Social Security Applauds Passage of Legislation Providing Historic Tax Relief for Seniors
Reading Time: 1 MinuteLast Updated: July 7, 2025
The Social Security Administration (SSA) is celebrating the passage of the One Big, Beautiful Bill, a landmark piece of legislation that delivers long-awaited tax relief to millions of older Americans.
The bill ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits, providing meaningful and immediate relief to seniors who have spent a lifetime contributing to our nation’s economy.
“This is a historic step forward for America’s seniors,” said Social Security Commissioner Frank Bisignano. “For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans. By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump’s promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they’ve earned.”
The new law includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries, providing relief to individuals and couples. It does so by providing an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they earned.
Social Security remains committed to providing timely, accurate information to the public and will continue working closely with federal partners to ensure beneficiaries understand how this legislation may affect them.
For more information about Social Security programs and benefits, visit www.ssa.gov.
Correction Notice: This blog was updated on July 7, 2025. The second sentence of the fourth paragraph originally read, “Additionally, it provides an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they have earned.”
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Beth P.
Sounds great with one exception. We are not being told in both the press and public releases and I would like to know how “most” beneficiaries are defined? Is it based on amount of income or age? If so, what amount does eligibility begin and end? Thank you for keeping the senior population in mind with at least regard to tax breaks.
Robert C.
What is the income cut-off for not paying taxes on Social Security Benefits? And it you are over that income limit will you only being paying taxes on the amount above the limit?
Tim S.
Robert, according to Epoch Times, this benefit starts to phase out for total taxable income over $75k single/$150k joint filers and is totally gone for over $175k single/$250k joint.
Robert S.
When will they finish the windfall for all people who worked for an entity that only had pensions.
Susan
I don’t think there is an end date. I waited 13 yrs for congress to realize that it was unfair to withhold funds just because I earned another pension elsewhere. I worked and earned those funds. In everything that was sent to me, there was no mention of an end date that I can remember.
Dan G.
The WEP was recently repealed. Surprised you didn’t know.
Your N.
Bullshit.
Trump keeps saying the GOP mega bill will eliminate taxes on Social Security. It does not
WASHINGTON (AP) — President Donald Trump keeps saying that Republicans’ mega tax and spending cut legislation will eliminate taxes on federal Social Security benefits.
It does not.
At best, Trump’s “no tax on Social Security” claim exaggerates the benefits to seniors if either the House or Senate-passed proposals is signed into law.
Here’s a look at Trump’s recent statements, and what the proposals would — or would not — do.
What Trump has said
Trump repeatedly told voters during his 2024 campaign that he would eliminate taxes on Social Security. As his massive legislative package has moved through Congress, the Republican president has claimed that’s what the bill would do.
Trump said on a recent appearance on Fox News’ “Sunday Morning Futures” that the bill includes “no tax on tips, no tax on Social Security, no tax on overtime.”
A temporary tax deduction
But instead of eliminating the tax, the Senate and House have each passed their own versions of a temporary tax deduction for seniors aged 65 and over, which applies to all income — not just Social Security.
And it turns out not all Social Security beneficiaries will be able to claim the deduction. Those who won’t be able to do so include the lowest-income seniors who already don’t pay taxes on Social Security, those who choose to claim their benefits before they reach age 65 and those above a defined income threshold.
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The Senate proposal includes a temporary $6,000 deduction for seniors over the age of 65, contrasted with the House proposal, which includes a temporary deduction of $4,000.
The Senate proposal approved Tuesday would eliminate Social Security tax liability for seniors with adjusted gross incomes of $75,000 or less or $150,000 if filing as a married couple.
If passed into law, the tax deduction would last four years, from 2025 to 2029.
The deductions phase out as income increases.
White House touts impact
Touting a new Council of Economic Advisers analysis, the White House said Tuesday that “88% of all seniors who receive Social Security — will pay NO TAX on their Social Security benefits,” going on to say that the Senate proposal’s $6,000 senior deduction “is estimated to benefit 33.9 million seniors, including seniors not claiming Social Security. The deduction yields an average increase in after-tax income of $670 per senior who benefits from it.”
Garrett Watson, director of policy analysis at the Tax Foundation think tank, said conflating the tax deduction with a claim that there will be no tax on Social Security could end up confusing and angering a lot of seniors who will expect to not pay taxes on their Social Security benefits.
“While the deduction does provide some relief for seniors, it’s far from completely repealing the tax on their benefits,” Watson said.
Economic effect
The cost of actually eliminating the tax on Social Security would have massive impacts on the economy.
University of Pennsylvania’s Penn Wharton Budget Model estimates that eliminating income taxes on Social Security benefits “would reduce revenues by $1.5 trillion over 10 years and increase federal debt by 7 percent by 2054″ and speed up the projected depletion date of the Social Security Trust Fund from 2034 to 2032.
Discussions over taxes on Social Security are just part of the overall bill, which is estimated in its Senate version to increase federal deficits over the next 10 years by nearly $3.3 trillion from 2025 to 2034, according to the Congressional Budget Office.
Administration officials have said the cost of the tax bill would be offset by tariff income.
Recently, the CBO separately estimated that Trump’s sweeping tariff plan would cut deficits by $2.8 trillion over a 10-year period while shrinking the economy, raising the inflation rate and reducing the purchasing power of households overall.
Bruce G.
I’m confused. Does the BBB eliminate the taxes on 85% of SS benefits, PLUS provide additional tax relief for us seniors, or am I not getting the picture?
Hugh S.
The problem is that the date the reserves are eaten up has increased by approx 1 year because of this change. So if any is still alive by 2032 they will only receive 72% of their earned benefit. TS.
JAMES
Where are the specifics? What exactly is the benefit? Who receives it? Where will it show up on our return?
Daryl R.
I would like the details of the tax benefits. Maybe a link to the portion of the OBBB that provides the details of the impact on seniors.
William M.
My previous comment I said 80% and it’s 90%
Frank L.
There are no specifics as to who the 90% are. Basically useless.
Mark H.
This is certainly welcomed news to us seniors who are currently retired. When does this take effect and what are the restrictions?
Jeremy
$6k deduction for the next 3 years when you do your taxes if you are over 65 years old. Expires in 2029