The Senate has begun deliberations over President Donald Trump’s massive “Big Beautiful Bill” that narrowly passed the House on May 22.
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The Senate version of the One Big Beautiful Bill Act includes a temporary enhanced deduction for seniors ages 65 and up. The House of Representatives also proposed such a tax break in its text, calling it a “bonus.”
Notably, the Senate is calling for a deduction of up to $6,000 per qualifying individual. The House included a $4,000 deduction.
The senior “bonus” is in lieu of the elimination of taxes on Social Security benefits that President Donald Trump pitched on the campaign trail. The Republicans’ tax bill is being done through reconciliation, a process that generally prohibits changes to Social Security.
The White House has said the proposed deduction is a “historic tax break” for seniors.
How the senior ‘bonus’ deduction would work
The full deduction amount would be available to individuals with up to $75,000 in modified adjusted gross income, and $150,000 if married and filing jointly.
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Notably, the Senate version calls for a faster 6% phase-out rate for incomes above those thresholds, compared to the House version’s 4% phase-out rate, according to Alex Durante, senior economist at the Tax Foundation.
The faster phase-out means the full $6,000 benefit is lost more quickly, said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center. For people who would be eligible for the full proposed senior deduction, the Senate’s $6,000 version is more generous, he said.
“It really depends on where you are on the income distribution,” Gleckman said, with middle-income taxpayers poised to benefit most.
In the House version, the proposed senior deduction would be available to taxpayers whether they take the standard deduction or itemize their tax returns. There are not many taxpayers in the income ranges for the deduction who itemize their returns, Gleckman said.
To qualify for the break, all individual taxpayers and spouses, if filing jointly, would need to have Social Security numbers.
The temporary senior deduction would be in place for tax years 2025 through 2028.
No tax on Social Security vs. senior ‘bonus”
The House of Representatives passed its version of the One Big Beautiful Bill Act on May 22. Both chambers will have to agree on the changes before it is sent to Trump’s to sign.
“I think it’s pretty clear, since this was in both bills, that there’s going to be a version of a senior deduction,” Durante said.
Eliminating taxes on Social Security benefits would have been a more expensive provision, he said.
Tax-free Social Security benefits would have benefited higher-income people most, according to Gleckman.
Currently, Social Security benefits are taxed based on a formula known as combined income — the sum of adjusted gross income, nontaxable interest and half of Social Security benefits.
Up to 85% of Social Security benefits are taxed for single taxpayers with combined income above $34,000 and joint filers with more than $44,000. Meanwhile, up to 50% of benefits are taxed for individuals with $25,000 to $34,000 in combined income and for couples with between $32,000 and $44,000.
In contrast, the proposed senior “bonus” would not benefit high-income taxpayers and instead focuses on middle-income taxpayers with incomes less than $75,000 if single or $150,000 if married.
“It’s better because it helps the people who need the help more,” Gleckman said.