S. 1109: Social Security Check Tax Cut Act

The Social Security Check Tax Cut Act is a proposed legislation that aims to temporarily adjust how Social Security benefits are taxed in the United States for specific years. Here is a breakdown of what the bill entails:

Key Provisions

• Temporary Tax Reduction: The bill introduces a temporary reduction in the amount of Social Security benefits that are included as gross income for tax purposes during specific years. This means that individuals receiving old-age or survivors insurance benefits from Social Security and tier 1 railroad retirement benefits would pay taxes on a smaller portion of those benefits.
• Applicable Tax Years: The tax adjustment would be applicable for taxable years starting after December 31, 2025, and before January 1, 2028.
• Separate Calculations: The bill specifies that the calculation of taxable income from Social Security benefits will be done separately for two categories:
  • Benefits received as old-age or survivors insurance benefits under Section 202 of the Social Security Act.
  • Benefits received as disability benefits under Section 223 of the Social Security Act.
• Reduction Details:
  • For the tax year beginning after December 31, 2025, and before January 1, 2027, taxpayers will only include 90% of their Social Security benefits in their gross income.
  • For the tax year beginning after December 31, 2026, and before January 1, 2028, taxpayers will only include 80% of their Social Security benefits in their gross income.

Funding for Trust Funds

In order to protect the financial integrity of the Social Security and Medicare programs, the bill requires the federal government to transfer funds to the Federal Old-Age and Survivors Trust Fund, the Federal Disability Insurance Trust Fund, and the Medicare Hospital Insurance Trust Fund. This transfer will cover the loss of revenue that results from the tax reductions specified in the bill.

Effective Date

The changes proposed by this bill would take effect starting with taxable years that begin after December 31, 2025.

Relevant Companies

None found.