The so-called double tax on Social Security recipients may be eliminated thanks to a bill introduced by Representatives Daniel Webster and Thomas Massie.
The Senior Citizens Tax Elimination Act, or H.R. 1040, would do away with the "unjust double-tax on Social Security benefits," Webster said in a statement.
The Significance of It According to the lawmakers who introduced the idea, seniors who have paid taxes into their Social Security accounts throughout their lives shouldn't have to pay taxes on their benefits after they are received.
The Social Security Administration (SSA) projects that the average monthly Social Security retirement payment for January 2025 will be $1,976. These Social Security benefits are often the main source of income for retirees, so taxes on them may put a strain on their finances.
Things to Be Aware of The Internal Revenue Code of 1986 would be amended by the Senior Citizens Tax Elimination Act to remove Social Security and Tier I railroad retirement payments from being included in an individual's gross income.
According to Webster and Massie, this would increase older people's retirement income by exempting Social Security payouts from taxes.
Social Security benefits can be obtained by Americans as early as age 62 after they have worked and paid Social Security taxes for at least ten years.
According to a 2024 Nationwide Retirement Institute poll, 72% of Americans are concerned that their lifetime Social Security benefits may expire due to the aging of the American population.
There might be even less money available for future generations if fewer people contribute to Social Security, even if it's through their personal benefits.