By David Lightman
Merced Sun-Star (Merced, Calif.)
(TNS)
May 14 — President Donald Trump’s proposal to end taxation of Social Security benefits is not in the big Republican tax bill.
Instead, the GOP this week is crafting legislation that would provide an additional $4,000 federal income tax deduction for lower- and middle-income seniors 65 and over.
Rep. Jason Smith, R- Mo., chairman of the tax-writing House Ways and Means Committee, argued that the break would help those who needed it most.
“Seniors, like my aunt who had to take a job as a door greeter at Walmart to supplement her Social Security income after the loss of her husband, will receive much needed tax relief,” he said.
But while seniors’ activist groups liked the new break, they had concerns about other, related issues.
Social Security benefits “were never meant to be taxed, and even with this new deduction, many seniors will still bear a heavy tax burden that can further deplete their already limited retirement income,” said Shannon Benton, executive director of the Senior Citizens League.
At the National Committee to Preserve Social Security and Medicare, Maria Freese took a broader look.
While the group backs the enhanced deduction, it “doesn’t counter the harm to seniors’ programs that will result from the rest of the bill,” said Freese, committee senior legislative representative.
The Republican-dominated Ways and Means Committee is writing a massive tax bill this week that extends the 2017 federal income tax rates and continues a series of business and individual tax breaks.
Republican initiatives, Freese said, “will dramatically increase the deficit, and slash programs important to seniors, all to pay for a massive tax cut that primarily goes to the wealthy.”
A tax break for seniors
Trump has said for months that he wanted to end the federal income tax on Social Security benefits. About 6.3 million Californians receive Social Security benefits.
If someone’s income is more than $34,000 or a joint return’s income is more than $44,000 under a federal formula for such calculations, as much as 85% of the Social Security benefits can currently be subject to taxation.
House tax-writers explained that they didn’t include the provision in the new bill because it would have a rough time passing a Senate procedural test governing what can be included in such legislation.
There were also concerns that the chief beneficiaries of the Social Security income tax exemption are wealthier taxpayers. Only about half of Social Security recipients pay no income tax on their benefits because their taxable incomes are too low.
But under the House plan, lower income people would benefit. Those 65 and older could deduct $4,000 “per eligible filer,” roughly twice as much as the current additional deduction in most cases.
The proposed increase applies to those with modified adjusted gross income of $75,000 or less for an individual filer or $150,000 for married people filing jointly.
Photo caption: In this photo from March 29, 2022, U.S. Rep. Jason Smith, R-Mo., questions Office of Management and Budget Director Shalanda Young during a House Committee on the Budget hearing in Washington, D.C. (Rod Lamkey-Pool/Getty Images/TNS)
_______
© 2025 the Merced Sun-Star (Merced, Calif.). Visit www.mercedsunstar.com. Distributed by Tribune Content Agency LLC.
Thanks for reading CPA Practice Advisor!
Subscribe Already registered? Log In
Need more information? Read the FAQs
Rose Marie Bufkin May 19 2025 at 5:57 pm
After reading all of that info if I understood it correctly I will never vote for a republican ever again!