Bonus Tax Relief for America’s Seniors Act
The Bonus Tax Relief for America’s Seniors Act would dramatically expand the “additional standard deduction” available to seniors. Specifically, it would raise the senior-only deduction from $600 to $5,000 and then index this amount for inflation starting in tax years after 2025. The inflation adjustment uses the federal cost-of-living adjustment method and includes a rounding rule to the nearest $50. The bill also includes conforming amendments to ensure consistent treatment with related provisions (notably those addressing deductions for the blind) and clarifies the effective date as applying to taxable years beginning after December 31, 2025. In short, the bill aims to deliver substantially larger tax relief for seniors who choose the standard deduction rather than itemizing.
Key Points
- 1Increases the additional standard deduction for seniors from $600 to $5,000.
- 2Establishes annual inflation adjustment for the $5,000 base after 2026 using the standard COLA formula, with rounding down to the nearest $50.
- 3Adds conforming amendments to align related provisions (63(c)(4) and 63(f)(3)) with the new structure and to reflect inflation adjustments for related categories like the blind.
- 4Effective date: applies to taxable years beginning after December 31, 2025 (i.e., beginning in 2026).
- 5Cross-reference: maintains or clarifies how inflation adjustments apply to the additional amounts for blind, ensuring consistency with the seniors’ adjustment.