H.R. 2266: Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simpler Taxes Act

This bill, known as the **Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simpler Taxes Act** (or **RETIREES FIRST Act**), proposes amendments to the tax treatment of Social Security benefits under the Internal Revenue Code.

Key Provisions

• Increase in Income Thresholds: The bill aims to increase the threshold amounts at which Social Security benefits are included in a taxpayer's gross income. Specifically, it sets:
  • $34,000 for individuals
  • $68,000 for married couples filing jointly
  • Zero for certain married individuals not filing jointly who live with their spouse.
• Inflation Adjustments: Beginning in 2026, these dollar amounts will be adjusted annually for inflation based on a specified cost-of-living formula to ensure they keep up with economic changes.
• Protection for Social Security Funds: The bill includes provisions to ensure that the Social Security trust funds will not suffer from financial impacts due to income changes resulting from these amendments. It mandates that the Treasury appropriates funds equal to any reductions in transfers to the Social Security funds caused by the bill's provisions.
• Implementation Date: The changes proposed by the bill will take effect for taxable years starting after December 31, 2025.

Reallocating Appropriations

Additionally, the bill plans to reallocate non-security discretionary appropriations to support the financial implications of the tax relief aimed at retirees. This includes the following measures:

• Fiscal Year Rescission: Starting from fiscal year 2027, the bill proposes a rescission of funds equivalent to the total cost of the tax relief measures, effectively adjusting appropriations downwards across various government programs.
• Exclusions for Security Spending: The rescission does not apply to discretionary appropriations related to security matters, ensuring that defense and security budgets remain intact.
• Reporting Requirement: An annual report detailing appropriations rescinded under this act must be prepared by the Office of Management and Budget starting in 2028.

Relevant Companies

None found.