HR 1129119th CongressIn Committee

Tax Relief Unleashed for Seniors by Trump Act

Introduced: Feb 7, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

This bill would substantially raise the amount of Social Security benefits that can be excluded from federal gross income, meaning more of those benefits would escape federal income tax for many seniors. It doubles the existing exclusion thresholds set in Internal Revenue Code §86(c) and adds an automatic inflation indexing mechanism starting after 2026 to keep the exclusions aligned with rising prices. The changes would apply to tax years beginning after December 31, 2025 (with the inflation adjustments taking effect in later years, starting after 2026). The overall effect is to reduce the federal income tax burden on seniors who receive Social Security benefits.

Key Points

1Substantial increase in exclusion thresholds: The four existing dollar amounts in §86(c) that determine when Social Security benefits begin to be taxed are raised from $25,000, $32,000, $34,000, and $44,000 to $50,000, $64,000, $59,000, and $76,000, respectively. This broadens the range of scenarios in which more of Social Security benefits are tax-free.
2Inflation adjustment mechanism added: The bill creates an automatic cost-of-living adjustment (COLA) for the four exclusion amounts starting with tax years beginning after December 31, 2026. The adjustment uses the same method as the COLA for other tax provisions, with rounding to the nearest $100.
3Effective date: The amended exclusions (the higher base amounts) apply to taxable years beginning after December 31, 2025 (i.e., starting in 2026).
4Inflation indexing details: The inflation increases are calculated by multiplying the current amount by the relevant COLA factor and then rounding, ensuring future increases keep pace with price increases.
5Bill title and sponsorship: The bill is titled the “Tax Relief Unleashed for Seniors by Trump Act.” It is introduced in the House by Ms. Malliotakis and referred to the Ways and Means Committee; sponsor information is listed as unknown in the provided text.

Impact Areas

Primary group/area affected: Social Security recipients, particularly seniors, who would see a larger portion of their benefits excluded from federal income tax.Secondary group/area affected: Taxpayers with higher income that would have previously begun having a larger share of their Social Security benefits taxed; more of their benefits could remain tax-free under the new thresholds.Additional impacts: Potential federal revenue loss due to a larger exclusion of Social Security benefits from taxable income; possible changes in tax planning for retirees and older households; future inflation adjustments could gradually increase the amount of benefits shielded from taxation, though exact revenue and behavioral effects would depend on actual income mixes and future economic conditions.

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