Trump’s big bill offers $6K tax break for seniors — but not everyone gets a cut
Donald Trump’s big sweeping spending bill included a sweetener for many seniors across America.
Individuals over the age of 65 can claim $6,000 as a tax deduction, as of their next tax filing, according to the Internal Revenue Service. Those who file joint returns can claim this amount individually, meaning a married couple could get deductions up to $12,000.
Although this isn’t the elimination of all income taxes on Social Security that he promised while campaigning, this new subsidy could still be a helpful boost for those who qualify. However, the real impact of the deduction depends on your income bracket.
Here’s a closer look at how much you could save at different levels of income.
Low income
Low-income seniors might not notice this new deduction because they already receive a standard deduction that reduces or eliminates any income taxes they owe. As of 2024, the standard deduction for someone over the age of 65 is up to $16,550 individually and up to $30,750 for joint filers.
A significant number of American seniors fall into this category. According to the KFF, one in three adults over the age of 65 had an income below $28,080 in 2022.
This means that some low-income seniors simply don’t have the taxable income to apply an extra $6,000 deduction to, after accounting for the standard deduction.
Middle income
Households with relatively modest incomes could see the most benefit from this new deduction.
Because the deduction starts to phase out for single filers earning over $75,000 and married couples making over $150,000 — there is no deduction when income reaches $175,000 for individuals and $250,000 for couples — the Urban-Brookings Tax Policy Center projects that upper-middle-income households stand to gain the most.
Seniors with incomes between approximately $80,000 and $130,000 are expected to benefit the most from this provision, which would cut their taxes by an average of $1,100, or around 1% of their after-tax income, according to their calculations. Had Congress followed through on eliminating taxes on Social Security benefits, their tax break would have been around $1,300 instead.
High income
Given that the deduction is fully phased out once individual incomes are above $175,000 and joint incomes above $250,000, high-income taxpayers won’t benefit from this new incentive.
Caveats
Given all the rules and limitations, this new tax rule could best be described as helpful but limited. The Urban-Brookings Tax Policy Center estimates that less than half of all seniors could see their taxes reduced from this new deduction.
The rule is also time-limited and only applies to federal income taxes between 2025 and 2028.
Altogether, the new deduction offers a modest cut for a highly specific group of seniors for a relatively short period of time.
However, it does have a long-term impact on other government programs that many seniors rely on: Social Security and Medicare.
The Committee for a Responsible Federal Budget (CRFB) projects that the new set of tax policies implemented by the One Big Beautiful Bill Act (OBBBA) will hasten the insolvency of both the Social Security and Medicare trust funds, moving their depletion date up from 2033 to 2032 — a full year sooner than previous forecasts.
Trump’s big bill offers $6K tax break for seniors — but not
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