President Trump keeps telling voters that his 2024 tax plan will mitigate taxes on Social Security. But while it does offer some relief for seniors, it falls well short of fully getting rid of those taxes
Trump has been repeating the line that his bill means “no tax on tips, no tax on Social Security, no tax on overtime,” even saying it on Fox News’ Sunday Morning Futures, but the actual legislation doesn’t quite back that up.
What’s Actually in the Bill?
Versions of the bill has been passed by The House and Senate, and each includes a temporary tax deduction for seniors ages 65 and older. But this deduction isn’t specific to Social Security income, it applies to general income and only for a limited time.
The Senate plan includes a $6,000 deduction for seniors, while the House version offers $4,000. Both would kick in starting in 2025 and run through 2029. But not everyone qualifies. Seniors with higher incomes would see the deduction shrink or disappear, and those with very low incomes, who already don’t pay taxes on their benefits, wouldn’t see any change. The same goes for people who started collecting Social Security before age 65.
Who Actually Benefits?
According to the Senate version, seniors earning up to $75,000 (or $150,000 for married couples filing jointly) would qualify for the full deduction. As income rises above those limits, the benefit tapers off.
The White House is pitching this as a big win for seniors, pointing to numbers from the Council of Economic Advisers that say 88% of Social Security recipients won’t pay taxes on their benefits. But that includes people who already don’t pay any taxes to begin with. Overall, they estimate around 33.9 million seniors, including some not even collecting Social Security yet, would benefit from the deduction, with an average boost of about $670 in after-tax income.
Experts Call Out Misleading Messaging
Some tax experts say the messaging around the bill is misleading. Garrett Watson from the Tax Foundation pointed out that telling people Social Security taxes are being eliminated could cause confusion, or frustration, when seniors realize the break isn’t as big as they were led to believe.
“While the deduction does provide some relief for seniors, it’s far from completely repealing the tax on their benefits,” Watson explained.
The Cost of a Full Repeal
Getting rid of taxes on Social Security altogether would come with a big cost. Analysts at the Penn Wharton Budget Model say it would cut federal revenue by $1.5 trillion over the next decade and drive up the national debt by 7% by 2054. It could also cause the Social Security Trust Fund to run out two years earlier, by 2032 instead of 2034. And that’s just part of it. The Congressional Budget Office (CBO) says the Senate’s overall tax plan would add about $3.3 trillion to the deficit between 2025 and 2034.
Tariffs to the Rescue?
To mitigate the extensive costs, Trump’s administration is relying on increased revenue from tariffs. The CBO recently estimated that Trump’s proposed tariffs could reduce the deficit by $2.8 trillion over the next decade.
But there’s a trade-off. The CBO says those tariffs could slow down the economy, drive up prices, and squeeze household budgets, especially for low- and middle-income families.
Bottom Line
Regardless of the big promises, the bill doesn’t actually get rid of taxes on Social Security. It provides the elderly population with a temporary relief, but the benefits are limited and won’t last. And while the White House is calling it a big win, the bigger picture, including the costs and long-term impact, tells a more complicated story.