By John Adams, Chairman
If 2025 can be described as anything when it comes to seniors, Social Security, and Medicare, it might be newsworthy. We had DOGE, Medicare Part B premiums once again rose faster than inflation, and Social Security stopped mailing paper checks to beneficiaries—not to mention a dissatisfying COLA of 2.8 percent. However, the passing of a new measure in the One Big Beautiful Bill Act (OBBBA) that will reduce taxes on Social Security benefits for some seniors was a positive development for those eligible for the tax break, which is available from the 2025 to 2028 tax years.
How Much is the OBBBA Tax Break for Seniors?
The OBBBA created a $6,000 tax break for individuals (or $12,000 for couples) over the age of 65. This works as an automatic additional deduction that goes on top of the standard deduction or itemized deduction you already take, as well as the additional exemption of $2,000 for single filers and an additional $1,600 for couples.
Who Benefits From the Tax Break?
With the OBBBA’s tax break in place, seniors who are individual tax filers will start paying federal income taxes once they make more than $23,625. For couples, that figure is $31,500. The tax break starts phasing out for individuals who earn $75,000 or more per year (and for couples who earn more than $150,000), reaching zero for individuals who earn at least $175,000 (and for couples who earn at least $250,000).
In short, it’s middle-income seniors who benefit the most, those who earn enough to pay taxes but less than the phase-out threshold. Low-income seniors will not see a change, and that’s a big piece of the pie. Our research estimates that the median senior gets by on less than $2,000 a month, which wouldn’t be enough to qualify.
How Do I Make Sure I Get This Tax Break if I’m Eligible?
The deduction should automatically be included when you file your taxes. Tax preparing software such as TurboTax, will automatically check if you qualify and add it to your return. Professional tax preparers, such as H&R Block, should also automatically add the tax break as well, but in both cases, it might be a good idea to read your final return before you send it to confirm the senior tax break is included.