No, Social Security Taxes Have Not Been Eliminated — Here's What Really Changed
You may have seen the email. It came straight from the Social Security Administration, celebrating a new law called the "One Big Beautiful Bill", signed on July 4th by President Donald Trump. The email claimed this bill “eliminates federal taxes on Social Security benefits for most recipients.”
Sounds great, right?
The only problem? It’s not true.
NBC News reported on the misinformation and quoted several political officials, including New Jersey Rep. Frank Pallone, the top Democrat on the Energy and Commerce Committee, who stated on X:
“This email went to every Social Security subscriber and every word of it is a lie. Social Security benefits are still taxed. This big, ugly bill doesn’t change that. It’s disturbing to see Trump hijack a public institution to push blatant misinformation.”
As a financial advisor who’s been doing this for decades, I can tell you plainly: Social Security benefits are still taxed, and no, this bill did not magically make them disappear.
The truth is more complicated—and unfortunately, very few headlines or emails are giving you the facts straight. So here’s a breakdown of what’s real, what’s misleading, and what you need to know as a current or future retiree.
What’s Real: A New Tax Deduction for Seniors
The "One Big Beautiful Bill" includes a new tax deduction:
- $6,000 for individuals age 65+
- $12,000 for married couples filing jointly, both age 65+
That sounds good. But it’s not the same as eliminating taxes on Social Security. This deduction:
- Only applies if you’re 65 or older
- Only applies from 2026 through 2028
- Phases out if your income is over $75,000 (single) or $150,000 (joint)
- Does not require you to be on Social Security to use it
What’s Not Real: The Promise That Social Security Taxes Are Gone
That part? Completely false.
Despite the political spin, nothing in this bill changed the existing rules that allow up to 85% of your Social Security benefits to be taxable depending on your income. That formula is still there. The tax brackets are still in place.
If you're already receiving benefits or planning to claim them soon, do not assume your Social Security is now tax-free, because it’s not.
10 Questions We’re Hearing from Clients
1. Did this new law eliminate taxes on Social Security? No. Social Security benefits can still be taxed, just like before.
2. Why did the SSA say otherwise? The SSA email was misleading and irresponsible. It confused a general tax deduction with a specific benefit change.
3. What is this deduction, then? It’s a temporary deduction (2026–2028) for people 65+, regardless of whether they’ve started Social Security.
4. If I’m under 65 and on Social Security, do I get it? No. The deduction starts at age 65. If you’re younger, even if you’re retired and receiving Social Security, it does not apply to you.
5. I’m turning 65 next year. Should I start Social Security early to get the tax break? No. This is a common mistake. You qualify for the deduction whether or not you start Social Security.
6. Will this deduction last forever? No. It’s only guaranteed for two years—2026 and 2027. It’s unclear what happens after that.
7. Does everyone over 65 get it? Not if your income is too high. It phases out at $75,000 (single) and $150,000 (joint), and disappears at higher incomes.
8. Is this a big win for retirees? It helps some people, yes. But it’s not the sweeping change some are claiming—and it creates more confusion than clarity.
9. Could this hurt Social Security’s future funding? Yes. Experts estimate the deduction could cost $30 billion annually, bringing Social Security’s trust fund closer to depletion by about a year, now expected around 2032.
10. What should I do now? Stay calm. Don’t make big Social Security decisions based on hype or headlines. And please—consult with a qualified advisor before taking action.
Final Thought: Don’t Fall for Political PR
This is more than just a policy detail—it’s a matter of trust. When the government sends out emails claiming something that simply isn’t true, it confuses millions of people. And in our world, that kind of confusion can lead to costly, irreversible mistakes.
We’re here to help you sort fact from fiction and make smart decisions based on your real financial picture, not political noise.
Have questions about your benefits, retirement income, or tax planning strategy? We’re here to help. Schedule a consult with Team Treece. We’ll give you an honest answer, even when it’s complicated.
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Social Security Solvency: 7 Common Myths