Bipartisan Push to End Social Security Taxes Could Mean Bigger Checks for Millions

Social Security plays an important role in many people's retirement plans. It not only provides guaranteed income, but benefits also receive an annual inflation adjustment. That means seniors are protected from rising costs over time.

But if there's one major problem with Social Security, it's that not all recipients get to keep their benefits in full. Thanks to an outdated rule, Social Security benefits can be subject to taxes, and the thresholds at which those taxes apply are very low.

The good news is that two bills seek to eliminate taxes on Social Security, and if they pass, they could ease the financial strain for many retirees.

Taxes on Social Security are a big burden

Since 1984, a portion of Social Security benefits has been subject to federal income tax. The problem is that the income thresholds for those taxes are very low and have not been adjusted for inflation in decades.

Social Security benefit taxation hinges on provisional income, which is calculated as the sum of adjusted gross income, tax-exempt interest income, and 50% of annual Social Security payments.

Taxes on benefits apply when provisional income equals or exceeds $25,000 for single filers and $32,000 for married couples filing jointly. For singles, provisional income over $34,000 means you may be taxed on up to 85% of benefits. The same consequence applies to married folks with provisional income above $44,000.

Starting in January 2027, the average Social Security retirement benefit will be $2,095. After the 2027 cost-of-living adjustment (COLA), that figure is projected to rise to about $2,170 per month, or $26,040 per year.

For someone receiving the projected average benefit of $2,170 per month, 85% would be about $1,845. That's the amount that could count toward taxable income, not the amount you would pay in taxes.

The OBBBA gives Social Security recipients a temporary reprieve

Trump's One Big Beautiful Bill Act, or OBBBA, has been a boon to seniors on Social Security. That's because it included a $6,000 senior tax deduction that reduces many Social Security recipients' provisional income below the thresholds where taxes on benefits apply.

In July 2025, the White House Council of Economic Advisers estimated that 88% of seniors on Social Security were exempt from having their benefits taxed thanks to the OBBBA. But the new senior tax deduction did not eliminate the obligation to pay taxes on Social Security benefits.

Not only that, but the $6,000 senior deduction is set to expire after 2028. This means that a good number of seniors who are not paying taxes on their Social Security benefits now may have to start paying in a few years.

Two bills seek to eliminate taxes on Social Security

In April of 2025, U.S. Representative Angie Craig (whose term ends in January 2027) reintroduced a bill to eliminate federal taxes on Social Security benefits. Called the You Earned It, You Keep It Act, the bill seeks to raise the wage cap for Social Security taxes to make up for the lost revenue that would come with getting rid of taxes on benefits. The 2027 wage cap will be $192,300.

The Senior Citizens Tax Elimination Act, meanwhile, was introduced in February 2025 by U.S. Senators Tommy Tuberville and Tim Sheehy. Tuberville called taxes on Social Security benefits a "second tax." The bill seeks to get rid of those taxes without introducing additional tax increases to compensate.

Unlike the OBBBA, both of these bills, if signed into law, would serve as a permanent fix to the problem of taxes on Social Security benefits.

Getting rid of taxes on Social Security may be an uphill battle

This isn't the first time lawmakers have fought to eliminate taxes on Social Security checks. Even President Trump himself established that as a big goal during his presidential campaign.

But those seeking to eliminate taxes on Social Security may face an uphill battle. Not only would lawmakers need to agree on a proposal, but taxes on benefits help fund Social Security. 

At a time when the program is facing a funding shortfall that could result in widespread benefit cuts, Congress may ultimately be loath to adopt a law that virtually guarantees less revenue. The 2026 Social Security Trustees Report projects that Social Security funds will deplete in Q4 2032 if Congress doesn't take action. At that point, recipients would only receive 78% of benefits payable.

Bottom line

When seniors' retirement savings are stretched thin, Social Security benefits can often come to the rescue. But losing a chunk of those benefits to taxes really stings for seniors who aren't wealthy per se, but have an income high enough to be taxed.

If taxes on Social Security were to be eliminated, it could spare many retirees a world of financial stress. So lawmakers pushing that agenda is a positive thing. Seniors do need to realize, though, that lawmakers might face hurdles, and that eliminating taxes on Social Security benefits could worsen the solvency issues the program already faces.

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