Many older Americans today rely on Social Security benefits for a stress-free retirement. But it’s not a given that you’ll get to keep your Social Security benefits in full.
As part of his presidential campaign, Trump pledged to do away with taxes on Social Security benefits. And he sort of kept that promise, but not fully.
Here’s where the law stands with regard to taxes on Social Security so you know what to expect for your financial situation.
Trump touts new tax law changes
On April 1, President Trump addressed the nation to discuss the Iran conflict. And he took the opportunity to sing the praises of the One Big Beautiful Bill Act (OBBBA), which was passed in July of 2025.
“With our historic tax cuts, where people are just now talking about receiving larger refunds than they ever thought possible, they are getting so much more money than they thought. That’s from the great big, beautiful bill,” Trump said.
One of the changes introduced in the OBBBA was a temporary $6,000 senior tax deduction. That deduction should, in theory, exempt most Social Security recipients from paying taxes on their benefits. But that doesn’t mean taxes on benefits actually went away.
Who really has the cheapest auto insurance in your area? Check your zip code here.
“No tax on Social Security” is misleading
The Council of Economic Advisers reports that the new $6,000 senior tax deduction created by the OBBBA lets 88% of all seniors who receive Social Security off the hook from paying taxes on benefits. But that means a reasonable percentage of seniors are still liable for those taxes – namely, higher-income retirees.
Furthermore, the $6,000 senior tax deduction is only temporary and expires in 2028. At that point, more seniors are likely to owe taxes on their Social Security benefits, especially as annual cost-of-living adjustments increase the value of those monthly checks.
Where the disconnect lies
The new $6,000 senior tax deduction doesn’t eliminate taxes on Social Security. Rather, it lowers many recipients’ incomes enough that they’re able to avoid them.
The obligation to pay taxes on Social Security benefits hinges on combined income. That’s calculated as adjusted gross income (AGI) plus tax-exempt interest income (such as what municipal bonds pay) plus 50% of annual Social Security.
Single tax-filers with a combined income of $25,000 or more face taxes on their Social Security benefits. Joint filers with a combined income of $32,000 face those taxes as well.
The OBBBA’s $6,000 senior tax deduction allows many filers to reduce their AGI, and thus, their combined income, to fall below the above thresholds. As a result, most seniors now don’t have to pay taxes on their Social Security benefits.
But the new $6,000 deduction has phase-out rules. It starts to phase out at a 6% rate when modified adjusted gross income exceeds $75,000 for single tax-filers and $150,000 for joint filers. The deduction phases out in full at $175,000 for single filers and $250,000 for joint filers.
So all told, higher earners still have to pay taxes on Social Security. And unless Congress extends the $6,000 deduction past 2028, even moderate-income seniors are likely to start having to pay taxes on benefits again once it expires.
Don’t assume you’ll be exempt from paying taxes on Social Security
While the new senior tax deduction may lower your chances of being taxed on your Social Security, it’s not a given that you’ll get out of paying them. As you can see, the combined income thresholds are quite low. And while the $6,000 deduction can help offset that, if you have a decent amount of income coming in from other sources, you may be pushed over the threshold.
In a nutshell, any income stream that increases your AGI makes you more likely to face taxes on Social Security. That may include:
- Certain types of pensions
- Traditional IRA or 401(k) plan withdrawals
- Earnings from a part-time job
Be mindful of your total income picture so you know what to expect tax-wise. It could also pay to work with a tax professional each year in retirement to brainstorm ways to lower your IRS burden.
Bottom line
An important component of retirement planning is knowing what taxes to expect. Even with the new senior deduction, you shouldn’t assume off the bat that you won’t face taxes on Social Security benefits. The OBBBA did not get rid of those taxes. It simply helped more people get out of them temporarily.
If you want to decrease your chances of having your Social Security benefits taxed, review your total retirement income picture and withdraw from your taxable savings carefully. And if you’re not yet retired but are getting close, you may also want to look into doing a Roth conversion.
Not only could that set you up with tax-free withdrawals from your savings, but Roth IRA distributions don’t count toward your AGI. Even if you plan to tap your nest egg substantially each year, you might still manage to avoid taxes on Social Security benefits if you’re only withdrawing from a Roth.
You May Also Like
Earn Up to 4.00% APY With The Best High-Yield Savings Accounts of April 2026
Grow your savings faster with the best high-yield savings accounts from our partners, offering up to 10x higher APY (annual percentage yield) than traditional savings accounts.1
The product and annual percentage yield (APY) data displayed on this website is gathered from various sources and may not reflect all of the offers available in your area. Although we strive to provide the most accurate data possible, we cannot guarantee its accuracy. Always verify account details and availability with the financial institution before opening an account.
Subscribe Today
Unlock the Best Banking Deals and Bonuses
From high-yield savings accounts to cashback checking and sign-up bonuses, we bring you the best banking offers to grow your money smarter.
Author Details
Maurie Backman
Most retirees will make their Social Security claiming decision exactly once, which is why Maurie Backman has spent more than 20 years helping them understand it. She covers benefit calculations, COLA forecasts, and the policy changes that quietly reshape what retirees receive each month. Her work has appeared in Kiplinger, The Motley Fool, 24/7 Wall St., Bankrate, and U.S. News & World Report.
