The One Big Beautiful Bill Act introduces a $6,000 deduction for seniors over 65, benefiting Idaho's retirees. This policy shields Social Security income from federal taxes for many recipients. The deduction, starting in the 2025 tax year, combines with existing senior deductions to provide significant financial relief. The change aims to alleviate financial pressure on older Idahoans facing rising costs. Additionally, it raises the SALT deduction cap from $10,000 to $40,000, offering potential benefits for itemizing homeowners. The administration claims 88% of seniors will not owe federal taxes on their benefits under this new law.
The change-being dubbed as the 'Senior Deduction'-adds a new $6,000 deduction for those over 65 ($12,000 for qualifying couples), effectively shielding Social Security benefits from federal taxes for the vast majority of recipients.
According to the administration, 88% of seniors receiving Social Security will no longer owe federal income tax on those benefits-up from 64% under the previous law.
'This amounts to the largest tax break in history for America's seniors,' the Council of Economic Advisers stated in a release, emphasizing the bill's intention to allow older Americans to 'save more of their money' after a lifetime of contributing to the system.
The law also boosts the state and local tax (SALT) deduction cap from $10,000 to $40,000, a potential extra benefit for homeowners who itemize.
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