A new Trump-backed bill offers a $4,000 tax deduction for millions of seniors earning under $75K, easing Social Security burdens.

GOP Tax Plan Targets Senior Relief

President Donald Trump’s latest budget proposal includes a $4,000 tax deduction aimed at easing the financial burden on seniors, according to House Ways and Means Committee Chairman Jason Smith. The deduction is part of a broader legislative package Republicans are advancing via budget reconciliation, bypassing traditional Senate hurdles to enact sweeping tax reforms.

“This is on top of their guaranteed deduction, and that’s per person,” Smith said, highlighting the measure’s intent to ensure that low- and middle-income seniors on Social Security would owe nothing in federal taxes. “Anyone earning $75,000 or less annually will be made completely whole.”

The proposal benefits individuals aged 65 or older, with full eligibility granted to single filers making less than $75,000 and joint filers earning less than $150,000. Above those thresholds, the deduction gradually phases out. Rather than appearing as monthly relief, the deduction would be reflected in taxpayers’ annual returns.

While the Congressional Budget Act of 1974 prevents direct changes to Social Security through reconciliation, Smith explained that the deduction circumvents this rule by delivering equivalent tax relief through an added income deduction.

“You cannot touch Social Security directly under reconciliation rules,” Smith stated. “So, what we did is ensure seniors still receive meaningful tax relief without violating Senate requirements.”

Broader Impact and White House Support

The $4,000 deduction builds on the standard deduction already available to seniors and is not a credit but a reduction in taxable income. For many eligible seniors, it could result in little or no federal tax liability—effectively offsetting Social Security tax obligations.

The bill is part of a broader effort to permanently extend Trump’s 2017 Tax Cuts and Jobs Act (TCJA) while introducing new measures such as eliminating taxes on tips, overtime, and Social Security income for retirees. Republicans argue these changes will boost disposable income and promote economic security for working families and retirees alike.

The White House endorsed the approach, with spokesperson Anna Kelly calling it “another promise made, promise kept.” She added, “The one, big, beautiful bill not only delivers permanent tax cuts and bigger paychecks, but it secures a historic tax break for seniors on Social Security.”

Though the bill departs from Trump’s initial campaign rhetoric promising to eliminate Social Security taxes directly, GOP leaders contend the workaround still delivers on the spirit of that pledge.

Smith emphasized the urgency of the effort: “Failure’s not an option. We’re going to get this done.” The proposed deduction would apply from the 2025 through 2028 tax years, potentially benefiting millions of seniors across the country.