This bill would eliminate federal income taxation of Social Security benefits. Currently, up to 85 percent of Social Security benefits can be counted as taxable income for higher-earning retirees, but this bill would repeal that requirement entirely, effective immediately upon passage. The change would primarily benefit Social Security recipients, particularly those with moderate to higher incomes who currently owe taxes on their benefits. To prevent the Social Security trust funds from losing revenue due to reduced federal transfers, the bill includes an appropriation to compensate the Social Security and Railroad Retirement trust funds for any lost funding resulting from the change. The legislation would increase the federal deficit unless offset by other revenue measures.
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