Republican Presidential candidate former President Donald Trump spoke at an expedition rally on Ashville, Neck, Wednesday, August 14, 2024.
Matt Rourke | AP
Social security administration sent that experts say that there is a misleading email for consumers last week, describing the President Donald TrumpAs “a big beautiful bill” “Relief by long awaited for millions of old Americans.”
In that email and July 3 Press releaseThe agency said that the law would make it “about 90%” as social security beneficiaries, which no longer pays federal income tax on profit. It is responsible for an extra $ 6,000 senior cuts And another unspecified provision.
Tax experts say this is not accurate.
The law is not, as the agency said, “a provision involves that eliminates federal income tax on social security benefits for most beneficiaries.” In addition, while the Social Security Administration Memorandum said that the law helps in protecting social security, experts say that provisions Weaken the funding of the program It gets it by reducing tax money.
Senior Fellow Howard Glackman of Urban-Brookings Tax Policy Center said, “It is not right to say that there is a provision in this bill which is going to eliminate social security benefits tax for 90% of the population.”
“And it is also wrong to say that it is going to preserve the solvency of social security,” Glackman said.
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78% says
Trump had said at the campaign mark that he plans to abolish federal income tax On social security benefitsHowever, the reconciliation process through which the budget and tax law were passed, banning the change in social security.
The Social Security Administration did not return the request for comments. The White House postponed the comment for social security administration.
Economic Advisory Council, an agency within the President’s Executive Office, Estimate Changes in law will help to increase the share of seniors to higher than 88% with exemption and deduction, from 64% under the current law.
They change tax A high standard cut, existing senior cuts already in effect and include new additional senior cuts or “bonus”.
How does $ 6,000 senior ‘bonus’ works
The new tax package involves additional cuts of up to $ 6,000 for senior citizens aged 65 years and above.
While additional senior cuts have been called a bonus in the legislative text, this is technically one DeductionWhich reduces the amount of income which is subject to taxes.
In particular, this does not mean that the seniors will see a bonus check of $ 6,000 in the mail or in their refunds on tax time.
“It’s not what happened during Kovid, when the government was writing checks to the people,” Glackman said.
According to the law, the deduction will be for the year 2025 through 2028. This eligible will be available to taxpayers, whether they take standard deduction or do its returns items.
But eligibility depends on income. Taxpayers of up to $ 75,000 in amended adjusted gross income – or up to $ 150,000 if married and jointly filing – can obtain full cuts. For income above those thresholds, the cut slowly exits.
According to tax experts, senior people with mid-age are most benefited from change.
How Bonus affects tax on social security benefits
A person reads ‘our social security’ in support of fair taxation near US Capital in Washington, DC on 10 April 2025. Tax Justice Advocates attended a rally to speak for the rich for the tax deduction of President Trump, and urged Congress members to intervene.
Brian Dozier | AFP | Getty images
social Security Profit is taxed Based on joint income, or adjusted gross income sum, half of non -bison interest and social security benefits.
In joint income, individuals with $ 25,000 and $ 34,000 can be taxed up to 50% of their social security benefits. If their joint income is more than $ 34,000, then up to 85% of their benefits can be taxed.
For married couples with joint income between $ 32,000 and $ 44,000, tax can be levied up to 50% of their benefits. If they have more than $ 44,000, their benefits can be taxed up to 85%.
Those thresholds are not adjusted to inflation, which means that over time more beneficiaries pay taxes on their benefits.
Because the new senior bonus is an above-line cut, which means that it is reduced by gross income to calculate adjusted gross income, it can reduce tax liability indirectly on social security benefits.
Which may benefit from senior ‘bonus’
Additional Senior Cuts will not affect taxes on social security benefits for individuals and joints below those income limits, as they are already not subject to levy on their benefits, Glackman said.
Nor will it help those who earn too much to qualify for new cuts. In high-or-be-ordered adjected gross income, their social security benefits cannot be seen less, unless they are in the phased window.
For taxpayers who achieve the qualifications, senior cuts may decrease, rather than finish, their taxes on profit, Glackman said. The Urban-Brookings Tax Policy Center estimates that less than half-old adults will benefit from senior cuts, he said.
Even those who are benefited will not necessarily see zero tax; They will only look at low taxes, Glackman said.
“People who are the most profitable, we guess are those who have built between $ 50,000 and $ 200,000,” Glackman said.
Alex Durante, senior economist at the Tax Foundation, said that laws may be more generous than taxpayers among other age colleagues.
“Overall adopted adoption is going to reduce the tax liabilities significantly for senior citizens, and for some people, it will probably erase any tax liability to them,” Durante said.
“But it depends on where they are in income distribution,” he said.
How ‘Big Beautiful Bill’ affects social security funding
While some seniors may now see financial benefits, the increased senior cuts will cost the social security program, which is already under financial stress.
New additional senior deductions and other changes in Trump’s “Big Beautiful Bill” can reduce the taxation of social security benefits by about 30 billion dollars per year, an estimated by the committee for a responsible federal budget.
This will speed up the estimated insolvency for the social security trust fund dedicated to retirement benefits by the end of 2032, at the beginning of 2032, according to CRFB.
To help the program to sore the money, the Congress has the option of increasing taxes, cuts or combining both.
According to experts, the sooner any change is made, the greater the time.
“Every year we delay in improving the program, which means that those changes will have to be stable and more people will have to affect the retirement age,” CRFP President Maya McGin wrote Recently in an up-ed.
