Every retiree in America deserves to know the truth about what has actually changed — and what hasn’t — in the ongoing fight for No Tax on Social Security. The timeline stretches from a 1983 law that first made benefits taxable, through a major 2025 victory, to a brand-new February 2026 bill racing against the April 15 tax deadline. Here is the full picture, updated with everything happening right now.
If you collect Social Security or plan to soon, these developments directly affect how much you keep every month — read this before you file your 2025 taxes.
How Social Security Became Taxable in the First Place
The taxation of Social Security benefits is a relatively recent phenomenon. It was introduced as part of the 1983 amendments to shore up the Social Security trust fund, which at the time was facing insolvency — a situation that sounds uncomfortably familiar today.
That 1983 law taxed up to 50 percent of benefits for higher earners. Then in 1993, Congress raised the ceiling further, allowing up to 85 percent of Social Security income to be subject to federal taxes. The income thresholds that trigger taxation — $25,000 for single filers and $32,000 for married couples — were never adjusted for inflation. Over the following three decades, as wages and investment income grew, millions more retirees quietly crossed those limits and began paying taxes on benefits they expected to receive tax-free.
By the 2024 presidential election, eliminating that burden had become one of the most popular promises a politician could make.
The 2025 Law: What Actually Passed
During the 2024 election campaign, President Trump promised that he would eliminate all income taxes on Social Security. The One Big Beautiful Bill Act (OBBBA), passed in July 2025, does not include this provision, but provides a new additional standard deduction for seniors that will be temporarily available from this year’s tax season through the end of 2028.
The new deduction will reduce taxable income by up to $6,000 for eligible taxpayers. The provision applies to people who are at least 65 at the end of 2025. Individual filers with a modified adjusted gross income up to $75,000 or married couples filing jointly with a combined MAGI of up to $150,000 can claim the full $6,000. Individuals with incomes of up to $175,000 for single filers or $250,000 for married couples can claim a reduced deduction.
For a married couple where both spouses are 65 or older, that deduction doubles to $12,000 on top of the already-elevated standard deduction seniors receive. This brings the total to $23,750 for singles and up to $46,700 for married couples filing jointly.
The result: nearly 90 percent of Social Security beneficiaries will no longer pay federal income taxes on their benefits, according to the Social Security Administration.
Read also-When Does the No Tax on Social Security Start — What 2026 Means for Retirees
What the Law Does NOT Do — And Why That Matters
Here is where many retirees are being misled. The One Big Beautiful Bill Act did not remove Social Security from the definition of taxable income. At the federal level, up to 85 percent of Social Security benefits can still be taxed depending on your total income. No federal law has been enacted to completely remove taxes on Social Security benefits.
The deduction works by reducing your overall taxable income enough that many seniors no longer owe anything on their Social Security. But if you have a pension, significant IRA withdrawals, investment income, or other earnings alongside your Social Security checks, the math may still leave you with a federal tax bill on your benefits.
The temporary deduction, which runs through the 2028 tax year, will cost Social Security $168.6 billion in lost tax revenue over the next 10 years and hasten the depletion of the program’s trust funds by up to six months. That is a real trade-off that lawmakers and retirees alike will need to reckon with in the years ahead.
February 2026: A New Tax Crisis for Public Sector Retirees
Just as the 2025 tax filing season opened, a new and urgent problem surfaced for a specific group of retirees — teachers, firefighters, police officers, and other public sector workers.
In January 2025, the Social Security Fairness Act became law, repealing two provisions called the Windfall Elimination Provision and the Government Pension Offset. These rules had long reduced or eliminated Social Security benefits for people in government jobs that didn’t pay into the system. The repeal was retroactive to January 2024, which meant the Social Security Administration owed those retirees back payments.
The lump sums were based on payments that should have been made over the course of many years, averaging $6,710, according to the Social Security Administration. Those payments were deposited into recipients’ accounts in early 2025. The problem? Under IRS rules, all income received in a calendar year is taxed in that year — meaning these retirees now owe federal taxes on a large one-time payment they received through no choice of their own.
A new proposal wants to shield beneficiaries from big tax bills triggered by those payments. The No Tax on Restored Benefits Act, introduced in February 2026, would create a one-time carve-out to exclude the lump-sum payments from income tax. The legislation has been taken up by the House Ways and Means Committee; its future and potential timeline of passage is uncertain. With Tax Day on April 15, 2026 approaching fast, the clock is ticking.
The Push for Full Elimination: Bills Still Pending in Congress
Beyond the immediate lump-sum issue, a broader legislative battle is underway in Congress to permanently end all federal taxes on Social Security — the original, complete version of what Trump promised voters.
Democratic Rep. Angie Craig and Democratic Sen. Ruben Gallego have introduced the You Earned It, You Keep It Act in their respective chambers. This legislation would exclude Social Security benefits from federal income tax. The bill would fund the lost revenue by lifting the Social Security payroll tax cap on earnings above $250,000, making higher-income earners contribute more into the system.
So far, neither has been successful. “It’s a big campaign promise, so I think there will be a political push,” one analyst noted. “The expense is probably the biggest stumbling block.”
A separate bill, H.R. 904, introduced in the 119th Congress, would exclude Social Security and Tier I railroad retirement benefits from gross income for purposes of federal income taxes. That bill also remains pending.
If Congress passes the You Earned It, You Keep It Act, federal taxes on Social Security could end entirely beginning with 2026 tax returns, filed in 2027. As of early 2026, the bill is still pending.
The State Tax Picture in 2026
Federal law is only part of the story. Eight states still tax Social Security to some degree — Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont. The remaining 41 states impose no state-level tax on Social Security benefits at all.
For retirees in those eight states, even a full federal exemption would not solve the entire problem. AARP has publicly stated it is actively working to push those states toward full exemption as well.
If you live in one of those eight states and rely heavily on Social Security, consulting a tax professional before filing could reveal strategies to reduce your state burden — things like managing retirement account withdrawals or taking advantage of age-based state exemptions that vary by income level.
What the Full No Tax on Social Security Timeline Looks Like
To put it all together clearly:
1983 — Federal taxes on Social Security introduced for the first time. 1993 — Congress raises taxation ceiling to 85 percent of benefits. 2024 — Trump campaigns on fully eliminating Social Security taxes. July 4, 2025 — One Big Beautiful Bill Act signed; $6,000 senior deduction takes effect for tax years 2025–2028. 2025 tax season (filed in 2026) — Roughly 88–90 percent of recipients effectively pay no federal taxes on Social Security. February 2026 — No Tax on Restored Benefits Act introduced in Congress to address lump-sum back payment tax bills for public sector retirees. Pending — You Earned It, You Keep It Act and H.R. 904 still before Congress; neither has been passed. 2028 — Current senior deduction expires unless Congress acts to extend or replace it.
What Retirees Should Do Right Now
If you are 65 or older and filing your 2025 taxes this season, make sure your tax preparer or tax software is applying the new $6,000 senior bonus deduction. It does not apply automatically for everyone — your income level and filing status determine whether you receive the full amount, a reduced amount, or nothing at all.
If you are a public sector retiree who received a lump-sum back payment in 2025 under the Social Security Fairness Act, keep a close eye on the No Tax on Restored Benefits Act moving through Congress. If it passes before April 15, it could directly reduce what you owe this filing season.
If you are still working and planning for retirement, the current window — 2025 through 2028 — may be the most tax-efficient period to draw down traditional IRA or 401(k) funds alongside Social Security, while the enhanced deduction is in place.
The push toward permanently eliminating Social Security taxes is far from over. Both parties have introduced bills. The political will exists on both sides of the aisle. The question is whether Congress can agree on how to pay for it without accelerating the Social Security trust fund’s path to insolvency — a challenge that has tripped up every previous attempt.
Are you benefiting from the new $6,000 senior deduction this tax season, or are you still getting hit with a bill on your Social Security? Drop your experience in the comments below — your story matters, and staying informed is the best thing you can do for your retirement.