Could removing taxes on Social Security really help senior citizens in the US? Former President Donald Trump has often said that retired people should not have to pay tax on their Social Security income. While many saw this as just another campaign promise, his government did take some steps to change tax rules for seniors.
Though the idea of removing these taxes sounds appealing, especially for those dependent on a fixed monthly income—there’s more to it than meets the eye. So, what does this plan actually offer? And who truly benefits from it?
What Trump’s Tax Bill Actually Offers
Under the Trump administration, a bill was passed by a Republican-led Congress that brought a few tax benefits for seniors. But here’s the reality: the bill did not completely eliminate Social Security taxes.
Instead, from 2026 to 2028, the bill allows a temporary tax deduction of $6,000 for people aged 65 and above. However, this deduction depends on income limits, so not every senior citizen qualifies. This bill includes parts of Trump’s broader tax proposals—like the Senior Citizens Tax Elimination Act—but it still requires retirees with higher incomes to pay tax on up to 85% of their Social Security benefits. So, the plan does not bring full tax relief to everyone.
What’s more surprising is that while it’s supposed to help low-income retirees, the real beneficiaries are the wealthy. Experts believe that removing Social Security taxes could cost the government around $1.6 trillion over 10 years. This kind of loss in revenue might put the future of programs like Social Security and Medicare at risk.
Who Really Benefits From Tax Elimination?
If Social Security taxes were fully removed as Trump once suggested (note: this has not happened yet), households earning between $32,000 and $60,000 would only get an average tax cut of about $90 per year.
Here’s a rough breakdown:
- Only 1% of lower-income households (earning ₹27 lakh or less yearly) would see any savings.
- About 28% of middle-class households would benefit.
- Nearly 20% of households earning over $5 million a year would enjoy significant tax breaks.
In fact, according to the Tax Policy Center, the wealthiest 0.1% (earning around ₹41 crore or more yearly) would get an average tax benefit of $2,500 in 2025 alone. Clearly, the richest would gain the most.
How Are Social Security Benefits Currently Taxed?
As of 2025, around 68 million Americans receive Social Security payments. The average monthly benefit is around $1,999, and many seniors don’t owe any tax on it.
According to the Social Security Administration (SSA), about 40% of Social Security recipients pay some federal tax on their benefits. The IRS also taxes disability and survivor benefits, though Supplemental Security Income (SSI) is not taxed. Your combined income—which includes your Social Security income plus any other earnings—determines how much tax you owe.
For single filers:
- Earning $25,000 to $34,000: taxed on up to 50% of benefits.
- Earning above $34,000: taxed on up to 85% of benefits.
For couples filing jointly:
- Earning $32,000 to $44,000: taxed on up to 50%.
- Earning above $44,000: taxed on up to 85%.
Some US states also tax Social Security income, but the President doesn’t have the authority to change that.
Does It Really Help?
In summary, most retirees wouldn’t benefit much if Social Security taxes were removed. For 60% of people, their income is already low enough that they don’t pay any tax on Social Security benefits. So even if Trump’s full plan were passed, they wouldn’t save a rupee more. On the other hand, the wealthy would enjoy bigger tax cuts, raising concerns about fairness. A $90 annual tax break for the middle class won’t make a major difference in anyone’s life, especially when the total revenue loss could hit $1.6 trillion in just 10 years.
In the long run, such a move might harm programs like Social Security and Medicare, leading to lower benefits for millions. So, while the promise may sound good on paper, the real impact could hurt more than help.
