Who Qualifies For the New Senior Tax Bonus and How Much Could You Get?

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The passage of President Trump’s One Big Beautiful Bill (OBBB) will directly affect many seniors’ tax returns, offering a significant deduction that could leave more money in eligible retirees’ pockets. But, like most tax breaks, it comes with specific qualifications and an expiration date.

Here’s what older Americans need to know about who qualifies, how much you might get and how to claim it.

Who Qualifies for the Extra Tax Deduction?

This new deduction is only available for a limited three-year window, starting with 2025 taxes and phasing out after the 2028 tax year.

To qualify, be sure to meet these criteria:

• Age: You must be at least 65 years old.
• Income: Your modified adjusted gross income (MAGI) must be less than $175,000 if filing individually. Married couples filing jointly can both claim the deduction if both spouses are 65 or older and their combined MAGI is less than $250,000.

How Much Is the Deduction Worth?

Eligible individuals can deduct up to $6,000, and married couples who both qualify can deduct up to $12,000.

This deduction is in addition to the standard senior deduction most already qualify for — currently $1,600 for married couples and $2,000 for single filers who aren’t surviving spouses.

There’s a Catch

This deduction starts to phase out as income rises above certain levels:

• $75,000 for individuals
• $150,000 for joint filers

For every dollar above those thresholds, your deduction decreases by 6%. Once your MAGI hits the full cap, the deduction disappears entirely.

For example, if a single filer has a MAGI of $100,000, that’s $25,000 over the threshold. Multiply that by 6% and you’ll lose $1,500 of the deduction — bringing your benefit down to $4,500.

Can You Still Itemize?

This deduction doesn’t force you to choose between itemizing or taking it. Eligible seniors can claim the full deduction even if they itemize.

For example, if your itemized deductions total $30,000, you can add the $6,000 senior deduction to bring your total to $36,000 in write-offs.

How To Determine Your Deduction

Start by calculating your combined income, which includes:

• Adjusted gross income (AGI)
• Tax-exempt interest income
• Half of your Social Security benefits

It’s important to note: The bill did not eliminate taxes on Social Security benefits, despite some expectations.

Here’s how that still works:

• Single filers with combined income between $25,000 and $34,000 pay tax on up to 50% of benefits.
• Joint filers between $32,000 and $44,000 face the same.
• Above those ranges, up to 85% of benefits may be taxable.
• Only filers below $25,000 (single) or $32,000 (joint) avoid taxation on Social Security.

Much Needed Relief

While not permanent, this new deduction delivers meaningful short-term tax relief for millions of seniors, especially those on fixed or limited incomes.

If you’re 65 or older in 2025, make sure you talk to your accountant before filing taxes. Even partial savings could help stretch your retirement dollars further in the years ahead.

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