Social Security Email About 'Big Beautiful Bill' Tax Changes Sparks Confusion
Here’s what’s really happening with taxes on Social Security benefits under Trump’s new tax plan.
If you are one of the more than 60 million people who receive Social Security benefits, you may have received an interesting message last week. That’s because the Social Security Administration (SSA) reportedly sent an email to millions of beneficiaries stating that the newly enacted “One Big Beautiful Bill” (OBBB) would “eliminate federal income taxes on Social Security benefits for most beneficiaries.”
In that communication, a portion of which was also posted to the agency’s blog, SSA Commissioner Frank Bisignano described the change as a “historic step forward for America’s seniors.”
The email went on: “The bill ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits, providing meaningful and immediate relief to seniors who have spent a lifetime contributing to our nation's economy.”
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However, since the actual details of the new GOP mega legislation present a more complex picture, some criticized the correspondence for being inaccurate, political, and confusing.
Here’s what you need to know about the email and what’s really happening with taxes on Social Security benefits in 2025.
July 3 email from Social Security about Trump tax cuts
The SSA’s July 3 email announced that the so-called One Big Beautiful Bill (signed into law by President Donald Trump on July 4) would essentially eliminate federal income taxes on Social Security benefits for most recipients.
Specifically, the letter leaned into the notion that nearly 90% of beneficiaries would no longer pay federal taxes on their benefits, framing the OBBB as a major win for older adults in the United States.
“The new law includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries, providing relief to individuals and couples. Additionally, it provides an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they have earned,” the email reads.
Commissioner Bisignano went on to state in the email: “For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans. By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump’s promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they’ve earned."
So what’s the issue? Some recipients reportedly felt the tone and content of the email suggested a sweeping and permanent change to Social Security taxation.
The SSA’s use of “eliminates federal taxes on Social Security benefits” could create the impression of a permanent and comprehensive SS tax repeal, which the OBBB doesn’t provide. The bill doesn’t amend the tax code to remove taxes on Social Security benefits.
- Rep. Frank Pallone, a Democrat from New Jersey, took to X (formerly Twitter) to denounce the email, calling it “a lie” and expressing that “Trump hijack[ed] a public institution to push blatant misinformation.”
- Jeff Nesbit, who previously served as deputy commissioner at the SSA, also posted on X, stating that he had never seen the agency issue such a “blatant political statement,” and described the move by the Trump administration as “unconscionable.”
Some advocacy groups raised similar alarms. According to USA Today, Alex Lawson, executive director of nonprofit social welfare organization Social Security Works, described the SSA’s email as “entirely unprecedented” and said, “[It] represents a significant breach of trust.”
Also, given the prevalence of Social Security phishing scams that use urgent and official-looking emails to target retirees, the July 3 SSA email may have caught some recipients off guard. (More on that below.)
Fact: The OBBB doesn’t change Social Security taxation directly and makes no changes to the Social Security program. The new law, enacted on July 4, 2025, provides a temporary, income-based bonus over-65 tax deduction rather than a full repeal of Social Security benefit taxes. That deduction boost could, for some, indirectly impact how much Social Security income is subject to tax.
For more information, see Kiplinger's report: No SS Tax Cut in Trump's Big Bill.
*So far, there has also been no public statement from the SSA or the administration directly addressing whether some beneficiaries may have misunderstood the OBBB change, or whether the language used in the email could have led to such a misinterpretation.
Tax changes behind the Social Security Administration email
As Kiplinger has reported, the OBBB does introduce a temporary bonus tax deduction for older adults.
Specifically:
- Individuals aged 65 and older can claim a $6,000 deduction if their income is $75,000 or less.
- Married couples (65+) filing jointly may claim up to $12,000 if their combined income doesn’t exceed $150,000.
- The deduction phases out for incomes above these limits, disappearing entirely at $175,000 for individuals and $250,000 for couples.
- This bonus over-65 deduction is set to expire after 2028 unless Congress takes action.
The bonus deduction, which will stack on top of the existing extra standard deduction for those over 65, could reduce taxable income for many age 65 and older. That could potentially result in no federal tax liability on Social Security benefits.
However, it’s important to keep in mind that the underlying tax rules for Social Security benefits remain unchanged.
Additionally, as Kiplinger has reported, it’s worth noting that the budget reconciliation process used to pass the OBBB, which required only GOP support, prohibited direct changes to Social Security’s core structure.
Who benefits from the new over-65 bonus tax deduction — and who doesn’t
The “90%” figure cited by the SSA likely refers to estimates that most taxpayers age 65 or older will owe little or no tax with the new bonus standard deduction. But that doesn’t apply to all Social Security beneficiaries.
For example, individuals under the age of 65 don’t qualify for the deduction, and higher-income retirees will continue to pay taxes on their benefits due to how Social Security taxes are calculated.
The new bonus tax deduction primarily benefits those aged 65 and older with moderate or lower incomes. Those with incomes above the phase-out thresholds, as well as younger beneficiaries who begin collecting Social Security before age 65, are excluded. This means that while many could see some tax relief, it is not universal.
Additionally, the bonus tax break is set to expire after 2028 unless Congress renews it. Since the relief is not guaranteed long-term, retirees’ tax situations could change in the future.
Social Security email scams vs. official messages
It's also worth noting that for years, Social Security recipients have been warned about email scams and phishing attempts, with official advice often stressing that the agency rarely contacts people by email.
That caution has made some beneficiaries understandably wary of unexpected emails or other messages claiming to be from the Social Security Administration.
So, when the Trump administration’s SSA sent its unusual July 3 email, some recipients could have been unsure whether it was a genuine alert or a scam.
- Remember: If you receive a suspicious email about your SS benefits, the safest course is to avoid clicking any links or providing personal information.
- Instead, verify the message by contacting the Social Security Administration directly through its official channels.
Taxes on Social Security benefits: Bottom line
Social Security beneficiaries need to know that while the OBBB can offer tax relief to some, it doesn’t eliminate Social Security taxes, directly or permanently.
But that might not be an issue for some. For example, a 67-year-old retired financial executive reportedly expressed appreciation, telling the Wall Street Journal, “I would welcome any relief on taxes... It’s still short of my Social Security tax nirvana of having it completely tax-free.”
What can you do? Review your income situation and consult tax and financial planning professionals if needed to understand how the new bonus over-65 tax deduction may affect your tax filings.
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