If you’re receiving Social Security and continue to tax those benefits, some significant financial respite may be on its way. President Donald Trump’s budget overhaul has in it a new proposal, referred to as the One Big Beautiful Bill, that would allow you to retain up to $12,000 more of your Social Security benefits. And here’s the best part: you only need to satisfy two easy requirements to be eligible.
What the bill does
The One Big Beautiful Bill is a sweeping package aimed at reducing the national deficit, making Trump’s 2017 tax cuts permanent, and spending more on defense and immigration. Buried in this nearly 1,000-page bill, however, is something quite specific to seniors: a tax deduction for those 64 and older who owe taxes on their Social Security benefits.
Now, most seniors still have to pay federal taxes on their benefits. But under this bill, if it becomes law, those taxes will be significantly lowered—or even cut out—for most middle-income retirees.
How much more will you keep?
Here’s the calculation:
- If you file alone, you could save an extra $6,000 of your Social Security money.
- If you file together with a spouse, you could keep an extra $12,000.
That’s real money that otherwise would go to taxes—and now it could stay in your pocket instead.
The two easy requirements
To be eligible for the full benefit under this new law, you must:
1. Be 64 or older, and
2. Now pay federal income taxes on your Social Security benefits.
That’s it.
But your income is included, too. The benefit starts to phase out for individuals earning more than $75,000, or $150,000 for couples. It disappears at $175,000 for singles and $250,000 for couples.
Who benefits most?
According to the White House, about 88% of retirees who are already paying taxes on their benefits stand to gain from this tax cut. But here’s the important thing to know: if you already don’t owe taxes on your Social Security—typically because your income is low—you won’t see anything. This new cash is aimed at middle-to-upper-income seniors who still owe taxes on their benefits.
Why it matters
“This is the largest tax relief in American history for our nation’s seniors,” White House officials stated. It’s a move that gives retirees a little extra room to breathe—especially those who toiled, saved for retirement, and then discovered themselves being hit with tax bills on the benefits they had already earned.”
If this bill does pass into law—and it’s going very quickly through Congress—you could be seeing this change take place fairly quickly. But remember: the tax cut sunsets in 2028, at the end of Trump’s potential second term.
Who qualifies for the $6,000 ‘senior deduction’ in the Big, Beautiful Bill?
What is a Plan to Achieve Self-Support (PASS) and how can I get one?
This isn’t for everyone, but it’s big
If you’re a retiree who still has taxes withheld on your Social Security, this could be a game-changer. But if your income is already below the level where it would be taxed, or above the level where you would qualify once the phase-outs take effect, it won’t make much difference to you.
Either way, it’s worth taking notice of this bill—because if it passes, you just might be able to hold onto thousands of your hard-earned dollars.
