An extra $6,000 deduction for seniors

Three words fit on a campaign sign: no tax on Social Security. President Trump made that promise, and the tax law he signed on July 4, 2025, keeps it for most retirees, though by a different road than the sign suggests. Retirees should know which road it took.

The rules for taxing benefits did not change. Once a retiree's combined income, which counts half of their benefits plus their other income, passes $25,000, or $32,000 for a married couple, up to 85% of their Social Security can still be taxed. Think of that as rain in the forecast. The law did not stop the rain; it handed every taxpayer 65 and older an umbrella, a new deduction of $6,000 per person, or $12,000 for a married couple when both qualify, on top of the standard deduction and the extra amount older filers already got.

How big the umbrella is

Take a retired couple, both 67, filing a 2026 return. They can subtract $47,500 before federal income tax touches a dollar: the $32,200 standard deduction, $1,650 each for being 65 or older, and the new $12,000. For many retirees, that is now more than the taxable part of their benefits. The White House's Council of Economic Advisers, using Treasury calculations, estimated that the share of seniors on Social Security who owe no tax on their benefits rises from 64% to 88%. That is the administration's projection; no one has yet counted it from filed returns.

The deduction applies to any income, so a 67-year-old still working at the hardware store gets it too. It shrinks by 6 cents for every dollar of income above $75,000 for singles or $150,000 for couples, and it is gone at $175,000 and $250,000. You need a valid Social Security number, married couples must file jointly, and you can claim it whether or not you itemize. It runs from 2025 through 2028.

Treasury reports that more than 35 million seniors claimed it in the first filing season, with an average deduction above $7,500. More than two-thirds of them earned under $100,000.

The fair complaint is about the label. Garrett Watson of the Tax Foundation told CBS News the deduction is "far from completely repealing the tax on their benefits," and it does nothing for seniors who owe no tax, for recipients under 65 or for anyone after 2028. Tax experts told CBS that Senate budget rules for this kind of bill blocked a permanent repeal. Within those rules, Congress built an umbrella that covers most retirees, and most of the people under it are middle-class.

What to check next year

If you are 65 or older, look for the enhanced deduction for seniors on Schedule 1-A of your 2026 return, and make sure the line is filled in. If you are married and both qualify, file jointly with both Social Security numbers on the return. If tax comes out of a pension or Social Security check, run the IRS Tax Withholding Estimator at IRS.gov/W4App so you are not overpaying all year.

The forecast still calls for rain. For most retirees, the umbrella is finally big enough.