Trump Promised Tax Relief for Seniors — Here’s What Retirees Are Seeing Now
Written by
Sarah Li Cain
Edited by
Brendan McGinley
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President Donald Trump pledged that there would be “no tax on tips, no tax on overtime and no tax on Social Security for our great seniors” on his 2024 campaign trail. He signed into law the One Big Beautiful Bill Act (OBBBA) in July 2025, which fulfills some of those promises.
While some seniors do still pay tax on Social Security most do not now, and there is an additional $6,000 deduction for taxpayers who are at least 65 years old, according to the IRS website, or $12,000 for qualifying spouses. There is also tax relief for those who earn tips and overtime pay.
The question is how much of that promise will really help? Sure, the OBBBA offers some relief via tax deduction, but benefits may not be beneficial to all income brackets. Nor are these tax reductions made permanent.
How Do Tax Deductions Benefit Me?
Trump’s 2025 campaign promised benefits in more absolute terms, but the reality is that it may not be possible to directly lower the amount you pay in taxes. That’s where deductions come in.
Deductions are where you can skim off some of your taxable income, so that you may end up paying fewer taxes overall. However, that depends on many other factors like the type of income you make and what other deductions you may qualify for.
Under the new law, the $6,000 (or $12,000 for married couples filing jointly) additional deduction is only valid through 2028. You can take advantage of this deduction whether you itemize or use the standard deduction.
The deduction starts to phase out for those who are single and earning at least $75,000 in modified adjusted gross income (MAGI), or $150,000 for married couples.
The OBBBA also gives taxpayers up to a $25,000 annual deduction on tips for those working in qualifying jobs. This is also valid until 2028.
What About Social Security Taxes?
Technically, your Social Security benefits may be taxable, though it depends on factors like your income. For single filers, taxes start kicking in if your income is higher than $25,000, and for married couples filing jointly, it starts at $32,000.
The IRS says you should be able to figure out the taxable portion of your Social Security benefits, and as income goes higher, around 85% of the benefits you receive could be subject to taxes.
With the new deduction amount, retirees could lower their taxable income and not pay taxes all on their Social Security benefits. According to the White House, around 88% of Social Security recipients could owe no tax on their benefits, but your percentage owed will depend on your income sources and how much you earn.
So What Can Retirees Expect?
Many have touted the changes as a way to stack tax deductions, but there are also critics.
For example, the Tax Foundation describes the additional deductions and no tax on tips or overtime as “gimmicks” that take away from other tax policies. CBS News also reports that the OBBBA doesn’t totally eliminate Social Security taxes. As in, those who earn above a certain threshold may not see any benefits at all.
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