A new bill introduced by Representatives Daniel Webster (R-FL) and Thomas Massie (R-KY) aims to eliminate the so-called “double tax” on Social Security recipients.
The Senior Citizens Tax Elimination Act (H.R. 1040) proposes removing federal taxation on Social Security benefits, which proponents argue is an unfair burden on retirees who already paid into the system throughout their working lives.
Why This Bill Matters for Retirees
For millions of retirees, Social Security benefits serve as a primary source of income. The Social Security Administration (SSA) estimates that the average monthly benefit for January 2025 will be $1,976.
With taxes eating into these payments, seniors on fixed incomes face additional financial strain. Proponents of the bill argue that removing this taxation will boost retirement income and provide much-needed financial relief.
The proposed legislation would amend the Internal Revenue Code of 1986 to exclude tier I railroad retirement and Social Security benefits from an individual’s taxable income.
If passed, retirees would no longer need to report these benefits as taxable income, effectively increasing their take-home Social Security payments.
When Social Security was first introduced in 1935, it was intended to be a tax-free benefit. However, legislative changes in the 1980s and 1990s imposed taxes on up to 85 percent of benefits for higher-income retirees.
This shift has caused frustration among many who feel they are being unfairly taxed twice on their earnings.
While the bill offers financial relief to retirees, it raises concerns about the future of Social Security funding.
According to estimates from the Congressional Budget Office, nearly 50 percent of Social Security beneficiaries were required to pay income taxes on their benefits in 2021.
Critics argue that if fewer people contribute taxes on benefits, the already strained Social Security system could face even greater financial challenges.
Currently Social Security Trust Fund is facing insolvency over the next decade as per the latest Trustees Report.
The introduction of this bill coincides with other legislative efforts to remove Social Security taxation.
On February 4, 2025, Senators Marshall and Blackburn reintroduced the Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simple Taxes (RETIREES FIRST) Act.
The bill seeks to reduce the tax burden on Social Security benefits for seniors. This follows its initial introduction on December 19, 2024.
Proposed legislation aims to increase the provisional income thresholds that trigger taxes on Social Security benefits.
The new thresholds would be raised to $34,000 for individuals and $68,000 for couples filing jointly, significantly higher than the current levels of $25,000 and $32,000, respectively.
Historically, these changes could have a major impact.
In 1984, fewer than 10 percent of Social Security beneficiaries paid taxes on their benefits. Today, that number has climbed to nearly 56 percent.
To ensure that these adjustments remain effective over time, the RETIREES FIRST Act incorporates an annual inflation adjustment to these thresholds, preventing future “bracket creep” and helping retirees maintain their financial stability amid rising living costs.
Additionally, the White House has proposed a broad tax relief package, promising the “biggest tax cut in history.”
As part of his campaign promise, President Trump wants to ensure seniors are no longer taxed on their Social Security benefits.
However, concerns remain over how these tax cuts will be offset
Lawmakers and Advocacy Groups Push for Change
Supporters of the Senior Citizens Tax Elimination Act argue that retirees deserve to keep the full benefits they paid into over decades.
“Although seniors have already paid tax on their Social Security contributions via the payroll tax, they are still required to list these benefits as taxable income on their tax returns,” said Rep. Massie. “This is simply a way for Congress to obtain more revenue for the federal government at the expense of seniors who have already paid into Social Security. My bill would exempt Social Security retirement benefits from taxation and boost the retirement income of millions of older Americans.”
Representative Daniel Webster (R-FL), a co-sponsor of the legislation, said, “For decades, seniors have paid into Social Security with their tax dollars. Now, when many seniors are on a fixed income and struggling financially, they are being double-taxed because of income taxes on their Social Security benefits. This is wrong and I’m pleased to once again co-sponsor this legislation to repeal this tax.”
The Road Ahead: Will the Bill Pass
This is the second time the bill has been introduced, having previously stalled in the Subcommittee on Social Security in 2023.
To become law, it must pass through the House, Senate, and ultimately be signed by the president. Given that multiple proposals are circulating to remove Social Security taxation and President Trump has spoken in favor of it, there is growing momentum behind the issue. However, whether lawmakers can agree on the details remains uncertain.
Caution Advised as Prior Attempts Failed
Prior attempts have been made at eliminating taxes on Social Security benefits. The most recent one was the You Earned It, You Keep It Act sponsored by Rep. Angie Craig (D-Minn.) and introduced in Jan 2024.
The bill would have eliminated federal taxes on benefits at all income levels and would have brought in more tax revenue by adjusting the cutoff point when Americans are no longer subject to payroll taxes that go toward Social Security.
Currently, the 6.2% Social Security tax applies to a max of $168,600 of wages. The bill would add Social Security taxes on earnings above $250,000. The initial analysis showed that the bill would help Social Security stay solvent, buying two decades of time for a program heavily relied upon by older adults and people with disabilities, among others.
However, the bill did not gain bipartisan support to move forward.
What This Means for Retirees Now
The push to eliminate Social Security taxation is gaining traction, but questions about funding the program’s long-term stability remain.
Several bills with different approaches to solve the problem have been proposed.
If the bill passes, retirees will benefit from increased take-home pay, but policymakers will need to address the broader financial implications for future generations.
While the bill has strong support, retirees should not expect immediate changes.
Until legislation is passed and implemented, Social Security benefits will continue to be taxed as usual. Those concerned about their retirement income should stay informed on legislative updates and consider consulting financial advisors for tax planning strategies.
John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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