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Why the Big Beautiful Bill did not eliminate taxes on Social Security
The Big Beautiful Bill—a nickname often used by President Donald Trump to refer to legislation he champions—did not eliminate Social Security taxes due to the Byrd rule.
The Byrd Rule is a Senate rule that limits what can be included in a reconciliation bill—a type of budget legislation that can pass with a simple majority (51 votes), thereby bypassing the 60-vote filibuster threshold. The Byrd rule is named after Senator Robert Byrd, who introduced it in the 1980s to keep reconciliation focused strictly on budget-related matters. Social Security cannot be touched in any way as part of a budget-oriented bill as part of this rule.
Since the Senate Republicans are a narrow majority, it was a better choice to pass the bill this way, giving it a better chance of passing. Sean Williams for The Motley Fool explains this and other factors here…
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what about taxes on Social Security Disabilty? Will there be a tax break if you are not 65?
Lori:
H.R. 1 (the One Big Beautiful Bill Act) actually doesn’t specifically discuss Social Security benefits. The reconciliation “work around” developed by Congress creates a bonus standard deduction for filers age 65 and older. In other words, the H.R. 1 change relates to the standard deduction bonus in general, with no specification as to what types of income comprise one’s adjusted gross income. The benefit that would accrue to retirement benefits would be the same for filers receiving disability benefits.
On your second question, I would note that both the House and Senate versions of H.R. 1, in crafting the increased standard deduction provision, have defined the term “senior” as age 65 and over. This is consistent with the IRS definition of “senior,” and continues the definition used in the Tax Cut and Jobs Act of 2017. Any changes to the definition at this point would have required a last-minute amendment, but the Bill has now been passed and was signed into law yesterday.
Thanks for the question, and if we can be of any further assistance, please contact our Social Security advisory Service at 888-750-2622 or via email at SSAdvisor@AmacFoundation.org.
Gerry Hafer
AMAC Foundation Social Security Advisor
The above is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org
What about an increased standard deduction for those seniors who retire early at age 62?
Joe:
Unfortunately, both the House and Senate versions of H.R. 1 (the “One Big Beautiful Bill”), in crafting the increased standard deduction provision have defined the term “senior” as age 65 and over. This is consistent with the IRS definition of “senior,” and continues the definition used in the Tax Cut and Jobs Act of 2017. Any changes to the definition at this point would require an Amendment by the Senate, so the best way to address your concern would be to contact your state senator.
Gerry Hafer
AMAC Foundation Social Security Advisor
The above is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org
He promised NO TAX On SOCIAL SECURITY.
Why punish Seniors?
Squeaky:
Thanks for the comment. You are absolutely correct. The promise was one of the frequent campaign pledges the Trump Administration made during the runup to the November election. Unfortunately, the momentum on this specific pledge ran into a somewhat obscure provision in the reconciliation rules (the “Byrd Rule”) that blocked the House’s ability to accomplish a change to the Social Security Act structure. But all is not lost. As you’re probably aware, a compromise has been inserted into H.R. 1 (The One Big Beautiful Bill Act) to provide a “bonus” standard deduction for taxpayers aged 65 and over ($4000 in the House version, $6000 currently in the Senate version). This “bonus” is intended to mitigate some of the impact of including Social Security in taxable income.
Will it remain in the Bill that eventually goes to the President’s desk? Who knows, but in reviewing the Senate chatter over the weekend, I see no change to that provision. But again, who knows? Stay tuned for updates on this issue in the days and weeks ahead.
Gerry Hafer
AMAC Foundation Social Security Advisor
The above is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org
Why should you have to pay tax on money you already paid once while working and now again you are paying on your social security check it’s not fair or right
Sally:
Thank you for comment! We know that this is a question on the minds of many seniors, especially now as the HR 1 (the One Big Beautiful Bill Act) makes its way through Congress. We agree with the concern expressed by so many about the burden of this additional tax, and are pleased to note that the issue has been addressed in AMAC’s Social Security Guarantee proposal (see https://amac.us/social-security-guarantee for the full proposal) we hope to present to the appropriate congressional committees soon. Many label the taxation of Social Security benefits a “double tax,” but technically it is not. I don’t want to get too far into the weeds, but check out the article posted on this site a few weeks ago explaining the issue in some length (https://socialsecurityreport.org/perspectives-on-the-taxation-of-social-security-benefits).
As you probably know, President Trump’s promise to end this taxation has been sidelined, at least temporarily, and it now appears that a compensating bonus personal exemption is likely to be in the final bill. As we understand the current text in HR 1, the “bonus” standard deduction ($4000 in the House version, $6000 currently in the Senate version) is for every individual filer. At this point, the Senate version is still undergoing review and adjustment, so the final version that goes to the President for approval is still uncertain. This measure will provide some measure of relief on the excess tax issue, but AMAC will continue to advocate a more permanent solution via the proposal mentioned earlier.
Thank you again for commenting!
Gerry Hafer
AMAC Foundation Social Security Advisor
The above is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org
Is the $4000 deduction per person or for married, filing jointly?
Jim:
Thank you for the question. As we understand the current text in HR 1 (the “One Big Beautiful Bill Act”) the “bonus” standard deduction ($4000 in the House version, $6000 currently in the Senate version) is for every individual filer. So, a married couple would see either an $8000 or $12000 additional standard deduction at tax filing time. At this point, the Senate version is still undergoing review and adjustment, so the final version that goes to the President for approval is still uncertain. Stay tuned to this website for updates.
Gerry Hafer
AMAC Foundation Social Security Advisor
The above is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org
I wasn’t aware that Donald Trump was a “former President” as of June 19, 2025.
Makes you suspect the legitimacy of the authors ….
Doug:
Thanks for catching that! The post has been corrected.
Gerry Hafer
AMAC Foundation Social Security Advisor