H.R. 1130: Bonus Tax Relief for America’s Seniors Act

The bill titled "Bonus Tax Relief for America’s Seniors Act" proposes changes to the Internal Revenue Code to increase the financial benefit seniors receive through an additional standard deduction. Here’s a breakdown of its main provisions:

Increase in Additional Standard Deduction

The bill amends the Internal Revenue Code to raise the additional standard deduction amount for seniors from the current $600 to $5,000. This change means that seniors would be able to reduce their taxable income by this larger amount when they file their taxes, potentially leading to lower overall tax liabilities.

Inflation Adjustment

In addition to the increase in the deduction amount, the bill includes a provision for future adjustments based on inflation. Specifically, for taxable years starting after December 31, 2026, the $5,000 amount will be adjusted annually in relation to increases in the cost of living. This adjustment will ensure that the value of the deduction does not diminish over time due to inflation. The increase will be calculated using a specific formula that factors in the cost-of-living adjustments.

Conforming Amendments

The bill contains various amendments to ensure consistency with other sections of the tax code. These amendments clarify how the new provisions should interact with existing regulations, ensuring that the changes are properly integrated into the tax system.

Effective Date

The new provisions will take effect for taxable years beginning after December 31, 2025. This means seniors will see the benefits of these changes starting with their tax filings for the year 2026.

Implementation Summary

• Increase the additional standard deduction for seniors from $600 to $5,000.
• Introduce annual inflation adjustments for the deduction starting in 2026.
• Make conforming amendments to clarify interactions with existing tax code provisions.
• Effective for taxable years after December 31, 2025.

Relevant Companies

None found.