The federal budget passed by Republicans has inspired broad claims by its supporters about strong benefits – but cursory examination of the issues reveals their claims related to Social Security benefits are not accurate.
Shortly after the federal budget passed in early July, President Donald Trump’s White House claimed the bill meant no tax on Social Security for seniors, a claim it has repeated on its website, through emails and on social media. Even the Social Security Administration itself alleged the budget eliminated taxes on Social Security for 90% of recipients.
However, USA Today reported that a great number of the assertions by the federal government have drastically overstated the bill’s impacts on Social Security benefits. For one, claims of no taxes on Social Security are simply not true. It would be impossible to do so without falling afoul of longstanding federal law. About 85% of Social Security benefits will still be taxable.
Additionally, much of the tax cuts claimed by Republicans simply don’t exist, as single filers making less than $25,000 and joint filers earning under $32,000 are already exempt from taxes. Only 13.2% of the second quintile of earners will be able to access the new deduction, while 30% of middle-earners and 36% of top earners will not be able to access it.
The Tax Policy Center explained that, although the budget adds an extra standard deduction, it expires in 2028 and is not accessible for Social Security recipients under the age of 65, such as individuals with disabilities or those who claim benefits early. There is no benefit for individuals earning under the standard deduction; and higher-income seniors will likely earn too much, as extra deductions phase out entirely once income climbs over $175,000 for individual filers and $250,000 for joint filers.
To put it simply – about half of all recipients will pay income taxes on their benefits next year, which will likely spur frustration when reality yet again runs into the Trump Administration’s claims.
