President Trump’s newly signed “big, beautiful bill” is creating confusion around whether Social Security benefits will still be taxed, sparking concern and mixed reactions from experts and seniors alike.
The legislation, signed into law Saturday, includes a $6,000 tax deduction for Americans aged 65 and older. A press release from the Social Security Administration stated that the bill “eliminates federal income taxes on Social Security benefits for most beneficiaries,” a message that led many to believe taxes on those benefits were fully repealed.
But tax policy analysts say that’s not the case.
“There is no provision in the bill that outright eliminates or even directly reduces taxes on Social Security benefits,” said Howard Gleckman of the nonpartisan Tax Policy Center. Instead, the law raises the standard deduction for seniors, which in turn increases the number of retirees who owe no tax—but doesn’t remove the tax itself.
Under previous rules, about 64% of seniors didn’t pay taxes on their benefits. With this bill, that figure is projected to rise to 88%, thanks to the expanded deduction. However, the benefit primarily goes to those earning up to $75,000 individually or $150,000 as a couple. Seniors with higher incomes see the deduction phase out entirely.
Critics argue that the relief disproportionately helps wealthier retirees. “The people who benefit most are higher-income seniors,” said Bobby Kogan of the Center for American Progress. “This isn’t really aimed at the people struggling the most.”
With the median senior income around $30,000, many lower-income retirees already pay little to no tax—so the new deduction offers them minimal change. Garrett Watson of the Tax Foundation noted that the bill is being promoted as broad relief for seniors, but it may not apply to many who expect it to.
“A lot of seniors are going to be surprised when they find out it doesn’t apply to them,” Watson said. “I’m getting asked constantly what this really means for people’s taxes.”
The senior tax break is also temporary, set to expire in a few years—raising further questions about its long-term impact on both retirees and the Social Security system itself.
