New laws enacted in 2025 may have a big impact on how much Social Security beneficiaries pay in taxes this season.
On Jan. 5, 2025, President Joe Biden signed the Social Security Fairness Act, a law that ended provisions that reduced or eliminated Social Security benefits for more than 2.8 million individuals who have pension income from work that did not require payment of Social Security payroll taxes.
Later that year, on July 4, President Donald Trump signed the “big beautiful” tax package, which includes a new tax deduction of up to $6,000 per eligible senior to help offset taxes on Social Security benefits. Up to 85% of Social Security benefits may still be subject to federal tax, depending on the beneficiary’s income.
Together, those changes will influence the tax liabilities that Fairness Act beneficiaries face this tax season.
“If you’re getting higher benefits because of the Social Security Fairness Act, some percentage of those are going to be taxable,” said Alex Durante, senior economist at the Tax Foundation.
