"At the heart of this legislation is the "senior deduction," a provision created to provide financial breathing room for those living on fixed incomes. For the state's aging population, the policy could deliver meaningful tax benefits during a time when many are hoping to age in place in their homes, but need the extra money in order to do so."
"Starting in 2025, the law established a specific Senior Deduction-$6,000 for individuals and $12,000 for married couples-which effectively offsets the taxable portions of Social Security benefits for the vast majority of recipients. According to the White House, the bill passed raises the share of retirees who won't pay federal income tax on their Social Security from 64% to 88%-an increase of 14.2 million people across the U.S."
"In addition to tax changes, Granite Staters should be aware of the 2026 Cost-of-Living Adjustment (COLA). A 2.8 percent increase will benefit 75 million Americans receiving Social Security and SSI. Social Security increases are set to begin in January 2026, while SSI increases actually begin on December 31, 2025. The updated tax code also features new thresholds for those who continue to work."
The One, Big Beautiful Bill introduces a Senior Deduction starting in 2025 that provides $6,000 for individuals and $12,000 for married couples. The deduction largely offsets taxable portions of Social Security for most recipients and raises the share of retirees exempt from federal income tax on Social Security from 64% to 88%, affecting roughly 14.2 million additional people nationwide. A 2.8 percent COLA in 2026 will increase benefits for about 75 million Social Security and SSI recipients, with SSI changes effective December 31, 2025. The taxable maximum earnings rose to $184,500 and earnings limits for working seniors were updated.
Read at SFGATE
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