As the IRS opens the 2026 filing season on Jan. 26, a new Trump-signed tax break is taking effect for millions of seniors, adding a temporary $6,000 deduction for taxpayers age 65 and older and putting fresh attention on retirement costs and ongoing fights over taxing Social Security benefits.
The new deduction is part of the One Big Beautiful Bill Act, which the IRS says allows taxpayers age 65 and older to claim an additional $6,000 deduction for tax years 2025 through 2028, in addition to existing rules for older filers.
The deduction is available whether a taxpayer itemizes or takes the standard deduction, according to IRS guidance.
The benefit phases out for higher earners.
Under the law, the full deduction applies to taxpayers with modified adjusted gross income up to $75,000, and up to $150,000 for joint filers. The IRS says the deduction phases out once income rises above those thresholds.
AARP officials highlighted the change during a Thursday press call, framing it as pocketbook relief for seniors facing elevated costs.
Bill Sweeney, AARP's senior vice president for government affairs, called the new deduction "critical support at a time when people need it the most."
"Costs for a lot of folks are very high, and for older Americans especially, costs for things like prescription drugs, for some of the health challenges that folks have, those can be very high, and so putting a little bit of money, extra, in people's pockets can be very helpful," Sweeney said Thursday.
How much a senior saves depends on tax bracket.
A White House Council of Economic Advisers analysis estimated that the deduction would yield an average $670 increase in after-tax income for seniors who benefit from it and said the provision would benefit 33.9 million seniors.
Other reporting, citing AARP, noted some seniors in the 22% bracket could save substantially more, depending on income and filing status.
The new deduction is arriving alongside continued confusion over Social Security taxes.
The law did not eliminate federal income taxes on Social Security benefits, a point that has drawn scrutiny in prior coverage of administration messaging about the bill, according to The Associated Press.
AARP also pointed to state-level Social Security taxes, which still exist in a limited number of states.
Recent summaries list eight states that tax Social Security benefits to varying degrees: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, and Vermont.
"Right now, we're working in states across the country to eliminate state taxes on Social Security," John Hishta, AARP's senior vice president of campaigns, said. "It's a lifeline for millions of Americans, and was never meant to be taxed twice."
The group also reiterated support for the bipartisan Credit for Caring Act, which would create a federal tax credit of up to $5,000 for eligible working family caregivers.
The bill was reintroduced in March 2025 by Sen. Shelley Moore Capito, R-W.Va., Sen. Michael Bennet, D-Colo., and Rep. Mike Carey, R-Ohio, with a companion House measure.
As of Jan. 16, the Act has not advanced beyond its initial committee referrals in either chamber.
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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