As Congress was approved by President Trump “Big, Beautiful Bill” On Thursday, Social Security Administration postponed the law They said This law “eliminates federal income tax on social security benefits for most beneficiaries.”
The claim that echoes Last promise by Mr. Trump To remove taxes on social security, millions of old and disabled people can come as welcome news that depend on the program for income. So does the bill distribute? Not completely.
One in Press releaseThe SSA stated that the tax and spending package, which the President is ready to sign in the law on Friday, ensures that about 90% of social security beneficiaries will no longer pay federal income tax on their benefits. ”
This figure draws on June 1 Analysis The Economic Advisors of the White House have said that 88% senior – or 51.4 million people – will not make any tax on their payment under measurement on social security as their deduction will be more than their taxable benefits.
The bill “includes the largest tax break in American history for the seniors of our country,” the CEA said, “The deduction ensures that the seniors have returned more money in their pockets through hard work through the years that earned their social security.”
Nevertheless, when it is true that the bill provides fresh relief for some people on social security, it is misleading to suggest that this measure removes with taxes on social security benefits, policy experts told CBS Manivatch. Rather, the bill provides relief by cutting a new “bonus” tax for beneficiaries.
“While the deduction provides some relief to the superiors, it is away from completely canceling the tax on their benefits,” said Garat Watson, director of the policy analysis at the Washington DC, Think Tank.
The Social Security Administration did not respond to the remarks request. The White House refused to comment.
How does the “Big, Beautiful Bill” affect social security?
The bill does not eliminate taxes on social security, but introduces a temporary deduction that beneficiaries can claim to reduce their federal income tax. In particular, this deduction applies to all of a senior’s income – not only for social security benefits.
Bobby Kogan, senior director of the Federal Budget Policy at the Nonpartison Think Tank Center for American Progress in Washington, DC, told CBS Manivatch that the bill does not change the taxation of social security benefits. Eliminating taxes on social security under the bill was impossible due to a Congress ban (dubbed) Bird rules Late West Virginia Sen Robert Bird) limits what the Senate may include in the Republican budget measures such as reconciliation bills.
What the bill does provides temporary tax deduction of up to $ 6,000 for senior citizens aged 65 and above. The tax brake is available to those with adjusted gross income of $ 75,000 or less and $ 150,000 or less to jointly filing couples. The deduction is determined to end at the end of 2028.
“Each spouse can take cuts for a total of $ 12,000, if both are 65-plas,” AARP explains it about it Analysis Of budget bill. The cut is for those who earn above those zodiac signs.
Under 65, social security recipients and people above the specified income limit are unfit for claiming new tax deduction. It will not benefit even many low -income seniors who do not already pay any federal income tax because they earn very little.
Kogan said, “Promote the amount you get to write when you already meet to write everything,” Kogan said.
A Nonpartison Policy Research Group Tax Foundation said in June 1 Report Freeing social security benefits from taxation will not change the income after tax income for the lower 20% of taxpayers, given that “those taxpayers have already been exempted from taxation on their social security benefits.”
The largest beneficiaries of the bill will be high-income senior, Chairman and co-founder of the National Association of Registrations Social Security Analysts, Martha Shedden, who focuses on social security education.
Kogan said, “People who benefit from the definition have to be rich, and those who are most benefiting are the richest people.”
More pressure on social security?
Providing a temporary tax deduction is likely to help some social security recipients, but it can also spoil the delicate financial state of the retirement program, Kogan said. Social security is on track Remove your trust fund by 2034 If the Congress does not take action.
He said, “We already have no problem of adequate money in trust funds. This bill also pays less money in Trust Fund,” he said.
Penn Wharton Budget Model, a tank of the University of Pennsylvania, which studies fiscal issues, Estimate The abolition of income taxes on social security benefits will increase the federal revenue less than $ 1.5 trillion in 10 years and will increase by 7% in federal loans by 2054.
Since the debate continues to increase social security by offering tax relief to old Americans, one thing is clear, and perhaps the benefits of the profit politically unattainable. According to an AARP-funded survey From the National Academy of Social Insurance released in January, 85% of Americans feel that the profit should not be reduced, or that they should be increased, even if it means to increase tax on some or all Americans.
Deb Whitman, Chief Public Policy Officer of AARP, said at the STA, “In fact, all Americans want their social security benefits to be preserved and are ready to ensure that to ensure that future generations continue to provide meaningful assistance to future generations.”TeaEment after the survey was released.
Contributed to this report.
