A bill was recently introduced to eliminate federal taxes on Social Security income. For many older Americans, this marks a significant shift in how retirement savings are protected from extra burdens. The change aims to simplify the system and ensure seniors can retain more of their earnings.
By focusing on the direct impact of federal taxes on Social Security income, the bill reflects an effort to create lasting financial security. The introduced measure is designed to address a long-standing concern among retirees who feel the weight of these deductions.
Senator Ruben Gallego Leads the Charge
Democratic Senator Ruben Gallego of Arizona introduced new legislation that would permanently end federal taxes on Social Security benefits. His action highlights a growing demand for policies that protect seniors’ financial resources.
The legislation presented by the Senator aims to ensure that Social Security benefits remain untouched by federal taxes, reflecting both political leadership and a recognition of retirees’ needs. This introduced effort demonstrates the intention to permanently safeguard earned income.
The “You Earn It, You Keep It Act” Gains Support
The proposal, known as the You Earn It You Keep It Act, was introduced in April and reflects a shared effort between chambers. It mirrors the House version led by Representative Angie Craig, a Minnesota Democrat.
By aligning the proposal with both the House and the Senate, leaders like Representative Angie Craig ensured broader visibility for the You Earn It You Keep It Act. This version, shaped in April, shows how coordinated measures can create stronger policy momentum.
Why Seniors’ Benefits Are Still Taxed
Up to 85 percent of Social Security benefits may currently be taxed by the federal government, depending on overall income. During his 2024 presidential run, President Donald Trump pledged to end taxes on Social Security payments, yet after taking office he instead expanded a tax deduction for senior citizens through the One Big Beautiful Bill Act, signed into law in July.
The reality of taxed benefits affects millions of seniors whose income places them above threshold levels. While Trump’s pledge focused on eliminating this burden, the expanded tax deduction in the law provided partial relief for senior citizens. This contrast highlights the continuing debate over federal government policy on Social Security.
Key Details of the New Plan
Under Gallego’s plan, Social Security benefits would no longer face federal taxation. To offset the cost, the bill expands payroll taxes on annual earnings above $250,000, while wages up to $176,100 in 2025 remain subject to payroll taxes.
The plan also draws on Americans’ lifelong contributions, beginning from their first job at fourteen and spanning decades of work. Still, seniors are required to pay taxes on their hard-earned benefits, while the ultra-wealthy contribute less into the system. In a press release, Trump claimed he ended the tax, yet Gallego stated his bill would achieve it permanently.
Tax Breaks and Social Security Relief
A Social Security card pictured with $100 bills from GETTY illustrates the focus of this proposal. A temporary senior tax deduction from President Trump raised the standard deduction for seniors aged 65 and older by $6,000 between 2025 and 2028.
Though the deduction does not directly eliminate taxes on benefits, it may shield more income from federal taxes for retirees. This relief gradually phases out for individuals with earnings above $75,000 and married couples above $150,000. According to the White House, the measure is expected to exempt about 51.4 million seniors, or 88 percent of recipients, from paying.
Public Reactions and Strong Voices of Support
Senator Ruben Gallego stated that seniors had earned their Social Security, and his bill ends an unfair tax, while Trump catered to billionaires. Shannon Benton, executive director of the Senior Citizens League (TSCL), praised the Senate version of the You Earned It You Keep It Act as essential legislation for meaningful tax relief.
Supporters argue that eliminating federal taxes is a commonsense approach to ensure older Americans keep more of their income. They credit Representative Craig and the White House for supporting the One Big Beautiful Bill Act in July, which created the largest tax break in history for America’s seniors. This recognition reinforced promises that after years of earning, retirees could save their money—promises made and kept.
The Path Forward in Congress
The Gallego bill now moves through the Senate, while in the House, Craig’s version has been referred to the Committee on Ways and Means and the Committee on Energy and Commerce.
These steps show how the bill advances through legislative channels, ensuring that both the Senate and the House have the chance to debate and refine the measure before a final decision.