With the passing of Big Beautiful Bill, there would be a wave of relief for the seniors across the United States. Soon, there will be a rollout of the New Senior Bonus which is a tax reduction program for seniors. It can of great help for seniors who look for a financial cushion after retirement. This article would break down on how this program would work, who qualifies and as a senior, how much extra amount would receive.
What is Senior Bonus in the United States?
The “Senior Bonus” in the United States is basically a temporary tax deduction program launched under the “One Big Beautiful Bill”, signed by the President Donald Trump on 4th July 2025 which will effective only till 2028. The aim would be easing financial burden on the seniors who are of age 65 years or more. Eligibility would be based on the total income and this benefit would cease if the threshold is reached. This temporary relief serves as an addition to the ongoing perks which seniors usually receive and don’t remove taxes on the social security income.
Through New Senior Bonus, the seniors can deduct up to $6000 (for singles) or $12,000 (for couples) from their taxable income till 2028. While this is only a temporary tax relief program, but it is a part of a larger safety programs which can help the seniors in staying financially sound in their later years.
How New Senior Bonus in the United States will work?
With the One Big Beautiful Bill Act getting passed, the new senior bonus would be effective for seniors where they can deduct up to 6000 (for singles) or $12,000 (for couples) from their taxable income till 2028. This program will run alongside the usual standard deduction from seniors – $2,000 for singles and $3,200 for couples. This would be more beneficial for mid-income seniors.
While it doesn’t remove taxes on social security benefits, the New Senior Bonus is relatively easier to track and is more affordable for both government and people as implementing this for a temporary period would cost the federal government about $66 billion over ten years; better than removing the taxation on social security altogether which the experts believe can cost the federal government up to $1.5 trillion for a decade.
Eligibility criteria for New Senior Bonus
Following are the eligibility criteria to get qualified for the new senior bonus:
- Age: You should be of 65 years or more by the end of tax year in which you are claiming the deduction.
- Income Thresholds: The income threshold which is Modified Adjusted Gross Income (MAGI) should be about $75,000 or lower for singles and $150,000 or lower for couples.
- Phase Out Amounts: Your benefits and tax deductions under New Senior Bonus would cease to exist if your total income gets above $175,000 (single) or $250,000 (couple). The deductions would phase out between $75,000–$175,000 (singles) and $150,000–$250,000 (couples).
How much money could you save under new Senior Bonus?
One thing to be noted is that, under One Big Beautiful Bill Act (OBBBA), in the new senior bonus, you won’t be receiving any additional amount as bonus. You would be entitled to a reduced taxable income. If you meet the qualifying criteria, then you can save upto $720 every year if you are single, or $1,440 per year if you are a couple. Overall, the amount which you save would depend upon your income bracket and tax bracket.
When will the New Senior Bonus kick start?
The new senior bonus – basically a tax deduction will be applied from the 2025 tax year. It would be covering the income generated after 31st December 2024 till the time one would file for income tax in early 2026. Although the bill has been signed into law on 4th July 2025, the deduction would be applicable till 21st December 2028.
Will the New Senior Bonus affect Social Security Income?
The new senior bonus won’t change how much amount you are currently receiving from the social security or doesn’t introduce any new program. It is only a temporary deduction till 2028 which would be helpful in reducing the taxable amount and would gradually reduce or remove completely any taxes you may owe in your social security benefits.
This benefit would be more helpful for the middle-income seniors, as this would make their social security benefits tax free from 2025 to 2028, due to which they can claim their full social security benefits without any taxes. So, your social security income would remain almost same, the new senior bonus would allow you to keep more of the amount.
What all things should seniors do now?
The seniors should first check their eligibility criteria to qualify under new senior bonus – they should check their income brackets. Then they should gather important documents like pension records, social security benefits statements, investment income statements to check their income tax bracket. If you are near the phase out range, then it is advisable to speak to a tax advisor. You can even consider making adjustments to your tax withholding and tax payments – so that you don’t overpay or underpay the while filing the taxes. Lastly, keep a tab on the information coming from the IRS, as they would be providing the much-needed updates on their website.
| NLR News Home | Click Here |
Hello! I’m Kaylani , a professional content writer with a knack for breathing life into words. I have been providing high-quality, research-driven content in Sectors like Technology & Personal Finance . With a background in Finance Tech Management , I specialize in turning complex information into engaging content that resonates with a wide.