A new bill has been introduced that would eliminate federal taxes on Social Security income.
Democratic Senator Ruben Gallego of Arizona introduced legislation last week that would permanently end federal taxes on Social Security benefits.
The proposal, called the You Earn It, You Keep It Act, mirrors a House version introduced in April by Representative Angie Craig, a Minnesota Democrat.
Why It Matters
As it stands, up to 85 percent of Social Security benefits can be taxed by the federal government, with how much depending on your overall income.
President Donald Trump pledged to end taxes on Social Security payments during his 2024 presidential run. Since taking office, he has instead expanded a tax deduction for senior citizens as part of his One Big Beautiful Bill Act, which became law in early July.
What To Know
Under Gallego’s plan, Social Security benefits would no longer be subject to federal taxation. To offset the cost, the bill would expand payroll taxes to apply to annual earnings above $250,000. Currently, wages up to $176,100 in 2025 are subject to Social Security payroll taxes.
“Like a lot of Americans, I’ve been paying into Social Security since my first job at fourteen. But despite decades of paying into the system, seniors are still forced to pay taxes on their hard-earned benefits – all while the ultra-wealthy barely pay into the system at all,” Gallego said in a press release. “Trump claimed he ended taxes on Social Security. My bill actually does it. Permanently.”
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The proposal comes after a separate, temporary senior tax deduction approved by President Trump. That raises the standard deduction for seniors aged 65 and older by up to $6,000 between 2025 and 2028.
While the deduction does not directly eliminate taxes on benefits, it could shield more income from federal taxes for retirees. The tax break phases out for individuals with earnings exceeding $75,000 and for married couples with earnings above $150,000.
According to the White House, the deduction is expected to exempt approximately 51.4 million seniors—roughly 88 percent of Social Security recipients—from paying federal taxes on their benefits.
What People Are Saying
Senator Ruben Gallego, on X: “Seniors earned their Social Security — my new bill ACTUALLY ends the unfair tax while Trump sold them out to billionaires.”
Shannon Benton, executive director at The Senior Citizens League, in a press release: “The Senior Citizens League (TSCL) is pleased to see Senator Gallego introducing the Senate version of the You Earned It, You Keep It Act. This legislation provides long-overdue tax relief for seniors who have worked hard and paid into Social Security their entire lives. Eliminating federal taxes on Social Security benefits is a commonsense step to ensure older Americans can keep more of what they’ve earned. We strongly support this bill and commend Senator Gallego and Representative Craig for their leadership.”
The White House on the passage of the One Big Beautiful Bill Act in July: “This amounts to the largest tax break in history for America’s seniors — and makes sure that after years of earning their Social Security, seniors can save more of their money. Promises made, promises kept.”
What Happens Next
Gallego’s bill has been introduced in the Senate. In the House, Craig’s bill has been referred to the Committee on Ways and Means and to the Committee on Energy and Commerce.
