Just before President Trump signed his tax bill into law, the Social Security Administration sent an email to millions of Americans misrepresenting its effect on Social Security taxes. In fact, the bill pushes 17 million people off of Medicaid and ACA health plans and into the ranks of the uninsured. Experts say it also eats into Social Security’s revenues, weakening the program, reports Tara Siegel Bernard for The New York Times.
While President Trump talked about ending taxes on Social Security benefits, the bill does not end or reduce taxes on Social Security income. The SSA email stating otherwise is not true. For starters, the majority of people receiving Social Security income–about two in three people–do not pay taxes on this income because their income is too low.
Middle- and upper-middle-class households–representing less than half of people receiving Social Security benefits–could benefit from an “enhanced deduction” in the Trump bill. This deduction could lower their taxes writ large, depending upon their income. But, it is separate and apart from Social Security.
Certain adults over 65 with incomes under $75,000 (individuals) or $150,000 (couples) should see an extra $6,000 deduction ($12,000 for couples). If their income is higher, they get a lower deduction. They get no deduction if their income is above $175,000 ($250,000 for couples.) Adults between the ages of 62 and 64 get no deduction.
People earning less than $63,300 pay taxes on about one percent of their Social Security income.
The White House Council of Economic Advisers estimates that about 88 percent of people receiving Social Security benefits will not pay taxes on this income, up from 64 percent. But, it’s not yet clear whether those numbers are accurate. Moreover, unlike the tax cuts for the ultra-rich in the Trump bill, the enhanced deduction is only in effect this year and the three following years, ending in 2028.
Here’s more from Just Care:
- Expand Social Security, don’t means test it
- DOGE causes chaos at Social Security
- 2025: Our Social Security system remains strong!
- More people are claiming their Social Security early
- 2025: What will your Social Security benefits be when you retire?
