H.R. 1129: Tax Relief Unleashed for Seniors by Trump Act

This bill, officially titled the "Tax Relief Unleashed for Seniors by Trump Act," proposes to amend the Internal Revenue Code of 1986 regarding the taxation of Social Security benefits. Here’s a breakdown of the key components of the bill:

Increase in Exclusion Limits

The bill aims to increase the amount of Social Security benefits that are excluded from gross income, meaning that seniors will pay less in taxes on their Social Security income. The proposed changes are:

• For individuals, the current exclusion threshold will rise from $25,000 to $50,000.
• For couples filing jointly, this threshold will increase from $32,000 to $64,000.
• For more complex cases, the thresholds for higher income brackets will adjust from $34,000 to $59,000 for individuals and from $44,000 to $76,000 for couples filing jointly.

Inflation Adjustments

In addition to raising these thresholds, the bill includes provisions for future inflation adjustments. Starting in 2026, the dollar amounts for the exclusion thresholds will automatically increase based on the cost-of-living adjustments. Specifically:

• The amounts will be increased by a percentage based on the cost-of-living adjustment for the calendar year, with adjustments rounded to the nearest $100.

Effective Date

The changes stipulated in the bill will apply to taxable years starting after December 31, 2025.

Summary

Overall, the "Tax Relief Unleashed for Seniors by Trump Act" is designed to reduce the tax burden on seniors by modifying how Social Security benefits are taxed. The proposed changes aim to make a larger portion of these benefits tax-free and to ensure that these thresholds keep pace with inflation in the future.

Relevant Companies

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