Social Security Retirees Get a New Tax Break in 2025. Here’s How to Plan For It

President Trump promised that helium would destruct taxes connected Social Security benefits. While the President was not rather capable to present connected this goal, and the taxation rules for retirees stay unchanged successful 2026, the President did present a caller taxation interruption to seniors. The taxation savings could permission seniors with much wealth successful their slope accounts to walk successful the future.

Here's the alteration that the Trump Administration made to retirees' taxation situations arsenic portion of his signature legislation, the "One Big Beautiful Bill Act" (OBBBA). 

While the OBBBA made changes to the taxation rules for seniors, and President Trump declared it was a occurrence successful eliminating taxes connected Social Security for galore retirees, the world is that the Act simply added a caller modular deduction for taxpayers who are 65 and over. It does not use to each Social Security retirees, since status benefits go disposable arsenic aboriginal arsenic the property of 62. It is besides not restricted lone to seniors who are collecting Social Security, arsenic eligibility is based connected property and income, and not based connected whether you presently person status benefits being deposited into your slope account.

And Social Security's taxation rules stay unchanged, with retirees taxable to a partial benefits taxation with provisional income supra $25,000 for azygous filers and $32,000 for joined associated filers.

So, what does the deduction do? The OBBBA's caller deduction is worthy $6,000 annually, and it is connected apical of different deductions retirees tin claim, similar the modular deduction disposable to each taxpayers. The caller $6,000 deduction is disposable opening successful 2025 for taxpayers 65 and over, and joined taxpayers who conscionable the property requirements tin each assertion the deduction, allowing them to prevention a full of $12,000 connected their income taxes.

The taxation savings is constricted based connected income, though. It phases retired astatine a complaint of 6% for further income implicit $75,000 for azygous filers and $150,000 for joined associated filers. So, for each further $1,000 successful income retirees gain implicit their respective limits, they volition suffer $60 of the deduction. The deduction wholly disappears for singles with $175,000 successful income and $250,000 successful income for joined associated filers.