- The recently passed "Big Beautiful Bill" does not eliminate taxes on Social Security benefits.
- The legislation provides a tax deduction of up to $6,000 for eligible seniors.
- This tax deduction can cover the income tax on Social Security benefits.
The House of Representatives and the Senate combined this month to pass the massive tax package known as the “One Big Beautiful Bill,” which includes a new tax deduction for seniors.
The bill provides another $6,000 tax deduction on Social Security benefits, on top of the existing deductions already in place, which fluctuate based on marital status and income.
After the bill passed through Congress, the White House shared a July 1 press release which said:
“Under the One Big Beautiful Bill, the vast majority of senior citizens — 88% of all seniors who receive Social Security — will pay NO TAX on their Social Security benefits, according to a brand new analysis from the Council of Economic Advisers."
But will the legislation really eliminate the tax on Social Security benefits? Here is a look at how the legislation applies to Social Security and how it will impact seniors.
Does the ‘Big Beautiful Bill’ get rid of taxes on Social Security benefits?
Following the passage of what is known as the “One Big Beautiful Bill,” the Social Security Administration sent out an email and press release that some tax experts say could be misleading, according to CNBC.
While the new legislation increases the deduction for Social Security taxes from 2025-2028, it wouldn’t be possible for the bill to eliminate taxes on Social Security benefits, because of restrictions on what can be included in a budget reconciliation like this legislation, according to CBS MoneyWatch.
While the bill does not eliminate the tax on Social Security benefits, the bill does provide a larger tax deduction for seniors who qualify.
Before the passage of the bill, 64% of seniors who receive Social Security benefits did not pay income tax on those benefits thanks to exemptions and deductions, per The Hill. The president’s Council of Economic Advisers estimates that number will be raised to 88% under the new legislation.
What does this tax cut look like?
The eligibility for the tax deduction for seniors through the Big Beautiful Bill depends on income.
For Americans 65 and older receiving Social Security benefits, they will be able to take up to an additional $6,000 tax deduction, depending on their income and marital status, according to the Tax Foundation.
The deduction will be available to taxpayers who take the standard deduction and those who itemize their returns.
“While the deduction does provide some relief for seniors, it’s far from completely repealing the tax on their benefits,” said Garrett Watson, director of policy analysis at the Tax Foundation think tank, per The Associated Press.
The full $6,000 deduction is available for single filers who earn less than $75,000 in combined income, and $150,000 for joint filers.
The deduction will start to decrease for those whose incomes are above those thresholds and will be $0 once combined incomes reach $175,000 for individuals and $250,000 for married couples.
The Tax Foundation has detailed information on how different tax filers will be affected.
“It’s been marketed as tax relief for seniors, but a lot of seniors are going to be surprised when they find out it doesn’t apply to them,” Watson added. “I’m getting asked all the time by folks what this actually means for their tax situation.”
Tax help for seniors
Anyone who is looking for help, assistance or advice for doing their taxes can look to a few different resources.
One resource local to Utah is Tax Help Utah, which provides free tax return preparation in the state through virtual and in person appointments.
The IRS also has a few different provided services.
VITA, or Volunteer Income Tax Assistance, provides free tax preparation services to elderly and low-income taxpayers. VITA sites can be contacted by calling 2-1-1 or 1-800-906-9887.
There is also TCE, or Tax Counseling for the Elderly, which provides free tax help to anyone but gives priority to seniors 60 years and older. For TCE call 1-888-227-7669.
AARP also provides free tax assistance through the AARP Foundation Tax-Aide.
