The “One Big Beautiful Bill Act” introduces a temporary federal income tax deduction for Social Security recipients aged 65 and older.
- New Tax Deduction:
- Eligible individuals can deduct up to $6,000.
- Married couples filing jointly, where both are 65 or older, can deduct up to $12,000.
- The deduction begins to phase out for individuals with adjusted gross incomes over $75,000 and married couples over $150,000.
- This is expected to result in nearly 90% of beneficiaries paying no federal income tax on their Social Security benefits.
- Important Limitations:
- Temporary: This tax deduction is set to expire at the end of 2028.
- Not a Full Repeal: It is a deduction that reduces taxable income, not a complete elimination of taxes on all Social Security benefits for everyone.
- No Program Changes: The bill does not alter the fundamental structure of the Social Security program, such as benefit calculations or eligibility.
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