Find out if you qualify for the new senior tax credit

For seniors 65 or older, you may owe less in taxes when you file next year. New Tax Break for Seniors Trump’s new tax bill, the Big Beautiful Bill (OBBB), offers an additional standard deduction of $6,000 to Americans 65 and older.

This requirement is only valid until 2028, so there is a limited window to take advantage of it.We break down how it works, who’s eligible, and how it can inspire you to change your tax filing strategy.

Who is eligible for the senior citizen tax credit?

To be eligible for the deduction, a taxpayer must be 65 or older by the end of the tax year. The discount applies to eligible individuals as well as married couples applying jointly. For married couples, the deduction is $6,000 per qualifying individual, or $12,000 total.

While this deduction can provide some tax relief, high-income earners will not qualify for the full benefit amount. The feature begins by phasing out bloggers who earn more than $75,000, or co-bloggers who earn more than $150,000.

“Above these amounts, the deduction phases out and disappears completely at a combined income of $175,000 for individuals and a combined income of $250,000 for married couples,” added Taucier Smalls-West, tax accountant and founder of West Financial Services, LLC.

The tax deduction may also reduce the amount of taxes you pay on your Social Security benefits. This is because Social Security benefits are taxed based on your combined income. This number includes your adjusted gross income (AGI), pensions, interest, dividends, and capital gains plus half of the total Social Security benefits you collected that year.

“The IRS uses ‘joint income’ to determine whether a portion of Social Security benefits will be taxed,” Smalls-West explained. “Depending on this number, anywhere from 0% to 85% of benefits could be taxed.”

So, by reducing your overall gross income, a large tax break can also reduce the amount of taxes you pay on your benefits, depending on your combined income.

How does the new tax deduction for seniors work?

This new deduction stacks on top of the existing standard deduction and other additional deductions. The pre-existing large deduction is $2,000 for single filers, and $3,200 for couples filing jointly.

“Right now, seniors who take the standard deduction will get an additional $2,000 (tax year 2025) each on top of the regular standard deduction,” Smalls-West explained. “Beginning in tax year 2025, they will also be able to claim an additional $6,000, and the deduction can be taken whether they take the standard deduction or itemized deductions.”

The standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly. With an additional deduction of $6,000 per person, qualifying seniors can deduct up to $23,750, and qualifying couples up to $46,700.

Reconsider your tax strategy

The new OBBB changes may prompt older taxpayers to change how they handle their tax returns, especially when choosing between the standard and itemized deduction.

Since the Tax Cuts and Jobs Act took effect in 2018, the number of taxpayers filing has dropped dramatically, from about 30% to less than 10%. This is largely because the TCJA nearly doubled the standard deduction, making it a better option for most filers.

The OBBB is building on this shift by enhancing the standard deduction, especially for those 65 or older (although a senior citizen tax credit is available for those who itemize).

However, taking the standard deduction may not be the best option for everyone.

Seniors with higher medical costs, large charitable donations, or large state and local taxes may have higher savings if they itemize deductions, especially in years when expenses are unusually high. Additionally, OBBB changed the deduction for state and local taxes (SALT), increasing the amount of state and local taxes people can deduct from their income. As a result, itemization may be more attractive to some taxpayers.

“For those approaching income phase-out thresholds, timing and planning can make a big difference,” Smalls-West said. “Strategies such as delaying retirement account withdrawals, delaying the sale of appreciated assets, or bundling large medical expenses and charitable contributions into the same tax year can help preserve eligibility for the deduction and maximize its impact.”

In general, while the expanded standard deduction will likely be the default option for most seniors, there will still be scenarios where itemizing provides better results. Taxpayers should use the period from 2025 to 2028 to evaluate whether their current tax strategies can still help maximize their tax efficiency under the new rules.

“Since this benefit is only guaranteed from 2025 through 2028, planning becomes even more important — especially for seniors with fluctuating income,” Smalls-West said.

Bottom line

The senior tax deduction is one of several changes to the OBBB aimed at providing targeted tax relief to individuals and families. With the right planning, the new deduction can provide some additional tax savings.

Taxpayers who are approaching or over the age of 65 should consider speaking with a tax professional to ensure they understand how this change will affect their specific situation and how to plan accordingly.