The One Big Beautiful Bill Act was passed in Congress a few days ago and will be officially signed into law by President Donald Trump in a White House ceremony this upcoming Friday. Under this new tax and reconciliation package that could be considered a mega bill as it spans some 1,000 pages, the elimination of taxes on Social Security benefits has not been included. Despite the many promises to eliminate taxes on benefits made by President Donald Trump during his campaigning period in 2024, this mega bill — even the initial draft — did not contain any proposals to eliminate taxes on benefits.
Despite this, senior citizens aged 65 and older will still stand to benefit from an increased tax deduction for a temporary period under the One Big Beautiful Bill Act. Here is what you need to know.
Social Security tax and the One Big Beautiful Bill Act
In a ceremony at the White House, President Trump said, “We’ve delivered no tax on tips, no tax on overtime and no tax on Social Security for our great seniors.” With regards to the matter of taxes on Social Security benefits, however, this statement may come across as somewhat misleading. This is because taxes on benefits have not been eliminated under the One Big Beautiful Bill Act.
Due to a parliamentary process known as the “Byrd bath,” named after late Sen. Robert Byrd, D-W.Va, the complete elimination of taxes on Social Security benefits will not be able to pass. Instead, a change has been made to the taxable income threshold for seniors and as a result, a larger group of seniors will no longer have to pay taxes on their benefits.
Under this new bill, seniors aged 65 and above who are filing individually will qualify for an additional $6,000 tax break if their income is $75,000 or lower. In the case of joint filers, the additional tax deduction amounts to $12,000, provided their joint income is $175,000 or lower. This additional tax deduction is meant to be a temporary source of tax relief for these seniors and as such, it will only be in effect starting in the tax year 2026, and will subsequently end in 2028. According to the White House, “88% of seniors receiving Social Security benefits will pay no tax on their benefits under the OBBB as a result of their total deductions exceeding their taxable Social Security benefits.”
Additionally, “if existing law remains in place, about 27 million tax returns would include some amount of income tax owed on Social Security benefits in 2026,” according to a May statement from Thomas A. Barthold, the chief of staff for the Joint Committee on Taxation.
“This is a historic step forward for America’s seniors,” recently appointed SSA Commissioner Frank Bisignano said. “By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump’s promise to protect social security and helps ensure that seniors can better enjoy the retirement they’ve earned.”
Former SSA officials criticize claims regarding the OBBBA
According to an email that had recently circulated from the Social Security Administration (SSA), the OBBBA “eliminates federal income taxes on social security benefits for most beneficiaries, providing relief to individuals and couples.” However, as stated above, this is not the case — it is merely the taxable income threshold that has changed. As such, the misleading framing of the tax break under the OBBBA has sparked some criticism from former SSA officials.
“People are like: ‘Is this real? Is this a scam?’ Because it’s not what they signed up for,” former senior adviser at the SSA under the Biden Administration, Kathleen Romig said to CNN. “It doesn’t sound like normal government communications, official communications. It sounds like – you know – partisan.”
Additionally, a top SSA official who had served under both Democratic and Republican presidents made a post on social media platform, X, that stated, “The agency has never issued such a blatant political statement. The fact that Trump and his minion running SSA has done this is unconscionable.”