President Donald Trump officially signed into law his mega bill, the One Big Beautiful Bill Act on July 4th, and along with this new bill came claims that taxes on Social Security benefits have been eliminated despite this not being the case in actuality. Under this new bill, seniors aged 65 and above with a valid Social Security number will qualify for an additional $6,000 tax deduction if their income falls below a certain threshold.
This tax relief will be in effect for a temporary period ending in 2028, however, it appears that many official channels including the White House and the Social Security Administration (SSA) have been framing this tax break as the elimination of taxes on Social Security benefits — sparking major confusion and critique from many. Here is what you need to know.
Trump’s One Big Beautiful Bill Act has not eliminated taxes on Social Security benefits
In his 2024 presidential campaign, Donald Trump made a promise to eliminate taxes on Social Security benefits and whilst the elimination of taxes had not even been proposed in initial drafts of the new bill, the OBBBA is being framed as the elimination of taxes on benefits. Following this, a July 4th email from the SSA reiterated this narrative, stating that the OBBBA would “eliminate federal income taxes on Social Security benefits for most beneficiaries.”
“The bill ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits, providing meaningful and immediate relief to seniors who have spent a lifetime contributing to our nation’s economy,” the email read. In addition to the misleading narrative, the email further implied that not one, but two tax breaks would be given to seniors.
“The new law includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries, providing relief to individuals and couples. Additionally, it provides an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they have earned,” as per a copy of the email forwarded to USAToday.
Now, however, the SSA blog features the following correction notice wherein it seems that the word ‘additionally’ has been removed from the blog post. The correction notice reads as follows: “Correction Notice: This blog was updated on July 7, 2025. The second sentence of the fourth paragraph originally read, ‘Additionally, it provides an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they have earned.'”
The corrected statement on the SSA blog now reads as follows: “The new law includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries, providing relief to individuals and couples. It does so by providing an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they earned.”
Breakdown of the tax deduction
The tax relief for seniors included in the OBBBA is a tax break of $6,000 for individuals or $12,000 for joint filers. It only applies to seniors aged 65 or older and the tax break will be in effect starting in 2025 and ending in 2028. It is important to note that the tax relief only applies to seniors with a MAGI under $175,000 for individual taxpayers, and $250,000 for married joint taxpayers. The deduction will phase out at a rate of 6% percent for income surpassing this threshold.
“It’s fair to frame this new deduction as an attempt to fulfill the spirit of the president’s campaign proposal consistent with the limits imposed in the reconciliation process,” director of policy analysis at the nonpartisan Tax Foundation, Garrett Watson says. “But selling this politically as exempting Social Security from income tax is not accurate and will confuse or upset the seniors who end up paying tax on some benefits.”
As such, this OBBBA senior deduction will apply to any income earned by a taxpayer aged 65 or older which means that taxes on benefits will not necessarily be eliminated. “Despite the SSA claims, most would see their income taxes on Social Security benefits reduced, not eliminated,” stated Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center.
In fact, according to the Tax Policy Center, “the tax deduction of up to $6,000 would benefit fewer than half of older adults.”