Trump’s New Senior Deduction: One Big Beautiful Bill’s Impact on Seniors

The One Big Beautiful Bill, or OBBB, introduced a new “senior deduction” for taxpayers who are at least 65 years old. The new deduction has repeatedly been referred to as a “bonus”—causing widespread confusion among older taxpayers, many of whom believe that they will receive a $6,000 bonus check that’s similar to the economic stimulus payments made at the height of the COVID-19 pandemic. Other clients may mistakenly believe that their Social Security benefits will no longer be subject to tax—partially because of a confusing email sent by the Social Security Administration to beneficiaries after the OBBB was signed into law. Clients are bound to have any number of questions over the impact of this new deduction, making it particularly important to understand both how the deduction functions and the system governing federal income taxation of Social Security benefits generally.

New Senior Deduction: Basic Mechanics

The new senior deduction provides a $6,000 deduction for taxpayers who have reached age 65 by the end of the tax year. The mechanics are relatively simple. The senior deduction is an above-the-line deduction, so it’s available regardless of whether the taxpayer itemizes or elects to take the standard deduction.