The new senior tax deduction, introduced in the One Big Beautiful Bill, is set to majorly reduce federal taxes on Social Security income for retirees in Tennessee and nationwide. An estimated 1.2 million retirees in Tennessee and 14.2 million across the U.S. may see no federal tax owed on Social Security income under this change. The new deduction offers $6,000 for individuals and $12,000 for couples over 65, in addition to existing deductions, allowing for potential total deductions of up to $23,750 for individuals and $46,700 for couples.
Thanks to the One Big Beautiful Bill recently passed by the Trump administration, a new senior tax deduction will eliminate federal taxes on Social Security income for most recipients.
A White House analysis shows that under the new law, 88% of seniors who receive Social Security will owe nothing in federal income taxes on those benefits, up from 64% under previous law.
The benefit comes from a new deduction designed specifically for seniors: $6,000 for individuals and $12,000 for couples over 65. These amounts are layered on top of the standard and senior deductions already in place.
Tennessee is home to 1.24 million residents aged 65 and over-roughly 17.4% of the state's total population. The U.S. Census Bureau ranks Tennessee as one of the fastest-aging states in the South.
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