Social Security is impacted by Trump's tax bill: What to know
The bill passed by the House would raise the standard deduction by up to $4,000 for those 65 and over, starting in 2025 to 2028.
www.newsweek.com
The sweeping tax and spending bill backed by President Donald Trump includes significant changes to the U.S. tax code and public benefit programs, and Social Security beneficiaries will be affected.
Why It Matters
Trump's One Big Beautiful Bill Act is currently being considered in the Senate, after passing the House of Representatives in a 215–214 vote in May.Trump had pledged to eliminate federal taxes on Social Security benefits, a move that would mark a major policy shift for retirees.
While the bill does not eliminate those taxes, it includes a temporary increase to the standard deduction for older Americans—a change that could lower taxable income for Social Security recipients.
President Donald Trump speaking in the White House in Washington D.C. in May. Andrew Harnik/GETTY
What to Know
The bill passed by the House would raise the standard deduction by up to $4,000 for people aged 65 and over, starting in 2025 through 2028. This change, though not targeted directly at Social Security income, could effectively reduce the taxable burden for retirees whose total income, including benefits, is modest.The deduction begins to phase out at $75,000 for individuals, and $150,000 for married couples filing jointly, making it less relevant for higher-income seniors.
The proposal now heads to the Senate, where modifications are possible before the legislation reaches Trump's desk.
The bill would not cancel federal taxes applied to benefits entirely, but it would reduce them for a significant proportion of Americans. Up to 85 percent of Social Security benefits are currently taxable for individuals with an income of more than $34,000, or a couple with a combined income of $44,000 or more.
What People Are Saying
Trump celebrated the bill's passage in the House, urging swift Senate approval. "It's time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE!" he posted on Truth Social in May.House Ways and Means Committee Chairman Jason Smith said in a statement in May: "Seniors spent the last four years struggling to make ends meet under Biden's out-of-control inflation. Republicans are keeping President Trump's promise to help seniors afford the cost of living through an expanded senior deduction in The One, Big, Beautiful Bill. This bill helps low- and middle-income seniors like my aunt who worked as a Walmart greeter to supplement her Social Security check. By keeping his promise to help seniors, President Trump is ensuring millions more Americans will be able to afford groceries and medication and enjoy a dignified retirement."
Critics, however, point to the cuts affecting adjacent benefits like Medicaid, which serves millions of low-income seniors.
House Minority Leader Hakeem Jeffries called the bill a "reckless, regressive and reprehensible GOP tax scam," and vowed to use it against Republicans in the upcoming midterm election cycle.
Karla Dennis, a tax adviser and the CEO of the tax strategy firm KDA Inc., told Newsweek that while the plan "sounds nice" it is a "short-term fix" that "doesn't solve the bigger problem."
"Getting rid of taxes on Social Security would make things a lot easier for retirees. Many seniors don't expect to owe taxes in retirement, and this would help prevent surprise bills. In the end, we need real change that lasts, not just one-time payouts. Seniors deserve long-term relief they can count on."
