The $6,000 Senior Bonus Deduction
Starting in 2025, Americans aged 65 and older can claim a new $6,000 federal tax deduction, provided their modified adjusted gross income stays under $75,000 for individuals or $150,000 for married couples. Both spouses can claim the deduction if eligible, creating up to $12,000 in combined relief per couple.
This deduction phases out gradually for higher earners, disappearing entirely at $100,000 for singles and $175,000 for couples. The benefit runs through 2028.
Who Benefits Most
The White House estimates that 88% of Social Security recipients will pay no federal income tax on their benefits under this plan. However, the biggest winners are middle-income seniors who currently owe taxes on their Social Security payments. Low-income seniors already paying no federal tax will see minimal change, while high-income seniors above the thresholds receive no benefit.
Notably, the deduction only applies to those 65 and older receiving traditional Social Security retirement benefits. Younger recipients of Social Security Disability Insurance or survivor benefits don’t qualify.
Social Security Applauds Efforts
The Social Security Administration posted a release in support of the efforts.
“This is a historic step forward for America’s seniors,” said Social Security Commissioner Frank Bisignano. “For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans. 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.”
President Donald Trump will sign the bill into law on the 4th of July.