Has the New Law Ended Taxes on Social Security?
You may’ve heard the latest tax-and-spending law, signed by President Trump on July 4th, gives seniors a break on Social Security. But the truth is a bit more nuanced—and worth unpacking for everyone in our community.
The legislation does not eliminate Social Security taxes outright. What it does do is grant a temporary deduction for retirees 65 and older—as much as $6,000 per person, or $12,000 for married couples filing jointly, provided your income stays below $75,000 (single) or $150,000 (joint). That means you get to apply this deduction to your taxable income, which might reduce or eliminate the federal tax you owe on your Social Security benefits for now. However, this doesn’t change the rules around when or how Social Security itself gets taxed—it just gives seniors an extra deduction on their returns until 2028. So technically, Social Security is still taxed, but fewer people pay when this deduction knocks their income below the taxable threshold.
Just after the law passed, the Social Security Administration (SSA) sent an email and posted a statement saying the law “eliminates federal income taxes on Social Security benefits for most beneficiaries.” That was a confusing message. The SSA didn’t create the rule—it was passed in Congress. And experts quickly pointed out it’s not a tax repeal, but a temporary deduction that happens to reduce taxable income so effectively, many seniors won’t owe anything.
The experts described this SSA message as “confusing” and worth clarifying for seniors who aren’t tax experts. Essentially, it’s a deduction—one that’s big enough to offset the taxes on Social Security for about 9 in 10 recipients, but a deduction nonetheless, not a full repeal.
This change clearly favors retirees with middle to upper incomes—those who previously paid taxes on their benefits. Experts say it’s not much help for the lowest-income seniors (who were already exempt from paying Social Security tax), but can save $1,000–$2,000 per year for folks in the $75k–$150k joint-income band. Still, the deduction phases out entirely if you earn over $175,000 individually or $250,000 jointly.
So no, Social Security isn’t suddenly tax-free. But for the next few years, many seniors will higher deductions. It’s a win for many retirees, but it’s not permanent, and it doesn’t apply equally to everyone. if you receive Social Security and are unsure how this new law affects you, talk to your tax professional.