NORTH CAROLINA —- The Social Security Administration announced that new federal legislation will eliminate income taxes on Social Security benefits for approximately 90% of recipients, marking a significant change in how retirement benefits are taxed.
Details of the Tax Relief Package
The legislation, known as the One Big, Beautiful Bill, removes the federal income tax burden on Social Security benefits for the vast majority of beneficiaries. The change affects both individual recipients and married couples receiving benefits.
Beyond the Social Security provision, the bill also includes an enhanced tax deduction specifically for taxpayers aged 65 and older, providing additional financial relief to retirees.
Administration Response
Social Security Commissioner Frank Bisignano characterized the legislation as a “historic step forward for America’s seniors” in a statement released following the bill’s passage.
“For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans,” Bisignano said. “By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump’s promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they’ve earned.”
Impact on Beneficiaries
The tax elimination will provide immediate financial relief to millions of older Americans who have been paying federal income taxes on their Social Security benefits. The change is expected to increase the disposable income of affected beneficiaries, allowing them to retain more of their retirement benefits.
Next Steps
The Social Security Administration stated it will work with federal partners to ensure beneficiaries understand how the new legislation affects their tax obligations. The agency plans to provide updated information to the public as implementation details are finalized.
The legislation represents a substantial shift in federal tax policy regarding retirement benefits, with implications for millions of current and future Social Security recipients. For more information about Social Security programs and benefits, visit www.ssa.gov.
