Retirees were promised tax breaks for their Social Security benefits.
The One Big Beautiful Bill Act did change the tax law, but did not change the rules for Social Security taxes.
Retirees 65 and over have a temporary new tax deduction but only through 2028.
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We’re in the heart of tax season already, and the Bipartisan Policy Center has made clear that Americans should expect larger tax refunds in 2026 than in recent years. This is likely welcome news to retirees, who have been coping with economic headwinds like inflation in the post-COVID era.
Getting a little extra back from Uncle Sam could potentially relieve a lot of the pressure that many seniors are feeling.
For many retirees, though, the big wild card is what’s happening with taxes on Social Security benefits. President Trump promised when campaigning that eliminating these taxes was a top priority, and when he passed the One Big Beautiful Bill Act, he declared victory. But are retirees really not going to pay taxes on Social Security in 2026 and beyond?
Here’s the reality of how things are changing for seniors.
In July of 2025, the Social Security Administration touted the passage of the One Big Beautiful Bill Act, claiming that the changes to the tax code in 2026 offered “historic tax relief for seniors.”
However, the truth is a little bit more complicated. For one thing, the rules for taxes on Social Security actually were not changed at all by the One Big Beautiful Bill Act. Both before the Act was passed, and after its passage, your provisional income is the key factor that determines if your benefits are taxed. Provisional income is calculated by adding up half of your Social Security checks, some non-taxable income like interest from MUNI bonds, and all taxable income.
If your provisional income is above the thresholds when benefits become taxable, you’ll owe tax on part of your benefits. Specifically:
If you file your taxes as a single filer, you will owe taxes on up to 50% of your benefits if your provisional income is above $25,000 and on up to 85% of your benefits if your income is above $34,000.
If you file your taxes as a married joint filer, you will owe taxes on up to 50% of your provisional income if it is above $32,000 and on up to 85% of your benefits if it is above $44,000.
These tax rules were put in place via reforms in the 1980s and 1990s, and unfortunately, the thresholds when taxes kick in were not indexed to inflation. A growing number of retirees end up owing taxes on Social Security each year as their income goes up, and the OBBBA did not change that in any way.
fizkes / Shutterstock.com · fizkes / Shutterstock.com
So, if taxes on Social Security were not changed, you may be wondering why President Trump declared victory on his Social Security promises. The reason is simple. Retirees were given a new tax break, which means that many will now have taxable income that’s low enough they won’t pay taxes on Social Security benefits.
The new tax break allows seniors over 65 with incomes below $75,000 (for single filers) or $150,000 (for married joint filers) to claim a deduction of $6,000 per person. The tax break begins to phase out above these income limits. This added $6,000 deduction, or $12,000 for married couples, is in addition to the standard deduction. This applies to anyone over 65 who qualifies, and has nothing to do with Social Security’s tax rules — but it can still benefit Social Security retirees.
Unfortunately, the new tax break expires in 2028. So while retirees will see temporary tax relief for a few years, ultimately the taxes they owe on Social Security will remain, and even the relief will be short-lived. Retirees can take advantage of these tax savings while they have them, but shouldn’t count on a tax break specific to Social Security benefits now or in the future unless the law changes.
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