A new $6,000 tax deduction (or $12,000 for married couples) is the real reason most seniors won’t pay taxes on Social Security benefits under Donald Trump’s “One Big Beautiful Bill”.
Available through 2028 to those 65+ earning ≤$75,000 individually or ≤$150,000 jointly, this deduction lowers taxable income so much that for 88% of seniors, up from 64%, their benefits effectively become tax-free.
But the law doesn’t eliminate Social Security taxes directly; it just makes them disappear for many through this backdoor method.
Middle-income seniors gain most; low and high earners see little change
The biggest winners are middle-income seniors. Those earning $50,000–$200,000 could see taxes on benefits reduced or erased because the deduction lowers their “combined income” used to calculate taxes. However:
- Low-income seniors already paying $0, gain nothing
- Under-65 beneficiaries (e.g., disability recipients) are ineligible
- High earners above $175,000 (single) or $250,000 (couples) get no break
- The Tax Foundation confirms this helps “lower-middle and middle-income taxpayers most.”
Why the Social Security Administration sparked controversy
The SSA emailed millions claiming the law “eliminates federal income taxes on Social Security benefits”, calling it “historic relief for seniors”.
Experts slammed this as misleading and politically charged for a typically neutral agency.
Former SSA officials noted emails like this blur trust in government communications and risk confusing vulnerable seniors . While the White House stands by its “88%” claim, tax analysts stress the deduction only indirectly affects benefit taxes, according to recent reports.
Though senior citizens save money now, the program faces accelerated financial risk. The $30 billion/year revenue loss from fewer taxed benefits could drain Social Security’s trust fund by late 2032, a year earlier than projected.
Since taxes on benefits fund Social Security and Medicare, this “relief” deepens the program’s $22.4 trillion funding gap.
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