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Trump's "No Tax on Social Security" May Not Be What You Think It Is
Key Points
A deduction only reduces taxable income.
Your situation depends on factors such as income, deductions, and filing status.
The senior deduction expires at the end of 2028.
President Donald Trump spent months on the campaign trail promising to end taxes on Social Security benefits. And, after officially signing the One Big Beautiful Bill Act (OBBBA) into law in July 2025, Trump's White House issued a press release declaring that 88% of all seniors who receive Social Security will pay no taxes on their benefits.
As you plan for retirement -- or the remainder of your retirement -- it's important to note: While the White House's announcement is technically true for now, it doesn't tell the whole story.
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Image source: Getty Images.
The promise vs. reality
The eye-catching part of the OBBBA is a new "senior bonus" deduction worth up to $6,000 per person or $12,000 per married couple. And naturally, many Americans aged 65 or older will benefit from deducting thousands of dollars from their taxable income.
Still, while the White House describes the deduction as "promises made, promises kept," it isn't a tax cut. Instead, it's a deduction, and a temporary one.
The deduction featured in the OBBBA applies only to tax years 2025 through 2028, then disappears again. More importantly, it does not repeal the underlying IRS rules that decide how much of your Social Security benefit is taxable.
Social Security remains taxable income
The core rules regarding taxes in retirement remain unchanged, despite the OBBBA. When determining your tax burden, the IRS will look at your combined income, defined as:
- Adjusted gross income
- Plus tax-exempt interest
- Plus 50% of annual Social Security benefits
Per original rules, the taxable portion of benefits varies by filing status and income. For example:
Filing Status |
Combined Income |
Taxable Amount of Benefits |
|---|---|---|
Single/head of household |
Under $25,000 |
0% |
$25,000–$34,000 |
50% |
|
Over $34,000 |
85% |
|
Married filing jointly |
Under $32,000 |
0% |
$32,000–$44,000 |
50% |
|
Over $44,000 |
85% |
|
Married filing separately |
Living apart: Same thresholds as single |
0–85% |
Living with a spouse any time during the year |
Up to 85% |
Data source: Mercer Advisors.
The deductions included in the OBBBA phase out as income rises. For example, the break begins to phase out at $75,000 modified adjusted gross income (MAGI) for singles, and at $150,000 for couples. The break disappears entirely for a single earner with a MAGI of $175,000 and a couple with a MAGI of $250,000.
Don't count on escaping the tax man for good
Despite the fanfare, Social Security remains taxable for many recipients, and the rules that drive that tax bill have not changed. Withdrawals from 401(k)s, IRAs, interest, dividends, and other sources of income all feed into the combined income formula and may make benefits taxable.
For some retirees, "No tax on Social Security" may feel like little more than a marketing slogan for a temporary tax deduction.
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