Additional Coverage:
SSA Email Misleads Seniors on Tax Relief Bill
A recent email from the Social Security Administration (SSA) has drawn criticism for misrepresenting the impact of the new tax law on seniors. The email, touting President Trump’s “big beautiful bill,” claimed it would eliminate federal income taxes on Social Security benefits for nearly 90% of beneficiaries, thanks to a new $6,000 senior deduction. Tax experts say this is inaccurate.
The legislation does not eliminate taxes on Social Security benefits. While the SSA memo claims the law protects Social Security, experts contend it actually weakens the program’s funding by reducing tax revenue.
“It’s simply not correct,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center, adding that the claim of preserving Social Security’s solvency is also false. The SSA and White House did not respond to requests for comment.
The $6,000 Senior Deduction: A Closer Look
The new tax law includes an additional deduction of up to $6,000 for those 65 and older, effective from 2025 through 2028. While referred to as a “bonus,” it is a deduction that reduces taxable income, not a direct payment.
Eligibility is income-based, with the full deduction available to taxpayers with modified adjusted gross income up to $75,000 (or $150,000 for joint filers). The deduction phases out at higher income levels.
How the Deduction Affects Social Security Taxes
The new deduction may indirectly lower taxes on Social Security benefits for some seniors. Social Security benefits are taxed based on “combined income.”
The new deduction, being “above-the-line,” reduces adjusted gross income, which is a component of combined income. This can, in turn, lower the taxable portion of Social Security benefits.
Who Benefits?
The deduction is most likely to benefit middle-income seniors. Those with lower incomes already avoid taxes on their benefits, while high earners may not qualify for the full deduction or any at all. Even for those who qualify, the deduction reduces, but doesn’t eliminate, the tax.
Impact on Social Security Funding
While potentially beneficial to some seniors, the new deduction, along with other tax changes, is projected to reduce Social Security tax revenue by approximately $30 billion annually, according to the Committee for a Responsible Federal Budget (CRFB). This could accelerate the insolvency of the Social Security trust fund. The CRFB stresses the need for Congressional action to address Social Security’s long-term financial health, either through tax increases, benefit cuts, or a combination of both.