Overview

• Congress approved the One Big Beautiful Bill through reconciliation and it awaits President Trump’s signature on July 4.
• Starting in tax year 2026, filers aged 65 and older with incomes up to $75,000 for individuals or $150,000 for couples qualify for a $6,000 individual or $12,000 joint deduction.
• The deduction phases out entirely at incomes above $175,000 for single filers and $250,000 for couples, excluding the poorest seniors who already pay no taxes on benefits and the highest earners.
• The Social Security Administration estimates that around 90 percent of beneficiaries will pay no taxes on their benefits under the new deduction.
• Analysts from the Committee for a Responsible Federal Budget warn the measure will accelerate Social Security and Medicare insolvency by a year, moving the depletion date to 2032.