Will increases in the 2026 standard deduction reduce taxes for retired couples on Social Security?
Executive summary
A new additional standard deduction for taxpayers 65 and older — roughly $6,000 per individual (so up to $12,000 for married couples filing jointly) — is in effect for tax years beginning 2025 and will be applied to 2026 returns, and it can significantly reduce or eliminate federal income tax on Social Security for many retired couples (sources estimate the deduction could raise the share of seniors not paying tax on benefits from about 64% to as much as 88%) [1] [2]. Whether a retired couple actually pays less federal tax on their Social Security in 2026 depends on their total taxable income, the Social Security “provisional income” calculation and state tax rules; the extra deduction helps many low- and middle-income retirees but did not repeal the underlying tax rules that can make up to 85% of benefits taxable [3] [4].
1. What changed: a bigger senior standard deduction and when it applies
Congress and subsequent IRS guidance created an additional standard deduction for people 65 and older — roughly $6,000 extra per individual effective for tax years beginning January 1, 2025 — so married seniors filing jointly can claim up to $12,000 more on top of the regular standard deduction; these amounts will appear on tax year 2026 returns filed in 2027 [1] [5].
2. Why that matters to Social Security taxation
Social Security benefits aren’t automatically tax‑free; the IRS uses a provisional income formula (half of Social Security plus other taxable income and certain tax‑exempt income) to decide whether benefits are taxable. Increasing the standard deduction reduces taxable income and can lower provisional or total taxable income enough that benefits fall below the thresholds that trigger taxation, so the senior deduction can “reduce or fully offset taxes on Social Security income for millions” [6] [3].
3. How many retirees this could help — competing estimates
Advocates and some reporting say the senior deduction will substantially expand the share of beneficiaries who owe no federal income tax on benefits — one White House Council of Economic Advisors figure cited would raise the non‑taxed share from about 64% to roughly 88% — and outlets say millions of older Americans could see Social Security tax reduced or eliminated [2] [6]. Analysts such as the Tax Foundation caution the effects are concentrated among low‑ and middle‑income retirees and that different policy alternatives (for example fully exempting Social Security) would shift benefits differently across income groups [7].
4. Limits and the rule that was not changed
The One Big Beautiful Bill (and the IRS inflation adjustments) did not repeal the tax rules that can subject up to 85% of Social Security to federal income tax; it provided a bigger standard deduction that can offset those rules for many taxpayers but does not automatically make Social Security tax‑free for everyone [3] [8]. Available sources do not mention a blanket end to Social Security taxation; they expressly state the deduction is additive to existing rules rather than a replacement [3].
5. The arithmetic retirees should check
Whether a retired couple will pay less depends on: total combined income (including pensions, IRAs, part‑time wages, and half of Social Security in the provisional income test), the couple’s filing status and whether they take the standard deduction, and state tax treatment (some states are phasing out or already exempting benefits) [4] [2] [5]. For many couples whose other income is modest, the extra $12,000 for married filers will be large enough to bring provisional income below taxation thresholds; for couples with larger retirement account withdrawals or pensions, the deduction may not fully offset taxable benefits [1] [7].
6. Offsetting factors that could reduce the net benefit
Higher Medicare Part B premiums and the 2026 cost‑of‑living adjustment both change retirees’ take‑home and taxable incomes; media reporting warns that higher premiums (Part B rising to around $202.90 monthly in 2026) will offset some of the COLA and can complicate withholding and net effect calculations, so the extra deduction is only one piece of a broader 2026 picture [9]. Additionally, some analyses note the senior deduction is temporary (effective 2025–2028 under the cited legislation) and that policy tradeoffs exist, including budgetary impacts [1] [7].
7. Practical takeaway and next steps for retired couples
Retired couples should estimate their 2026 provisional income including half of projected Social Security, IRA/pension withdrawals and wages; apply the additional senior standard deduction (up to $12,000 for married couples) and the 2026 standard deduction amounts released by the IRS; and consider state tax rules and Medicare premium changes that affect net cash flow. Several outlets recommend consulting a tax pro because the new deduction is substantial but its impact is fact‑specific [5] [10].
Limitations: this analysis uses current public reporting and IRS adjustments; available sources do not provide individualized calculations or guarantee outcomes for any specific couple [3] [1].