The tax law known as the One Big Beautiful Bill Act (OBBBA), signed into law by President Donald Trump on July 4, 2025, includes a new temporary tax deduction aimed at taxpayers age 65 and older that could reduce their federal tax burden on filings for tax years 2025 through 2028.
Under the provision, eligible seniors may claim up to a $6,000 additional deduction on their federal income tax returns, on top of the regular standard deduction or any itemized deductions. Married couples in which both spouses are 65 or older may qualify for up to $12,000 in total senior deductions.
To qualify, taxpayers must be 65 or older by the end of the tax year and have a valid Social Security number. There are income limits for full eligibility: single filers generally must have a modified adjusted gross income (MAGI) below about $75,000, and married joint filers must have a MAGI below about $150,000. The deduction phases out gradually for incomes above those thresholds and is unavailable once income exceeds the higher limits.
The deduction is available whether a senior itemizes deductions or takes the standard deduction, and its primary effect is to lower taxable income, which can reduce tax liability or increase a tax refund when filing. It does not directly eliminate federal tax on Social Security benefits, though in many cases the deduction may reduce tax owed on part of those benefits, Moneywise reported.
The senior tax break is one of several individual tax provisions in the 2025 law, which also extended prior tax cuts and added other deductions for things like wage income and interest expenses.
One of the most compelling reasons to claim this deduction is the rising cost of health care.
By 2026, Medicare Part B premiums and other cost-sharing requirements continue to climb, often reducing a significant portion of the annual cost-of-living adjustment (COLA) increase. For many seniors, these recurring medical expenses are a major drain on their retirement savings, the outlet reported.
By utilizing the $6,000 deduction to lower your federal tax liability, you can effectively increase your available funds for covering these premiums, deductibles, and out-of-pocket costs, without depleting your principal savings further.
It’s important to note that the benefit of this deduction largely depends on whether you owe federal income tax. Many lower-income seniors may have zero tax liability after applying the standard deduction. For them, an additional deduction offers no extra benefit since it is not a refundable credit.
The ideal candidates for this deduction are retirees who have enough taxable income—whether from IRA withdrawals, pensions, wages, or investments—such that a $6,000 reduction in taxable income leads to actual tax savings, the report added.
One of the most flexible aspects of this new law is that it is available to both itemizers and non-itemizers. This means you don’t have to choose between your charitable giving or medical expense deductions and the new $6,000 deduction. However, it’s important to run the numbers to determine whether itemizing is more beneficial than taking the standard deduction, particularly if you have significant state and local taxes or mortgage interest.
Timing is also crucial for maximizing this benefit. Between now and 2028, consider strategically managing your Individual Retirement Account (IRA) withdrawals or exploring Roth conversions to make the most of the deduction while staying below the phaseout thresholds.
“When doing so, always keep an eye on your provisional income to avoid accidentally triggering higher taxes on your Social Security or higher Medicare IRMAA (income-related monthly adjustment amount) surcharges,” Moneywise noted further.
“Whether you prepare your own taxes or work with a professional, double-check that the deduction is applied correctly, especially on joint returns, to ensure you are capturing the full $12,000 for a married couple,” said the report.
