"Big, beautiful bill" gives some seniors hefty tax break
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The "big, beautiful bill" features a new tax break for older Americans who pay taxes on Social Security income. But there's a significant catch.
Why it matters: The break leaves out the poorest seniors — who already don't pay Social Security taxes —and the very rich ones, too.
How it works: Both the House and Senate bills include an increased tax deduction for tax filers age 65 and older. In the Senate version, the new deduction is $6,000 for individuals and $12,000 for couples.
- The deduction starts phasing out for those who earn over $75,000 ($150,000 for couples), and phases out completely at $175,000 for individuals and $250,000 for couples, in the Senate version.
- The break expires in 2028 when President Trump leaves office, as do a few other White House priorities in the bills, including no tax on tips, no tax on overtime, and no tax on auto loan interest.
What they're saying: "This amounts to the largest tax break in American history for our nation's seniors," per a report out earlier this week from the White House Council of Economic Advisers.
Yes, but: Most seniors — 64% of them — don't pay taxes on Social Security, according to the White House's own analysis.
- Those who can't afford the taxes already don't pay. This break targets most, but not all, of the rest.
Between the lines: Trump promised to eliminate taxes on Social Security income. Lawmakers couldn't pull that off entirely, given the constraints of passing a reconciliation bill and changing Social Security law.
- This break comes close. After adding the recipients of the new tax break, 88% of seniors wouldn't pay Social Security tax, per the White House.
- "The One Big Beautiful Bill delivers on President Trump's promise of no tax on Social Security," White House spokeswoman Abigail Jackson says in a statement, noting the analysis by the Council of Economic Advisers.
Zoom out: For those upper-middle class folks who pay taxes on retirement benefits, this is a "substantial tax break," says Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, a nonpartisan group that advocates for fiscal responsibility.
- For the several million senior citizens who live in poverty, and already don't pay taxes on Social Security, this doesn't help.
- The bill would also accelerate Social Security and Medicare insolvency by a year, to 2032, per an analysis from the group.
The bottom line: Seniors in the U.S. overall are doing great financially right now, sitting on assets that have soared in value in recent years.
- "As a whole seniors in this country are the wealthiest cohort in the history of the known universe," Goldwein says.
- If this bill passes, they'll get to keep a little bit more.
Editor's note: This story was corrected to show the increased tax deduction in both bills applied to tax filers age 65 and older (not 64 and older).
