This bill would eliminate federal income taxes on Social Security benefits for retirees. Currently, seniors with higher incomes must include part of their Social Security payments as taxable income; this bill would end that requirement for all future tax years. The legislation would directly benefit senior citizens receiving Social Security by allowing them to keep their full benefits without tax consequences. To offset the lost tax revenue, the bill includes a provision to compensate Social Security and Railroad Retirement trust funds with general Treasury funds equal to any reduction in their transfers due to this change. The bill also includes language expressing Congress's intent that the replacement funding should not come from tax increases elsewhere, though it does not specify how the approximately $20+ billion annual revenue loss would be addressed.
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