President Donald Trump keeps saying that Republicans’ mega tax and spending cut legislation will eliminate taxes on federal Social Security benefits.
It does not.
At best, Trump’s “no tax on Social Security” claim exaggerates the benefits to seniors if either the House or Senate-passed proposals is signed into law.
Here’s a look at Trump’s recent statements, and what the proposals would — or would not — do.
What Trump has said
Trump repeatedly told voters during his 2024 campaign that he would eliminate taxes on Social Security. As his massive legislative package has moved through Congress, the Republican president has claimed that’s what the bill would do.
Trump said on a recent appearance on Fox News’ “Sunday Morning Futures” that the bill includes “no tax on tips, no tax on Social Security, no tax on overtime.”
A temporary tax deduction
But instead of eliminating the tax, the Senate and House have each passed their own versions of a temporary tax deduction for seniors aged 65 and over, which applies to all income — not just Social Security.
And it turns out not all Social Security beneficiaries will be able to claim the deduction. Those who won’t be able to do so include the lowest-income seniors who already don’t pay taxes on Social Security, those who choose to claim their benefits before they reach age 65 and those above a defined income threshold.
The Senate proposal includes a temporary $6,000 deduction for seniors over the age of 65, contrasted with the House proposal, which includes a temporary deduction of $4,000.
The Senate proposal approved Tuesday would eliminate Social Security tax liability for seniors with adjusted gross incomes of $75,000 or less or $150,000 if filing as a married couple.
If passed into law, the tax deduction would last four years, from 2025 to 2029.
The deductions phase out as income increases.
White House touts impact
Touting a new Council of Economic Advisers analysis, the White House said Tuesday that “88% of all seniors who receive Social Security — will pay NO TAX on their Social Security benefits,” going on to say that the Senate proposal’s $6,000 senior deduction “is estimated to benefit 33.9 million seniors, including seniors not claiming Social Security. The deduction yields an average increase in after-tax income of $670 per senior who benefits from it.”
Garrett Watson, director of policy analysis at the Tax Foundation think tank, said conflating the tax deduction with a claim that there will be no tax on Social Security could end up confusing and angering a lot of seniors who will expect to not pay taxes on their Social Security benefits.
“While the deduction does provide some relief for seniors, it’s far from completely repealing the tax on their benefits,” Watson said.
Economic effect
The cost of actually eliminating the tax on Social Security would have massive impacts on the economy.
University of Pennsylvania’s Penn Wharton Budget Model estimates that eliminating income taxes on Social Security benefits “would reduce revenues by $1.5 trillion over 10 years and increase federal debt by 7 percent by 2054″ and speed up the projected depletion date of the Social Security Trust Fund from 2034 to 2032.
Discussions over taxes on Social Security are just part of the overall bill, which is estimated in its Senate version to increase federal deficits over the next 10 years by nearly $3.3 trillion from 2025 to 2034, according to the Congressional Budget Office.
Administration officials have said the cost of the tax bill would be offset by tariff income.
Recently, the CBO separately estimated that Trump’s sweeping tariff plan would cut deficits by $2.8 trillion over a 10-year period while shrinking the economy, raising the inflation rate and reducing the purchasing power of households overall.
