Overview
- Eligible seniors can claim up to $6,000 each on 2025 returns, with typical after-tax savings estimated around $670.
- The deduction is scheduled to remain in place through the 2028 tax year before its planned expiration.
- If the provision lapses for 2029, some seniors could face higher tax bills compared with the prior year.
- Lower benefit taxation could reduce revenue flowing to Social Security, which analysts say might hasten trust fund depletion.
- The CBO projects exhaustion of Social Security trust funds around 2032, and potential policy responses discussed include higher payroll or benefit tax rates, while advisers urge retirees to review withdrawal strategies.