More than 70 million Americans receive benefits from the Social Security Administration—whether retirement, disability, or Supplemental Security Income (SSI). One big question recipients face ever year at tax time: Do I owe federal income tax on those benefits? For a growing number of seniors in recent years, the answer has been yes, since the formula for determining whether Social Security is taxable hasn’t been adjusted for inflation in more than four decades.
But this year, as recipients prepare their 2025 tax returns, there’s another wrinkle, namely President Donald Trump’s “no tax on Social Security” promise. What sounds like a blanket exemption is actually more complicated and limited: A new, temporary tax deduction that will eliminate taxes for some seniors and reduce them for others, but doesn’t change whether Social Security is included in your taxable income.
The $6,000 Senior Deduction
Under the One Big Beautiful Bill Act (OBBBA) Trump signed last July, seniors age 65 and older can claim a new temporary $6,000 deduction beginning in 2025 (the deduction expires after 2028). The deduction is available to taxpayers who itemize and those who claim the standard deduction. This is a stand-in for Trump’s promise of “no tax on Social Security”—there is no separate provision eliminating taxes on benefits.
To claim the deduction, you (and your spouse, if you are married) must have a valid Social Security number. If you are married, you must file jointly to claim the deduction.
The deduction is per qualifying senior, not per return. That means that for a married couple, if one spouse is over 65, the deduction is $6,000. If both spouses are over 65, the deduction is $12,000.
The deduction begins to phase out when income exceeds $150,000 for married taxpayers filing jointly and $75,000 for all other taxpayers. For purposes of the deduction, the term income includes the taxable portion of your Social Security benefits, as well as other retirement benefits, such as pension payments and 401(k) or IRA distributions, as well as investment income and other earnings. A phase-out means that the benefit decreases as your income increases. Here, the deduction begins to shrink at a rate of 6% over those amounts, which means that for every $100 extra you earn, you lose $6 of the deduction. That means the deduction completely disappears once income reaches $350,000 for joint filers and $175,000 for all other taxpayers.
The deduction is also age-based, not benefits-based (there’s no real connection to Social Security). To claim the deduction, you must have reached age 65 as of the end of the tax year. If you are receiving Social Security benefits (including SSDI) and are not yet age 65, you do not qualify for the deduction. If you are over age 65 and do not yet receive Social Security benefits, you still qualify for the deduction.
Taxpayers love a good deduction, but it’s important to understand that it only lowers your taxable income. If your taxable income is already too low to result in a tax bill, you won’t get any additional benefit (like a refund) from the deduction. If you didn’t need to file before the deduction was applied, there’s still no need to file.
Importantly, the deduction does not change whether your Social Security benefits are taxable. If your Social Security benefits are taxable under current law, that does not change. If they’re not taxable under current law, that doesn’t change either. So you’ll still want to give your SSA-1099 to your tax preparer.
Which Social Security Benefits Are Taxable?
Social Security retirement benefits are meant to replace about 40% of pre-retirement income (on average), though your actual benefit depends on your earnings history. In early 2025, the average retired worker benefit was $1,976 per month, or about $23,000 annually, thanks to cost-of-living adjustments (it’s $2,071 in 2026).
Whether your benefits are taxable for federal income tax purposes depends on something called combined income. Here’s the formula: add together your Adjusted Gross Income (AGI), your nontaxable interest (like municipal bond interest), and ½ of your Social Security benefits. Then compare that number to the base amount for your filing status. Your benefits are not taxable if your combined income is below the applicable base amount:
If those numbers seem low, you’re not imagining it: The income thresholds for taxing Social Security have not been adjusted for inflation since 1984. (If the married filing jointly $32,000 base amount had been adjusted for inflation, it would now be about $99,000.)
Example #1 (Not Taxable)
Let’s say you’re a single taxpayer with Social Security benefits of $23,712, plus $1,000 in dividends, $1,000 in taxable interest, and $6,000 in other income.
Your combined income is $19,856 = $11,856 (1/2 of SS benefits) + $8,000 (dividends, taxable interest, and tax-exempt interest). Since $19,856 is below $25,000, none of the benefits are taxable.
Example #2 (Partially Taxable)
Let’s say you’re a single taxpayer with Social Security benefits of $23,712, but you have more income—in this case, $10,000 in dividends, $10,000 in taxable interest, and $12,000 in other income.
Your combined income is $43,856 = $11,856 (1/2 of SS benefits) + $32,000 (dividends, taxable interest, and tax-exempt interest). That exceeds $25,000, so part of the benefits would be taxable.
A quick note: if you rely only on retirement income and Social Security benefits, it may be tempting to equate the two. But they’re very different. Your required minimum distributions (RMDs) from IRAs and 401(k)s can increase your combined income and cause more of your Social Security benefits to become taxable.
And when calculating whether any benefits are taxable, include only those benefits that are legally yours. If you and your child receive benefits, but the check for your child is made out in your name, use only your portion of the benefits to determine whether you might owe tax. The benefits paid to the child must be added to your child’s other income to determine whether any of those benefits are taxable.
How Much Can Be Taxed?
If part of your Social Security benefits is taxable, the taxable amount depends on the total amount of your benefits and your other income. As a rule, the higher your total income, the higher the percentage of your Social Security benefits subject to tax.
If you owe tax on your Social Security benefits, typically up to 50% of your benefits will be taxable. However, up to 85% of your benefits can be taxable if your combined income is more than $34,000 ($44,000 if you are married filing jointly) or if you are married filing separately and lived with your spouse at any time during 2025.
No one pays federal income tax on more than 85% of their Social Security benefits.
What Kinds Of Social Security Benefits Are Taxable?
Not all kinds of Social Security benefits are potentially taxable.
When most people refer to Social Security, they mean retirement benefits. Those are paid to workers who have earned enough credits and reached at least age 62 (that’s the early retirement age, the full retirement age varies depending on when you were born).
Spousal benefits are paid to a spouse of a retired worker (generally up to 50% of the worker’s benefit at full retirement age), while survivor benefits are paid to widows, widowers, and sometimes dependent children of deceased workers. Spousal benefits and survivor benefits are taxed the same way as retirement benefits.
Social Security Disability Insurance (SSDI) benefits are paid to workers who become disabled and meet work credit requirements. Even though it’s called “disability,” it’s technically part of Social Security insurance, and it’s taxed the same way as retirement benefits.
Supplemental Security Income (SSI) is different. SSI is a needs-based program for low-income elderly or disabled individuals. SSI benefits are never subject to federal income tax.
What About State Taxes?
Most states do not tax Social Security benefits. Only nine states (Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia) tax Social Security in some form.
That said, many of these states provide income-based exemptions or credits, while others follow the federal taxability formula. So “taxed” often doesn’t mean fully taxed.
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