MILLIONS of Americans have received a potentially misleading email from bosses over at the Social Security Administration.
The message comes in the wake of a landmark law being passed under President Donald Trump’s administration.
GettyThe Social Security Administration send out a controversial message in the wake of a law passed by the Trump administration[/caption]The SSA sent out a misleading email to beneficiaries and other Americans last week regarding the One Big Beautiful Bill Act that President Donald Trump signed into law on July 4.
Advocates are now working to set the record straight to ensure Americans are aware of how the new laws will impact their tax bill.
The federal agency sent an email and shared a blog post on July 3 alerting that the One Big Beautiful Bill “includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries.
“The bill ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits,” continues the post.
Trump has long promised to completely eliminate taxes on Social Security benefits, with the White House stating that the 900-page bill fulfills that promise.
That provision was ultimately removed from the version of the bill that was signed into law because it violated Senate rules.
Following the One Big Beautiful Bill’s passage, the SSA’s announcement on the bill and subsequent changes has been criticized as unusually political.
“The Social Security Administration is celebrating the passage of the One Big, Beautiful Bill, a landmark piece of legislation that delivers long-awaited tax relief to millions of older Americans,” reads the notice.
The federal agency’s statements were “completely unprecedented,” Alex Lawson, executive director of Social Security Works, told USA Today. “It’s an enormous breach of trust.”
Lawson argued that the SSA’s message praising the One Big Beautiful Bill violated the Hatch Act, a law against partisan political activity by federal government staff.
WALLET RELIEF
President Trump vowed to get rid of income tax on Social Security payments throughout his campaign.
Instead, Americans will see a $6,000 federal income tax deduction for those who are age 65 and older with an income under $75,000, or a $12,000 break for married couples earning less than $150,000.
The tax break phases out for those with an income above these thresholds, ending for individuals making $175,000 or greater and couples with an income of $250,000 or more.
“This is a historic step forward for America’s seniors,” said Social Security commissioner Frank Bisignano.
HOW TO SUPPLEMENT YOUR SOCIAL SECURITY
Here's how to supplement your Social Security:
Given the uncertainty surrounding Social Security’s long-term future, it’s essential for workers to consider ways to supplement their retirement income.
Senior Citizens League executive director, Shannon Benton recommends starting early with savings and investing in retirement accounts like 401(k)s or IRAs.
401(k) Plans A 401(k) is a retirement account offered through employers, where contributions are tax-deferred. Many employers also match employee contributions, typically between 2% and 4% of salary, making it a valuable tool for building retirement savings. Maxing out your 401(k) contributions, especially if your employer offers a match, should be a priority. IRAs An Individual Retirement Account (IRA) offers another avenue for retirement savings. Unlike a 401(k), an IRA isn’t tied to your employer, giving you more flexibility in your investment choices. Contributions to traditional IRAs are tax-deductible, and the funds grow tax-free until they are withdrawn, at which point they are taxed as income.“For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans. By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump’s promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they’ve earned.”
The provision will bump up the portion of seniors receiving Social Security who will not pay income tax on their benefits from 64% to 88%, per the White House.
However, many Social Security beneficiaries and retirees will not get a tax break.
“Lower-income earners benefit less than middle and upper-middle income households,” Garrett Watson, senior policy analyst at the Tax Foundation, told USA Today.
Seniors in the bottom 20% income will save on average just 0.1% on their tax bill, per an analysis from the Tax Policy Foundation.
“It’s been marketed as tax relief for seniors, but a lot of seniors are going to be surprised when they find out it doesn’t apply to them,” said Watson.
“I’m getting asked all the time by folks what this actually means for their tax situation.”
Beneficiaries younger than 65 or those who already bring in too little income to pay income taxes will not benefit from the tax break, and neither will individuals earning over $75,000.
The One Big Beautiful Bill’s tax deductions will provide the greatest financial leverage to upper-middle class Americans who pay taxes on their retirement benefits.
Aside from offering tax breaks for certain Americans, the new legislation could cost taxpayers tens of millions of dollars after a “payment error” linked to SNAP benefits.
Plus, the bill proposed an instant $1,000 bonus for families – you may have unknowingly qualified.
The SSA is rolling out tax deductions for eligible Social Security beneficiaries under Trump’s One Big Beautiful Bill ActGetty Read More Details
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