This is a clearly political e-mail, just as the Covid checks in 2020 were “signed” by the president as if he personally bestowed this largesse on the population.
It’s disgusting but it’s also inaccurate.
I checked with Google Gemini this morning. It’s true that there will be a higher standard exemption for people over age 65 so more people who are on Social Security will be exempt from taxation. But it doesn’t change the taxation of Social Security income.
Here is what Google Gemini says:
The “One Big Beautiful Bill Act” (OBBBA) has recently passed Congress and is expected to be signed into law. While it does not eliminate the taxation of Social Security benefits entirely, it introduces provisions that will affect seniors, including those in higher tax brackets.
Here’s how the OBBBA is expected to affect the taxation of Social Security for seniors over age 65 in a higher tax bracket:
No Elimination of Social Security Taxation: Despite some campaign promises, the OBBBA does not eliminate federal income taxes on Social Security benefits for all recipients.
Increased Senior Deduction (Temporary): The most direct impact for seniors is a new bonus deduction of up to $6,000 per individual for taxpayers aged 65 and over. This deduction is available from 2025 through 2028. This is in addition to the existing standard deduction and the extra standard deduction for seniors (currently $2,000 for single filers and $1,600 per qualifying spouse for joint filers).
Phase-Out for Higher Earners: This new $6,000 senior deduction is subject to income limitations and phases out for higher-income retirees. The full deduction is available for individuals with modified adjusted gross income (MAGI) up to $75,000 and for joint filers up to $150,000. It phases out completely for individuals earning over $175,000 and for married couples earning over $250,000.
Indirect Impact on Social Security Taxation: While the OBBBA doesn’t directly change the rules for how Social Security benefits are taxed (which currently subject up to 85% of benefits to taxation above certain income thresholds), the increased standard deduction and the new senior deduction can indirectly reduce the taxable income for some seniors. For those whose income falls within the phase-out range or below, this could mean less of their Social Security benefits are subject to federal income tax, or that their overall tax liability is reduced.
Limited Benefit for High-Income Seniors: For seniors already in higher tax brackets, especially those whose MAGI exceeds the phase-out thresholds for the new senior deduction, the direct tax benefits from this provision will be minimal or non-existent. They will continue to have up to 85% of their Social Security benefits subject to taxation based on the existing “combined income” rules.
Extension of 2017 Tax Cuts: The OBBBA also makes permanent many of the individual tax rate reductions and increased standard deductions that were part of the 2017 Tax Cuts and Jobs Act (TCJA) and were set to expire at the end of 2025. This means that higher-income seniors will continue to benefit from these lower overall income tax rates.
In essence, while the OBBBA provides a significant tax break for many lower- and middle-income seniors, its impact on seniors in the highest tax brackets regarding Social Security taxation will be limited due to the phase-out rules for the new senior deduction. These higher earners will still largely be subject to the existing rules for Social Security benefit taxation. [end quote]
As a Tax Aide volunteer, I see a few people who are so poor that their Social Security isn’t taxed. The new “senior bonus” will exempt more people. The rule in 2025 is:
The taxation of Social Security benefits depends on your “combined income,” which is calculated as your Adjusted Gross Income (AGI) + nontaxable interest + half of your Social Security benefits.
For 2025, the AGI (or combined income) thresholds for Social Security benefits to become taxable are:
For single filers (and those filing as head of household or qualifying widow(er)):
If your combined income is less than $25,000, generally none of your Social Security benefits are taxable.
If your combined income is between $25,000 and $34,000, up to 50% of your Social Security benefits may be taxable.
If your combined income is more than $34,000, up to 85% of your Social Security benefits may be taxable.
For married couples filing jointly:
If your combined income is less than $32,000, generally none of your Social Security benefits are taxable.
If your combined income is between $32,000 and $44,000, up to 50% of your Social Security benefits may be taxable.
If your combined income is more than $44,000, up to 85% of your Social Security benefits may be taxable.
For 2026 under the OBBA:
The recently passed “One Big Beautiful Bill Act” (OBBBA) significantly changes how Social Security benefits are taxed, particularly for seniors, starting in tax year 2026.
While the prior AGI thresholds (the $25,000-$34,000 and $32,000-$44,000 ranges) for taxing 50% or 85% of benefits still technically exist in the tax code, the practical effect of the OBBBA is that a large majority of seniors will effectively pay no federal income tax on their Social Security benefits.
Here’s how it works under the new OBBBA rules for 2026 and through 2028:
New Bonus Deduction for Seniors: The OBBBA introduces a new, substantial deduction specifically for individuals aged 65 or older.
For a single filer, this new deduction is $6,000.
For married couples filing jointly, it's $12,000 ($6,000 per spouse).
Impact on Social Security Taxation:
This new deduction is in addition to the existing standard deduction and the existing age-related additional standard deduction.
The White House and Social Security Administration (SSA) are stating that, due to these combined deductions, approximately 88% of all seniors receiving Social Security benefits will pay no federal income tax on those benefits.
For many low- and middle-income seniors, the total amount of their standard deduction plus the new OBBBA senior deduction will exceed the amount of their otherwise taxable Social Security benefits, effectively eliminating the tax.
Income Limitations for the New Deduction:
The new $6,000 (single) or $12,000 (married joint) deduction phases out for higher-income earners.
For single filers, the deduction begins to phase out at a Modified Adjusted Gross Income (MAGI) of $75,000 and is fully phased out at $175,000.
For married couples filing jointly, the deduction begins to phase out at a MAGI of $150,000 and is fully phased out at $250,000.
In summary, for 2026 (and through 2028), the traditional AGI thresholds for Social Security taxation are largely overshadowed by the new, generous deduction for seniors under the OBBBA. If your income falls below the phase-out thresholds for this new deduction, it’s highly likely you will pay no federal income tax on your Social Security benefits.
While the bill aims to reduce the tax burden on Social Security benefits for most seniors, the underlying rules for how Social Security benefits are calculated for tax purposes (i.e., using “combined income”) haven’t fundamentally changed, but the new deduction effectively offsets the tax for many. [end quote]
And of course the “bonus” is is temporary , currently set to expire after 2028 unless extended by future legislation.
For higher-income households that may be charged extra by Medicare (IRMAA):
Crucially, this new deduction for seniors is a tax deduction on your income tax return. While it reduces your taxable income for federal income tax purposes, it doesn’t directly change your Modified Adjusted Gross Income (MAGI) as defined for IRMAA purposes.
Wendy
