Retirement Social Security

Millions of Seniors Could Start Owing Taxes on Social Security Benefits in 2029

Many retirees aren't paying taxes on Social Security benefits right now, but that could change very soon.

By Maurie Backman , Edited by Laura Hohenstein

Updated May 25, 2026

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When it comes to making retirement plans, a lot of people know to factor Social Security into their income. What they don't know is that Social Security benefits can be taxable, and that the thresholds at which those taxes apply can be fairly low.

This year, however, the majority of people who collect Social Security benefits are not paying federal taxes on that income. And the reason has to do with a major tax break that was introduced last year.

But while most Social Security recipients may be getting out of paying taxes on their benefits right now, they should gear up to potentially start owing those taxes in 2029.

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$6,000 senior tax benefit removes Social Security tax burden for now

In 2025, the One Big Beautiful Bill Act (OBBBA) introduced a number of big changes to the U.S. tax code. And one of those changes was a new $6,000 senior tax deduction available for filers ages 65 and over.

What the new deduction does is exempt a portion of income from taxes. But for most seniors on Social Security, that deduction is significant enough that it lowers their income to the point where their benefits are not subject to taxes.

In fact, the White House, citing an analysis from the Council of Economic Advisers, says that as a result of the new senior tax deduction, 88% of Social Security recipients should not have to pay taxes on benefits.

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The new senior tax break isn't permanent

Right now, many Social Security beneficiaries are getting a huge reprieve. But the $6,000 senior tax deduction isn't permanent. It's only available through the 2028 tax year, which means that come 2029, many older Americans who aren't paying taxes on their Social Security benefits now could owe that money then.

Whether taxes are owed on Social Security benefits or not boils down to provisional income.

Provisional income is calculated by taking seniors' modified adjusted gross income plus 50% of their annual Social Security benefits.

For single tax-filers, a provisional income between $25,000 and $34,000 means having to pay federal income tax on up to 50% of their Social Security benefits. Beyond $34,000, up to 85% of Social Security benefits could be taxed.

For married couples filing jointly, these thresholds aren't much higher. A provisional income between $32,000 and $44,000 means having to pay taxes on up to 50% of Social Security benefits. Beyond $44,000, up to 85% of benefits could be taxed.

Once seniors are no longer able to exclude $6,000 from their income (or $12,000 from their joint income), the risk of exceeding a provisional income threshold of $25,000 for singles or $32,000 for couples greatly increases.

Social Security benefits rise while provisional income thresholds don't

It's not just retirees who were once required to pay taxes on Social Security who risk having their benefits taxed in 2029 once the $6,000 senior deduction expires. Even those who didn't owe taxes on Social Security previously may become liable for them in a few years.

Part of the reason is that the provisional income thresholds are extremely low and have not been adjusted for inflation. Those thresholds were initially established in 1983. In 1993, they were modified to include the second tier of taxes on benefits. But this means that there's been no adjustment to those numbers in decades.

On the other hand, Social Security benefits are eligible for a cost-of-living adjustment (COLA) each year. As benefits increase due to COLAs and the provisional income thresholds stay in place, more seniors are likely to see their income pushed to the point where taxes on benefits apply.

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Taxed benefits are good for Social Security

Having to pay taxes on Social Security benefits can really sting for retirees. For some, it's a matter of losing out on critical income they need to cover expenses. But also, taxes on benefits can feel like double taxation.

The way to earn Social Security, at least for many people, is to work and pay into the program. So to then owe taxes on those benefits might seem like a raw deal. But taxes on Social Security benefits are actually good for the program, since they serve as a source of revenue.

Even though Social Security gets most of its revenue from payroll taxes, taxed benefits also give it money it can use to keep up with its expenses. Seeing as how Social Security is facing the possibility of broad benefit cuts, the expiration of the $6,000 senior tax deduction in 2028 isn't necessarily a terrible thing, even though it might hurt many retirees individually.

Bottom line

For many people, Social Security benefits spell the difference between a stress-free retirement or not. So it's natural to want to hang onto all of that money.

If you're getting a break from having your benefits taxed now, you should know that it may be temporary. And it's important to plan for the fact that you might start owing taxes on those benefits in a few years, especially if the program's COLAs are particularly generous between now and 2029. You may want to work with a tax professional to prepare for that change or to see if there are strategies that could keep you from owing those taxes.

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