What is the New Senior Deduction and Who Qualifies?

We commonly receive questions asking if the new tax deduction for seniors means Social Security income is no longer taxed. Social Security benefits themselves are still taxable under existing rules. However, the new law created an additional federal income tax deduction for taxpayers age 65 or older, which can significantly reduce — and in some cases eliminate — the federal tax owed on retirement income.
 
This is commonly described in the media as eliminating tax on Social Security, but technically it is a separate deduction, not a change to how Social Security benefits are calculated as taxable income.

What the senior deduction does
For tax years 2025 through 2028, eligible taxpayers age 65+ may claim an additional standard deduction of up to $6,000 per person.
 
Married couples where both spouses qualify may receive up to $12,000 additional deduction.
 
This deduction is claimed in addition to:

• The regular standard deduction
• The existing age-65 additional standard deduction already in tax law

 
Who qualifies
You qualify if:

• You are age 65 or older by the end of the tax year
• You have a valid Social Security number
• Your income falls below the phase-out thresholds

 
The deduction applies whether income comes from:

• Social Security
• Pensions
• IRA withdrawals
• Investment income
• Part-time work

 
Income limits (phase-out)
The deduction phases out for higher-income taxpayers based on Modified Adjusted Gross Income (MAGI):

• Single filers will see the phase-out begin at $75,000
• Married Joint filers phase-out begins at $150,000

As income rises above these thresholds, the deduction is reduced and eventually eliminated.
 
Effective period

• Applies to tax years 2025-2028
• Scheduled to expire unless Congress extends it