‘The President and House Republicans are providing much needed tax relief to middle and low-income seniors,’ says Jim Martin, 60 Plus Association chairman.
The One Big Beautiful Bill Act, narrowly approved by the House of Representatives on May 22, includes a tax break for Americans older than 65 in the form of a temporary deduction of $4,000.
In lieu of President Donald Trump’s campaign pledge to eliminate taxes on Social Security benefits, this deduction, called the “senior bonus,” would offer a smaller tax cut, targeted to benefit lower-income seniors.
The House bill allows seniors, whether they take the standard deduction or itemize their returns, to deduct an additional $4,000 from their taxable income. It phases out for single filers earning more than $75,000, or $150,000 for taxpayers filing jointly.
The deduction would last from 2025 through 2028. For those who qualify, it would amount to dollar savings of $480 for those in the 12 percent tax bracket, and $880 for those in the 22 percent tax bracket. The deduction reduces taxable income and is distinct from a tax credit, which would be a dollar-for-dollar reduction in taxes.
Jessica Riedl, a senior fellow at the Manhattan Institute focusing on budget, tax, and economic policy, told The Epoch Times that “Republicans converted the pledge of no taxes on Social Security benefits into the $4,000 additional senior deduction for two reasons.”
“First, because congressional rules forbid altering Social Security or its taxes in a reconciliation bill,” Riedl said. “Second, ending Social Security income taxes would overwhelmingly benefit wealthier seniors, because their benefits currently face higher taxes, and this deduction is instead targeted to lower-earning seniors.”
According to what is called the 1974 Byrd Rule, changes to Social Security-related provisions cannot be included in budget reconciliation bills in the Senate and must be enacted through regular legislation, which is subject to a filibuster. No Democrat representatives voted in favor of the House bill, which passed 215-214.
According to a May 16 White House statement in support of the House budget bill, it “provides historic tax relief to Social Security recipients“ and ”slashes taxes on seniors’ Social Security benefits.”
