[1]Approximately 50% of retirees pay taxes on their Social Security benefits, compared to less than 10% in 1984!
Thomas Massie (R-KY) reintroduced H.R. 1040 [2], the Senior Citizens Tax Elimination Act. It was referred 02/06/2025 to the House Committee on Ways and Means. This bill assists seniors by eliminating the double tax on Social Security benefits. This bill supports President Trump’s campaign to eliminate this unfair tax for seniors.
Representative Daniel Webster (R-FL) co-sponsored this legislation, stating, “For decades, seniors have paid into Social Security with their tax dollars. Now, when many seniors are on a fixed income and struggling financially, they are being double-taxed because of income taxes on their Social Security benefits.
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[3]
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As the Congressional Research Service reports, “Before 1984, Social Security benefits were exempt from federal income tax. Congress then enacted legislation to tax a portion of those benefits, with the share gradually increasing as a person’s income rose above a specified income threshold.”
Today, up to 85 percent of a senior’s Social Security benefits [4] are taxable under this draconian law. They should expand this proposal to eliminate the Income Required Monthly Adjustment Amounts (IRMAA) that apply to Medicare Part B and D payments [5]. Why should many seniors pay up to four times more for the same benefit?
If passed, this act would amend the Internal Revenue Code of 1986 to terminate the inclusion of tier I railroad retirement benefits and Social Security benefits in an individual’s gross income starting in 2025 (tax returns filed in early 2026).
New Executive Order Pushes for Federal Workforce Reduction [6]: What It Means for Government Jobs
Alternative Proposal
The Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simple Taxes (RETIREES FIRST) [7] Act was introduced by U.S. Senators Roger Marshall and Marsha Blackburn, proposes significant changes to Social Security taxation, promising financial relief for millions of retirees. This proposal dramatically raises the income thresholds as noted below:
- Raising the provisional income threshold to $34,000 for single filers and $68,000 for married filers. (the provisional income threshold for single fliers is presently $25,000 and $32,000 for married filers)
- Updating the thresholds annually to prevent bracket creep and protect retirees from inflation’s impact.
- Simplifying tax rules to maintain a single 85 percent inclusion rate for benefits exceeding the new thresholds, simplifying the filing process, and reducing confusion for seniors.
Summary
These bills are long overdue. They will hopefully be reconciled and make it to the floor for a vote. Both bills require revenue neutrality; other government-wide cuts would make up the difference. With DOGE finding excessive spending, waste, and abuse in other government agencies, there should be more than sufficient funds to compensate for any lost funds.
One reason the WEP and GPO programs were repealed [8] is the tens of thousands of phone calls that constituents made to their representatives [9]. This week, I intend to call mine to express my support for these bills.
The Future of Federal Telework: New Rules, and What Comes Next in the Return to In-person Work [10]
Helpful Retirement Planning Tools
[11]
Federal employees who are retiring soon and recent retirees with security clearances
can search thousands of high-paying defense and government contractor job [11]s.
- Financial Planning Guide for Federal Employees and Annuitants [12]
- Complimentary Retirement Planning Session [13]
- Deciding When To Retire – A 7-Step Guide [14]
- How to Avoid Retirement Processing Delays [15] (UPDATE)
- Hiring a Financial Planner [16]
- TSP Guide [17]
- Budget Work Sheet [18]
- 2025 Pay Tables [19]
- 2025 Federal Employees Leave Record [20]
- Retirement Planning for Federal Employees & Annuitants [21]
- The Ultimate Retirement Planning Guide – Start Now [22]
- Medicare Guide [5]
- Social Security Guide [4]
Disclaimer: The information provided may not cover all aspect of unique or special circumstances, federal regulations, medical procedures, investment, and benefit information are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance including OPM’s retirement center.
Over time, various dynamic economic factors relied upon as a basis for this article may change. The information contained herein should not be considered investment advice and may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult with a financial, medical or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
Last 5 posts by Dennis Damp
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- (NEW) OPM Requesting Weekly Email Accomplishments! [24] - March 1st, 2025
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- Tax Forms and Annuity Statement Availability [29] - January 31st, 2025
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