The Social Security Administration (SSA) and President Donald Trump claimed Thursday the president’s domestic policy bill will “eliminate” taxes on Social Security, but that’s not quite accurate: while the bill does give a new tax break for seniors, it’s purposely not tied to their benefits—though the legislation still could speed up Social Security’s insolvency.
Trump is expected to sign the spending bill into law at 5 p.m. EDT Friday, after the House approved the final version of the bill on Thursday.
The tax credit in Trump’s policy bill applies specifically to taxpayers who turned 65 during that tax year or are older, and who have a Social Security number. Those taxpayers are given a $6,000 tax credit per year through 2028 if they make $75,000 or less after other tax deductions, or $150,000 in the case of married couples filing jointly. For those earning more than $75,000 annually, the $6,000 tax credit goes down by 6% of whatever the taxpayer earns above $75,000, or $150,000 filing jointly. That means if someone earns $100,000 after other deductions, for instance, they would subtract 6% of $25,000 ($1,500) from their $6,000 tax credit. That math means no one who earns more than $175,000 annually, or $250,000 filing jointly, will receive the deduction.
Trump has promised to eliminate taxes on Social Security benefits since before the election, but in order to do so he would have to get 60 votes in the Senate, which is unlikely given Republicans’ narrow majority. Trump...
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