Seniors relying on Social Security may have a new tax deduction in 2026.
President Donald Trump’s One Big Beautiful Bill created a $6,000 deduction for seniors on top of the current standard deduction, provided they earn an income of $75,000 or less individually. To qualify, you must be age 65 and older and meet the income requirements.
Why It Matters
Tax and financial experts say that as a result of the new deduction, middle-income retirees will be able to save a few hundred to thousands of dollars on their tax bills. However, higher earners could meet the phaseout limit fast.
What To Know
The senior deduction is $6,000 for single seniors earning up to $75,000, or $12,000 for married couples earning up to $150,000 if they file jointly.
This extra benefit takes effect for the 2025 tax year and will be available through 2028.
The bonus comes alongside the existing extra standard deduction for seniors, which the IRS has increased as well in its annual inflation adjustments. In 2026, the additional standard deduction for seniors grew to $2,050 for single filers and $1,650 per spouse for married couples filing jointly.
“The rules that tax your Social Security benefits haven’t budged since the 1980s,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek. “They were never adjusted for inflation. So half of all beneficiaries now pay tax on their benefits, and that number stays stuck above 50 percent forever unless something actually changes. This deduction doesn’t fix that. It just lets politicians say they did something while the real problem sits there untouched.”
While the new change does not mean Social Security is no longer taxable, the overall effects of seniors’ taxes may be minimized, said Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast.
“Higher deductions can help reduce overall taxable income and soften the impact of those taxes,” Thompson said.
What People Are Saying
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: “What this really costs. You’re getting four years of a tax break funded by more borrowing. The bill gets sent to younger workers and future retirees. That’s the trade-off nobody talks about. Honestly, you just get a temporary tax coupon, not a permanent solution. And the system’s actual problems? Still there.”
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “In the near term, this is a meaningful benefit for most retirees, as it increases deductions and provides some tax relief over the next few years. However, it’s important to note that the Enhanced Senior Deduction is currently set to expire in 2028, meaning it would need to be extended by a future administration.”
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Few groups have been as affected by inflationary pressures in recent years as much as seniors, many of whom have seen dramatic increases in essential spending. For many seniors, this provides additional financial relief through a smaller tax bill that should boost their savings at a time when many beneficiaries need it.”
What Happens Next
The new deduction will expire at the end of Trump’s second term, so it applies to tax years 2025 through 2028.
“Longer term, the bigger issue remains unresolved: the continued strain on the Social Security trust fund,” Thompson said. “As more benefits are paid out and tax revenue is reduced through deductions, the pressure on the system increases. While today’s changes help retirees in the short run, they may also contribute to higher taxes or policy changes down the road to address funding gaps.”
