Trump’s “Big, Beautiful Bill” Promises Relief — But Does It Really Eliminate Taxes on Social Security?
In a sweeping move that’s generating headlines and hope among millions of American seniors, Congress has passed President Donald Trump’s much-hyped “big, beautiful bill” — a tax and spending package the administration claims will deliver historic relief to Social Security recipients.
But as with many political promises, the reality is more complicated.
Does the Bill Eliminate Taxes on Social Security? Not Exactly.
Soon after Congress gave its approval, the Social Security Administration (SSA) issued a press release praising the bill for “eliminating federal income taxes on Social Security benefits for most beneficiaries.” The message echoed Trump’s earlier campaign pledges to untax Social Security.
However, tax policy experts caution that the legislation does not eliminate these taxes outright. Instead, it provides a temporary and targeted deduction — a partial fix that may leave many retirees still paying taxes.
According to a White House Council of Economic Advisers (CEA) analysis from June, about 88% of seniors — approximately 51.4 million people — would owe no federal tax on their benefits under the bill due to a new deduction. But that’s due to increased standard deductions, not a repeal of the tax law governing Social Security.
What the Bill Actually Does
Rather than removing Social Security taxation altogether, the bill introduces a temporary tax deduction:
- Seniors aged 65 and older can claim a $6,000 deduction from their adjusted gross income.
- Married couples (both 65+) can claim up to $12,000.
- The deduction is available only to those earning $75,000 or less individually, or $150,000 jointly.
- The provision expires at the end of 2028.
According to the AARP, this deduction applies to all income, not just Social Security payments — and phases out for higher earners. Seniors under 65 or those above the income thresholds are not eligible.
Who Benefits — and Who Doesn’t
Despite the optimistic headlines, many low-income seniors won’t see any benefit. That’s because they already pay no federal tax due to their limited earnings.
“Boosting the amount that you get to write off when you already write off everything does not help you at all,” said Bobby Kogan, senior director at the Center for American Progress.
Instead, the biggest beneficiaries are middle- and upper-middle-income retirees — the ones whose income and Social Security payouts place them in a taxable bracket.
“By design, the people who benefit have to be richer. And the people who benefit the most are the richest,” Kogan added.
Will This Hurt Social Security in the Long Run?
While the new deduction brings short-term relief, some experts fear it could weaken Social Security’s long-term financial foundation.
“We already have a problem of not enough money going into the trust fund,” Kogan warned. “This bill makes even less money go into the fund.”
A Penn Wharton Budget Model analysis estimates that fully eliminating federal taxes on Social Security would:
- Reduce federal revenue by $1.5 trillion over 10 years, and
- Increase the national debt by 7% by 2054.
The current deduction won’t go that far, but it still cuts revenue without any new funding mechanism for the already strained program.
Americans Don’t Want Cuts — Even if It Means Higher Taxes
If Social Security’s finances continue to erode, Congress may face stark choices: raise taxes, cut benefits, or both. Yet public opinion is clear.
According to a January 2025 survey by the National Academy of Social Insurance, funded by AARP:
- 85% of Americans oppose reducing Social Security benefits,
- A strong majority support increasing benefits, even if it means raising taxes.
“Virtually all Americans want their Social Security benefits to be preserved and are willing to do what it takes to ensure the program continues,” said AARP’s Chief Public Policy Officer Deb Whitman.
The Bottom Line
President Trump’s “big, beautiful bill” does provide real tax relief for many seniors — particularly those earning moderate incomes — but it does not fully eliminate federal income taxes on Social Security benefits.
Instead, it offers a temporary deduction that benefits some more than others and does little for the most vulnerable seniors who already pay no tax.
As Washington debates the future of retirement security in America, one truth remains: lasting, equitable reform will require more than temporary fixes and political slogans.