Millions of American retirees just received unexpected relief from Washington, and it is arriving at a moment when inflation and rising costs have strained fixed incomes across the country.
A newly signed tax package backed by President Donald Trump includes a targeted benefit for older Americans that could lower federal tax bills by hundreds of dollars starting in 2026. According to IRS guidance and multiple tax policy analyses, eligible retirees could see savings of up to $450 under the new rules.
The legislation, officially titled the One Big Beautiful Bill Act, creates a temporary tax deduction for Americans age 65 and older. The provision is designed to reduce taxable income and, in many cases, limit how much Social Security income is subject to federal taxation.
Under the law, individuals who are 65 or older can claim an additional $6,000 deduction on their federal tax return. Married couples where both spouses qualify may deduct up to $12,000. While the benefit is generous, it is not unlimited. Higher earners will see the deduction gradually reduced as income rises.
For single filers, the deduction begins to phase out once modified adjusted gross income exceeds $75,000 and disappears entirely at $175,000. For married couples filing jointly, the phase-out starts at $150,000 and ends at $250,000, according to reporting cited by international and U.S. tax analysts.
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