You Make the Call - Jan. 29, 2026

Question: Martha, aged 67, called your office after hearing claims that the One Big Beautiful Bill Act (OBBBA) eliminated the tax on Social Security benefits. Concerned about how this might affect her retirement income and tax planning, she asks, “Is this claim accurate? Did the OBBBA make Social Security benefits tax-free?”

Answer: No, the new law does not exclude Social Security from taxable income; instead, it provides a temporary $6,000 senior deduction for taxpayers aged 65 or older with a work-authorized Social Security number (SSN). If married filing jointly, each eligible spouse may claim the $6,000 deduction, allowing a qualifying couple to deduct up to $12,000. Social Security benefits remain taxable under §86, which requires taxpayers with combined income above specified thresholds to include up to 50% or 85% of their Social Security benefits in taxable income. The new senior deduction begins to phase out at a rate of 6% of modified adjusted gross income (MAGI) above the threshold amount of $75,000 ($150,000 for a joint return). For this purpose, MAGI equals AGI increased by exclusions under §§ 911, 931 and 933. Note that the senior deduction is effective only for tax years starting after Dec. 31, 2024, and before Jan. 1, 2029.