Trump Tax Plan: Will Social Security Taxes Get Cut?

President Donald Trump campaigned in 2024 on eliminating federal income taxes on Social Security benefits, but the One Big Beautiful Bill Act (OBBBA), signed in July 2025, ultimately did not include that proposal. Senate budget reconciliation rules, which bar changes to Social Security programs, prevented its inclusion. Instead, the new law establishes a temporary $6,000 tax deduction for seniors ages 65 and older from 2025 through 2028, subject to income-based eligibility limits.

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Key Takeaways

• Trump’s new tax bill does not eliminate taxes on Social Security benefits, despite earlier campaign promises.
• Instead, it offers a temporary $6,000 standard deduction for seniors ages 65 and older from tax years 2025 to 2028.
• Repealing Social Security taxes would mostly benefit higher-income retirees and reduce federal revenue by approximately $1.5 trillion over 10 years, according to one analysis.

Is Trump Eliminating Taxes on Social Security Benefits?

During his 2024 campaign, Donald Trump expressed opposition to taxing Social Security benefits, stating on Truth Social, “SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!” He reiterated this stance in his 2025 State of the Union address, advocating for “no tax on tips, no tax on overtime and no tax on Social Security benefits for our great seniors.”

Despite these declarations, the OBBBA did not eliminate taxes on Social Security benefits. Instead, it introduces a temporary $6,000 enhanced standard deduction for seniors aged 65 and older, effective from tax years 2025 through 2028, with income-based eligibility limits.

After OBBBA was signed into law on July 4, the Social Security Administration said the legislation “ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits,” ¹ referring to the temporary $6,000 deduction.

The exclusion of the Social Security tax repeal is attributed to Senate budget reconciliation rules, which prohibit changes to Social Security programs through this legislative process.

Check out our in-depth study to learn more about how the One Big Beautiful Bill Act (OBBBA) impacts Americans across the country.

Analyses indicate that repealing taxes on Social Security benefits would primarily benefit higher-income retirees. Further, it could also reduce federal revenue by approximately $1.5 trillion over the next decade, according to the nonpartisan Penn Wharton Budget Model. ² This could potentially accelerate the insolvency of the Social Security trust fund.

How Social Security Benefits Get Taxed

Social Security benefits can be subject to federal income tax depending on your combined income, which comprises your adjusted gross income (AGI), any nontaxable interest and half of your Social Security benefits.

If you file as an individual and your combined income is between $25,000 and $34,000, up to 50% of your benefits may be taxable. If your income exceeds $34,000, up to 85% of your benefits may be taxed. For married couples filing jointly, the thresholds are $32,000 and $44,000, respectively.

For example, consider a couple with $32,000 in AGI, $2,000 in tax-exempt interest and $24,000 in annual benefits. They would have a combined income of $46,000, meaning up to 85% of their benefits could be taxable.

Taxes on Social Security are not withheld automatically unless requested. Beneficiaries can choose to have federal taxes withheld at 7%, 10%, 12% or 22%. ³ Alternatively, they can make estimated tax payments throughout the year.

At the state level, most states do not tax Social Security benefits, but a handful still do, typically with exemptions, deductions or income-based limits. These include Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia. Because each state applies its own rules, the impact on retirees varies based on where they live. (West Virginia will completely phase out its taxes on Social Security in 2026. ⁴ )

Federal taxation of Social Security has been in place since 1984, when Congress first decided to tax a portion of benefits to support the program’s financing. The current 85% threshold was added in 1993 to help fund Medicare. While lawmakers have periodically floated changes, the underlying rules have remained largely intact even as benefit levels and retiree incomes have increased.

How Expanded Standard Deduction May Impact Seniors

The OBBBA includes a temporary increase to the standard deduction for taxpayers aged 65 and older. Under the legislation, seniors will receive an additional $6,000 deduction per person on top of their regular standard deduction. This enhancement applies for tax years 2025 through 2028.

Eligibility for the deduction is income-limited. For single filers, the enhanced deduction begins to phase out at $75,000 of modified adjusted gross income (MAGI) and completely phases out at $175,000. For married couples filing jointly, the phaseout begins at $150,000 and ends at $250,000.

As an example, consider a married couple, both over age 65, with a combined MAGI of $150,000 in 2025. Under previous rules, their standard deduction would be $31,500. With the $6,000 enhancement per spouse (up to $12,000 for the couple), their deduction increases to $43,500.

While this change does not directly exempt Social Security income from taxation, it may indirectly reduce how much of those benefits are taxable by lowering overall taxable income. It still provides targeted tax relief to seniors within the eligible income range.

How the One Big Beautiful Bill Act Affects Seniors

Seniors should also note:

• Trump’s new tax law does not repeal federal taxes on Social Security benefits. There is no mention of such a repeal in the legislative text.
• The legislation does not include a caregiver tax credit or a dependent senior deduction, and no provisions target unpaid caregiving specifically.

How Seniors Can Minimize Retirement Taxes

Seniors can reduce retirement taxes by planning when and how they withdraw money. Retirement accounts are taxed in different ways. Traditional IRAs and 401(k)s are taxed when money comes out, while Roth IRAs offer tax-free qualified withdrawals. By combining withdrawals from these sources, seniors can manage how much taxable income they report each year. This can help them avoid jumping into higher tax brackets and keep more income in their pocket.

Another way to lower taxes is by controlling when to take required minimum distributions (RMDs). Starting at age 73, the IRS requires retirees to withdraw a set amount each year from tax-deferred accounts. But seniors can prepare ahead by converting some of their IRA or 401(k) money to a Roth in earlier retirement years, which may lower future RMDs. This can also help reduce taxes on Social Security benefits, which become taxable once income crosses certain limits.

Estimate your next RMD in moments. Use SmartAsset’s RMD calculator to get an idea of how much you’ll need to withdraw based on your age and account balance.

Seniors should also pay attention to other types of income like capital gains, dividends, part-time wages and rental earnings. Selling investments in low-income years, for example, may qualify them for lower capital gains tax rates. Taking advantage of deductions, such as those for medical expenses, charitable giving or the higher standard deduction available to those over 65, can also lower their overall tax bill.

Putting all of these strategies together can lead to significant tax savings over time. Even small adjustments each year, like managing the source of retirement withdrawals or bunching deductions into a single year, can have a long-term impact. A clear plan helps seniors keep more of their income and make their savings last longer.

Bottom Line

Trump’s OBBBA establishes a temporary $6,000 tax deduction for seniors age 65 and older, available for tax years 2025 through 2028. The deduction is designed to reduce taxable income for eligible retirees and provide modest financial relief. However, the law stops short of eliminating federal taxes on Social Security benefits, a change that would require separate legislation.

Retirement Planning Tips

• A financial advisor can help you mitigate risk within your portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Create a withdrawal sequence that supports both cash flow and long-term growth. Using a structured approach, like spending from cash reserves during down markets and replenishing those reserves after strong years, can help manage sequence-of-returns risk. A consistent withdrawal plan also makes annual budgeting easier.

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