One of the biggest promises made during the rollout of the One Big Beautiful Bill Act (OBBBA), signed by former President Donald Trump, was the full removal of taxes on Social Security benefits. While this made headlines and sparked hope among millions of retirees, the actual law tells a different story.
What Was Promised Under OBBBA?
When the bill was passed, many believed that Social Security income would no longer be taxed at all. The Social Security Administration (SSA) even said that the OBBBA “eliminates federal income taxes on Social Security benefits for most beneficiaries.”
The White House Council of Economic Advisers also shared a similar statement. In a June 2025 report, they said that 51.4 million people—or about 88% of Social Security beneficiaries—would stop paying taxes on their benefits.
But recent analysis reveals this claim isn’t fully accurate.
What OBBBA Actually Does
The OBBBA does not completely eliminate taxes on Social Security. Instead, it introduces a new tax deduction for seniors over 65. This deduction reduces taxable income and can lower or remove tax bills for many retirees—but not everyone qualifies.
Here’s what the deduction offers:
Rs. 6,000 (about $6,000) extra deduction for individuals
Rs. 12,000 (about $12,000) extra deduction for couples
This benefit reduces how much of your Social Security is taxed, but it does not automatically mean your Social Security income is tax-free.
Who Gets the Full Benefit?
The new tax break mainly helps low- to middle-income retirees. But there are income limits. If you earn more than:
Rs. 62.5 lakh ($75,000) as a single filer
Rs. 1.25 crore ($150,000) as a couple filing jointly
—you will see the deduction slowly reduced (phased out). If you earn above Rs. 1.45 crore ($175,000) single or Rs. 2.08 crore ($250,000) joint, you won’t receive the deduction at all.
Why It’s Not a Full Tax Removal
Although the OBBBA helps many people pay less tax, it does not change the actual rules for how Social Security is taxed. The same thresholds and tax rates still apply. What changed is that more retirees now qualify for a deduction, lowering their tax bill—but only if their income falls below certain limits.
Temporary Relief, Not Permanent
This benefit is also not permanent. The extra tax deduction introduced by OBBBA will remain in effect from 2025 to 2028. After that, it expires unless extended by a future Congress.
While the Big Beautiful Bill Act brings tax relief for millions, it does not eliminate Social Security taxes completely. It provides a temporary deduction that helps reduce taxes for many lower-income retirees. However, higher earners won’t benefit, and the tax rules themselves remain unchanged. Understanding the truth behind the headlines helps beneficiaries plan better and avoid surprises at tax time.
