President Donald Trump advocated for the elimination of federal income taxes on Social Security benefits during his 2024 campaign. However, the tax legislation recently passed by the House—known as the “One Big Beautiful Bill“—does not include this provision. The exclusion stems from Senate rules governing the budget reconciliation process, which restrict changes to Social Security programs. Instead, the bill introduces a temporary $4,000 tax deduction for seniors aged 65 and older, effective from 2025 through 2028, with income-based eligibility limits.
- Trump’s new tax bill does not eliminate taxes on Social Security benefits, despite earlier campaign promises.
- Instead, it offers a temporary $4,000 standard deduction for seniors aged 65 and older from 2025 to 2028.
- Repealing Social Security taxes would mostly benefit higher-income retirees and reduce federal revenue by about $1.6 trillion over 10 years.
Is Trump Eliminating Taxes on Social Security Benefits?
During his 2024 campaign, Donald Trump expressed opposition to taxing Social Security benefits, stating on Truth Social, “SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!” He reiterated this stance in his 2025 State of the Union address, advocating for “no tax on tips, no tax on overtime and no tax on Social Security benefits for our great seniors.”
Despite these declarations, the “One Big Beautiful Bill” passed by the House in May 2025 does not eliminate taxes on Social Security benefits. Instead, it introduces a temporary $4,000 enhanced standard deduction for seniors aged 65 and older, effective from 2025 through 2028, with income-based eligibility limits. The exclusion of the Social Security tax repeal is attributed to Senate budget reconciliation rules, which prohibit changes to Social Security programs through this legislative process.
Analyses indicate that repealing taxes on Social Security benefits would primarily benefit higher income retirees. Further, it could reduce federal revenue by approximately $1.6 trillion over the next decade, potentially accelerating the insolvency of the Social Security trust fund.
How Social Security Benefits Get Taxed
Social Security benefits can be subject to federal income tax depending on your combined income. This includes your adjusted gross income (AGI), any nontaxable interest and half of your Social Security benefits.
If you file as an individual and your combined income is between $25,000 and $34,000, up to 50% of your benefits may be taxable. If your income exceeds $34,000, up to 85% of your benefits may be taxed. For married couples filing jointly, the thresholds are $32,000 and $44,000, respectively.
Take, for example, a couple with $30,000 in AGI, $2,000 in tax-exempt interest and $24,000 in annual benefits. They would have a combined income of more than $44,000, putting them at the threshold where up to 85% of their benefits could be taxable.
Taxes on Social Security are not withheld automatically unless requested. Beneficiaries can choose to have federal taxes withheld at 7%, 10%, 12% or 22%. Alternatively, they can make estimated tax payments throughout the year.
At the state level, most states do not tax Social Security benefits. However, some states do, although often with exemptions or income limits. These states are Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia. Because rules vary widely, the impact depends on your state of residence.
These tax rules have been in place since 1984, when Congress first made a portion of benefits taxable to help fund the Social Security program. The 85% threshold was added in 1993. Despite periodic proposals to adjust or eliminate these taxes, the rules have remained largely unchanged, even as average benefit amounts and retiree incomes have risen over time.
How Expanded Standard Deduction Would Impact Seniors
The “One Big Beautiful Bill” includes a temporary increase to the standard deduction for taxpayers aged 65 and older. Under the proposal, seniors would receive an additional $4,000 deduction on top of their regular standard deduction. This enhancement would apply for tax years 2025 through 2028.
Eligibility for the deduction is income-limited. For single filers, the enhanced deduction phases out starting at $75,000 of modified adjusted gross income (MAGI). For married couples filing jointly, the phaseout begins at $150,000.
As an example, consider a married couple, both over age 65, with a combined MAGI of $150,000 in 2025. Under existing rules, their standard deduction would be $33,200. With the $4,000 enhancement, their deduction would increase to $37,200. That additional $4,000 deduction reduces their taxable income from $116,800 to $112,800. Since this couple falls in the 24% tax bracket, the change lowers their federal tax liability by $880. While it doesn’t exempt Social Security income from taxation, it does provide modest tax relief to seniors within the eligible income range.
Bottom Line
Trump’s “One Big Beautiful Bill” introduces a temporary $4,000 tax deduction for seniors aged 65 and older, applicable from 2025 through 2028. This provision aims to reduce taxable income for eligible seniors, offering some financial relief. However, the bill does not eliminate taxes on Social Security benefits, a change that would require separate legislative action. The bill now awaits consideration in the Senate, where further deliberations will determine its final form.
Retirement Planning Tips
- A financial advisor can help you mitigate risk for your portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Mandatory distributions from a tax-deferred retirement account can complicate your post-retirement tax planning. Use SmartAsset’s RMD calculator to see how much your required minimum distributions will be.
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