Is No Tax on Social Security in the Big Beautiful Bill

Here’s the clear answer: No, the One Big Beautiful Bill (often called the “Big Beautiful Bill”) does not eliminate federal taxes on Social Security benefits.

Instead, it introduces a temporary enhanced tax deduction for seniors, which provides targeted relief—but social security income remains taxable under current rules. Here’s a breakdown:

🧾 What the Bill Actually Does

✅ Senior Deduction Instead of Full Relief

• Seniors 65+ receive a new temporary “senior bonus” deduction:

  • $6,000 (Senate version) or $4,000 (House version) per taxpayer

  • Couples filing jointly can deduct $12,000 (Senate) or $8,000 (House)

• This deduction reduces taxable income, potentially lowering the amount of Social Security benefits subject to tax—but does not remove the tax entirely.

🎯 Income Phase-Outs & Time Limit

• Full deduction applies up to $75,000 AGI for singles and $150,000 for couples

• Phases out for incomes above those thresholds

• Applies only to tax years 2025 through 2028

🔍 Why Social Security Taxation Remains

• Attempts to eliminate Social Security benefit taxes were blocked by the Senate’s Byrd Rule during the reconciliation process

• Fully removing the tax would cost over $1.5 trillion and hasten depletion of the Social Security Trust Fund

👨‍👩‍👧‍👦 Who Benefits?

• About 88% of seniors will pay no federal tax on their Social Security in 2025 under the new deduction, up from 64% under current law

• However, certain groups remain unaffected:

  • Individuals under age 65

  • Survivors, disabled workers, and high earners with incomes exceeding phase-out thresholds.

⚠️ What Seniors Should Know

Final Take

The “Big Beautiful Bill” includes a temporary, targeted tax deduction for older Americans—not a full tax exemption on Social Security benefits. While the deduction does modestly reduce taxes for many seniors, Social Security benefits remain taxable under the bill.