Proposed tax breaks for seniors could cut Social Security taxes and boost deductions
For millions of older Americans – especially those living on fixed incomes – the rising cost of living continues to put pressure on their financial security.
But recent legislative proposals backed by both Republican and Democratic lawmakers, as well as AARP, aim to reduce the tax burden on seniors and protect more of their Social Security income.
What's being proposed?
Two new bills in the House of Representatives focus on improving financial relief for older taxpayers:
- The TRUST Act (Tax Relief Unleashed for Seniors by Trump)
- The Bonus Tax Relief for America’s Seniors Act
Both are intended to help older Americans keep more of their income, especially those who have saved for retirement or rely heavily on Social Security benefits.
The TRUST Act: Doubling the income thresholds for Social Security taxation
What’s the problem?
Currently, seniors who have other sources of income in addition to Social Security – such as pensions, dividends, or self-employment income – may find their benefits taxed at the federal level.
These tax thresholds haven’t changed since they were enacted in 1984:
- $25,000 for single filers
- $32,000 for married couples filing jointly
If a retiree's combined income exceeds these thresholds, up to 85% of their Social Security benefits may be taxable.
How would the TRUST Act help?
The TRUST Act proposes:
- Raising the income threshold to $50,000 for single filers
- Raising it to $64,000 for married joint filers
- Indexing these amounts for inflation going forward
This adjustment could significantly reduce – or eliminate – the tax owed on Social Security for many seniors.
The Bonus Tax Relief for America’s Seniors Act: A larger deduction for seniors
In addition to raising the Social Security tax threshold, lawmakers want to increase the additional standard deduction for Americans aged 65 and older.
Current standard deduction (2025)
For the 2025 tax year:
- Single seniors 65+ can add $2,000 to their standard deduction
- Married couples (both 65+) can add $3,200 in total
What the new bill proposes
If passed, the new bill would:
- Increase the additional deduction for seniors to $5,000 for single filers
- Increase it to $10,000 for married couples filing jointly
As with the standard deduction, this enhanced bonus would also be adjusted annually for inflation.
AARP supports both bills
AARP, the nation’s largest nonprofit advocate for Americans over 50, has publicly endorsed both proposals.
Why AARP backs this legislation:
- It acknowledges the economic pressure on older Americans from inflation and rising living costs
- It seeks to protect Social Security benefits from being taxed
- It offers targeted relief that reflects the financial realities facing retirees today
AARP officials weigh in
AARP has long advocated for stronger financial protections for older Americans, especially as inflation and fixed incomes collide.
"This is a very important measure that will provide meaningful tax relief to older Americans," – Bill Sweeney, AARP Senior VP for Government Affairs
He emphasized that increasing the standard deduction and adjusting outdated income thresholds could make a real difference in retirees' financial security.
"This money belongs in your pockets – not the IRS’s." – Beth Finkel, AARP New York State Director
She underscored the frustration many seniors feel over being taxed on benefits they spent decades paying into, calling the bill a step toward restoring fairness.
These statements reflect AARP's broader commitment to protecting the economic dignity of Americans over 50 – and its ongoing efforts to ensure Social Security remains a secure and reliable source of retirement income.
Real-life impact for seniors
If both bills become law, the financial relief could be substantial:
- A typical married couple earning $85,000 could see their federal taxes reduced by an estimated $2,100
- Many Social Security recipients would no longer owe tax on their benefits
- Seniors would have a higher standard deduction, helping protect more of their income
Why these changes matter
When Social Security was first taxed in 1984, fewer than 10% of recipients were affected. But due to inflation and stagnant thresholds, today more than half of seniors pay taxes on some portion of their benefits.
Without updates to these outdated tax rules, the share of taxed Social Security income will only continue to rise.
What’s next?
Both bills are part of broader budget discussions in Congress. While there’s bipartisan support and backing from groups like AARP, whether the provisions will make it into final tax legislation remains to be seen.
Still, these proposals offer hope for seniors looking for greater financial stability and lower taxes in retirement.
