S 1109119th CongressIn Committee

Social Security Check Tax Cut Act

Introduced: Mar 25, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Social Security Check Tax Cut Act would temporarily lower how much Social Security benefits must be reported as taxable income for federal income tax purposes. For tax years 2026 and 2027, the portion of benefits from old-age and survivors insurance (OASI) and from tier 1 railroad retirement benefits that is included in gross income would be reduced by 10% in 2026 and 20% in 2027 (calculated separately from other Social Security benefits). This applies to benefits described in the retirement/disability category, with a separate handling for other SSA benefits. The revenue loss from this tax cut would be offset by transfers from the general fund to the Social Security and Medicare trust funds, structured to mirror the transfers that would have occurred if the bill had not been enacted. The measure is effective for taxable years beginning after December 31, 2025 and before January 1, 2028. The bill was introduced in the Senate by Mr. Ricketts and referred to the Committee on Finance. In short: it is a two-year, targeted tax cut aimed at reducing the tax burden on Social Security benefit recipients by reducing the amount of benefits treated as taxable income, with funding ensured through general-fund transfers to related trust funds.

Key Points

1Temporary reduction of taxable inclusion: For OASI and tier 1 railroad retirement benefits, the amount included in gross income for tax purposes is reduced by 10% (2026) and 20% (2027), relative to the standard calculation under current law.
2Separate treatment for benefit types: The reduction applies to benefits described in the retirement/disability category (OASI and tier 1 railroad). Benefits under section 223 are treated separately and are not subject to the same 10%/20% reductions.
3Funding mechanism: The reduction in revenue is offset by appropriations from the general fund to the Federal Old-Age and Survivors Trust Fund, the Federal Disability Insurance Trust Fund, and the Medicare Hospital Insurance Trust Fund, with transfers designed to replicate what would have occurred if the amendment hadn’t been enacted.
4Time limits: The amendment applies only to taxable years beginning after December 31, 2025 and before January 1, 2028 (i.e., 2026 and 2027 tax years).
5Status and process: Introduced in the Senate as S. 1109 by Mr. Ricketts; referred to the Committee on Finance.

Impact Areas

Primary group/area affected- Recipients of old-age and survivors insurance benefits and tier 1 railroad retirement benefits who itemize or otherwise have Social Security benefits included in gross income for tax purposes. They could owe less federal income tax on those benefits in 2026 and 2027 due to the lower taxable inclusion.Secondary group/area affected- Recipients whose Social Security benefits (retirement/disability) would otherwise be taxed under current law in 2026–2027; the legislation provides a temporary relief specifically for the OASI and tier 1 railroad benefits portion of those taxes.Additional impacts- Budget/Trust funds: Requires additional general-fund transfers to the Social Security and Medicare trust funds to offset the revenue loss, maintaining trust-fund financing for the period the bill is in effect.- Policy scope: The bill creates a narrow, temporary tax-practice change rather than restructuring benefit amounts or the overall Social Security program. It does not change the benefit checks themselves, only how much of those checks are treated as taxable income for federal tax purposes.This is a short-term measure targeting the tax treatment of Social Security benefits, not an across-the-board reduction in benefits.The proposal would affect the amount of income subject to federal income tax, which could lower tax payments for beneficiaries in 2026 and 2027, depending on individual circumstances (filing status, other income, etc.).

Generated by gpt-5-nano on Nov 18, 2025