U.S. Code, Title 26); record) checked 2026-09-28
  a tax equal to 3.8 percent of the lesser of; in the case of a taxpayer making a joint return under section 6013 or a surviving spouse (as defined in section 2(a)), $250,000; ½ of the dollar amount determined under paragraph (1); in any other case, $200,000

NIIT IRS page

Used by: Net investment income tax. Status: verified.

• Net Investment Income Tax (Internal Revenue Service; record) checked 2026-09-28
  Married filing jointly - $250,000, Married filing separately - $125,000, Single or head of household - $200,000