A new bill could stop federal taxes on Social Security income. This would be a big help for millions of retirees in the United States. Many seniors rely on Social Security for most of their money, so any tax relief matters a lot.
Senator Ruben Gallego, a Democrat from Arizona, introduced this bill last week. If it becomes law, it would permanently end federal taxes on Social Security benefits. The bill is called the You Earn It, You Keep It Act. Earlier in April, a similar version was introduced in the House by Representative Angie Craig, a Democrat from Minnesota.
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Why It Matters
Right now, the federal government can tax up to 85 percent of Social Security benefits. How much you pay depends on your total income.
During his 2024 presidential campaign, President Trump promised to stop taxes on Social Security payments. But after taking office, he passed the One Big Beautiful Bill Act, which gives seniors a bigger tax deduction but does not fully remove taxes on their benefits.
For many seniors, paying taxes on Social Security feels unfair. They worked for decades, yet the government can still take a chunk of their benefits. This new bill aims to fix that.
What The Bill Proposes
If Gallego’s bill passes, Social Security benefits will no longer be taxed at the federal level.
To balance the cost, the bill would raise payroll taxes for earnings above $250,000. Currently, wages up to $176,100 in 2025 are subject to Social Security payroll taxes.
Gallego said, “Like a lot of Americans, I’ve been paying into Social Security since my first job at fourteen. But despite decades of paying into the system, seniors still pay taxes on their hard-earned benefits—while the ultra-wealthy barely pay in at all. Trump claimed he ended taxes on Social Security. My bill actually does it. Permanently.”
How Current Tax Breaks Work
President Trump approved a temporary senior tax deduction. This raises the standard deduction for seniors aged 65 and older by up to $6,000 between 2025 and 2028. This deduction does not fully remove taxes on Social Security benefits. But it helps seniors keep more of their money.
The deduction starts to reduce for individuals earning more than $75,000 and married couples earning over $150,000. According to the White House, about 51.4 million seniors—roughly 88 percent of Social Security recipients—will see some tax relief from this deduction.
What People Are Saying
Senator Ruben Gallego posted on X: “Seniors earned their Social Security — my new bill ACTUALLY ends the unfair tax while Trump sold them out to billionaires.”
Shannon Benton, executive director of The Senior Citizens League, said: “This legislation gives long-overdue tax relief for seniors who have worked hard all their lives. Eliminating federal taxes on Social Security benefits helps older Americans keep more of what they’ve earned. We strongly support this bill and thank Senator Gallego and Representative Craig for their leadership.”
The White House said about the One Big Beautiful Bill Act: “This is the largest tax break in history for America’s seniors. After years of earning their Social Security, seniors can save more of their money.”
How The Bill Differs From Current Rules
| Feature | Current Rules | Proposed Bill |
|---|---|---|
| Social Security Taxes | Up to 85% taxed based on income | 0% federal taxes on benefits |
| Payroll Tax Limit | Wages up to $176,100 | Payroll tax applies above $250,000 |
| Senior Deduction | Temporary deduction up to $6,000 | Not needed; taxes eliminated |
| Impact on Seniors | Only partially helps seniors | Helps all seniors fully keep benefits |
This table makes it easy to see the big difference. The bill would make Social Security much fairer for everyone who worked and paid into it.
What Happens Next
Gallego’s bill is now in the Senate. Craig’s version in the House is being reviewed by the Committee on Ways and Means and the Committee on Energy and Commerce. If both pass, and the President signs it, seniors could finally see permanent tax relief on Social Security benefits.
FAQs
What is the You Earn It, You Keep It Act?
It is a bill that ends federal taxes on Social Security benefits permanently.
Who introduced the bill?
Senator Ruben Gallego introduced it in the Senate, and Representative Angie Craig introduced it in the House.
Will all seniors benefit?
Most seniors will benefit, but very high earners may still pay some taxes.
How does the bill pay for lost revenue?
It raises payroll taxes on earnings above $250,000.
When will the bill take effect?
It must pass both the Senate and House, then be signed by the President.
