07/05/2025
Shared from a fellow CPA: "I know we've had a few threads on this, but I'm getting so many emails and messages, so I'm still talking about it.
YES, the email from the Social Security Administration is real, and YES, it is also very (very) misleading.
There is no official "no tax on Social Security" provision in the One Big Beautiful Bill Act. And there is definitely not a second provision, despite the use of the word "additionally" in the SSA email.
It's one new provision. One. And here's what it says: Seniors who are over the age of 65 are eligible for an extra deduction of up to $6,000.
If you are receiving Social Security retirement benefits and are not yet age 65, you do not qualify for the deduction.
If you are receiving SSDI and are not yet age 65, you do not qualify for the deduction.
**Edited to add that you do not have to receive Social Security benefits to take advantage of the deduction. It's age-dependent, not benefits-dependent. So if you've deferred your benefits to, say, age 70, you can still claim the deduction if you've reached age 65.
It is NOT an exclusion, it's a deduction, which means you must still report your Social Security income on your tax return if you are required to file.
It is NOT refundable (so if the deduction is more than your income, you don't get a refund).
It is temporary (it expires in 2028).
It is available for those who itemize and those who do not.
It is only available to taxpayers with a Social Security number.
It is subject to phaseouts, which means the deduction decreases as income increases. The phaseout kicks in at $150,000 for joint filers ($75,000 for all other taxpayers), and the deduction disappears completely once income reaches $350,000 for joint filers ($175,000 for all other taxpayers). **edited because I think my earlier math was too hasty
It does NOT eliminate taxes for all Social Security beneficiaries. According to the White House, taking into consideration credits and deductions, 64% of Social Security beneficiaries did not pay tax on their benefits before the deduction, and this bumps the number to 88%."
