What the No Tax on Social Security Bill proposes
The No Tax on Social Security Act is a bill introduced in Congress that would prevent the federal government from taxing Social Security benefits. Currently, depending on your income level, you may owe federal income tax on up to 85 percent of your Social Security payments. This bill would eliminate that tax entirely, meaning all Social Security benefits would be received tax-free.
The bill does not currently apply to anyone — it has not passed into law. Understanding what it proposes helps you see how your tax situation could change if Congress passes it, and it also clarifies how Social Security taxation works today.
Key Takeaways
- The No Tax on Social Security Act would make all Social Security benefits tax-free at the federal level, eliminating the current system where up to 85 percent of benefits can be taxed.
- Right now, whether you owe tax on Social Security depends on your "combined income" — your adjusted gross income plus non-taxable interest plus half your Social Security benefits.
- The bill has been introduced multiple times but has not passed; you cannot count on it when planning your retirement taxes today.
- Some states already do not tax Social Security benefits, but federal tax is separate and would require this bill to change.
- If the bill passes, it would affect millions of retirees who currently file returns and pay tax on their benefits.
How Social Security is taxed right now
Social Security taxation depends on your total income, not just what you receive from Social Security. The IRS uses a figure called combined income, which adds together your adjusted gross income, any non-taxable interest, and half of your Social Security benefits.
If you are single and your combined income falls between $25,000 and $34,000, you may owe tax on up to 50 percent of your benefits. If it exceeds $34,000, you may owe tax on up to 85 percent. For married couples filing jointly, those thresholds are $32,000 and $44,000. If your combined income is below those thresholds, your benefits are not taxed at all.
This means a retiree with modest Social Security income but other sources of income — a pension, part-time work, investment earnings, or withdrawals from retirement accounts — can end up owing federal tax on their benefits even though they thought of Social Security as "earned" money they already paid taxes on during their working years.
What would change if the bill passes
If the No Tax on Social Security Act becomes law, the combined income thresholds would disappear. You would not file a tax return to calculate how much of your benefits are taxable, because none of them would be. This would simplify tax filing for millions of retirees and would put more money in their pockets each year.
The change would apply only to federal income tax. State taxes are separate — some states already exempt Social Security from state income tax, while others tax it. A federal law would not change what your state requires.
The bill would also not affect Medicare premiums. Your Social Security income counts toward the calculation of whether you pay higher Medicare Part B and Part D premiums, and that would continue even if benefits were no longer taxed federally.
The bill's history and current status
Congress has introduced versions of the No Tax on Social Security Act multiple times over the past two decades, but none has passed into law. The most recent versions have been introduced in both the House and Senate, but they remain in committee without a vote scheduled.
Because the bill has not passed, you should not assume it will when you plan your retirement or file your taxes. Tax law changes only when a bill passes both chambers of Congress and is signed by the president. Until that happens, the current rules apply to your benefits.
If you want to track whether this bill moves forward, you can search for it by name on Congress.gov, which shows the current status of all federal legislation and allows you to see which committees are reviewing it.
Who would benefit most from this change
Retirees with combined income between the current thresholds would see the biggest immediate benefit — those are people whose Social Security is currently being taxed but who would owe nothing if the bill passes. This includes many people who have a pension, continue working part-time, or have investment income alongside their Social Security.
People with very low income would see little change, because their benefits are already not taxed. People with very high income would also see a smaller relative benefit, because they are already paying tax on 85 percent of their benefits and would simply stop doing so.
The bill would also reduce the administrative burden on the IRS and simplify tax filing for millions of people who currently have to calculate combined income and determine their taxable portion.
How to handle Social Security taxes while the bill is pending
Continue to file your taxes based on current law. If you receive Social Security and have other income, calculate your combined income and determine whether your benefits are taxable using the current thresholds. The IRS will expect you to report any taxable portion on your return.
If you are not sure whether your benefits are taxable, the Social Security Administration sends you a form SSA-1099 each January showing how much you received. You can use that figure along with your other income to calculate combined income, or you can work with a tax professional who can walk you through the calculation.
Paying tax on your benefits now does not mean you will owe it forever — if the bill passes, future years would be different. But for the current tax year and any year before the bill becomes law, you must follow the rules that are actually in effect.
State taxes on Social Security benefits
Thirty-seven states do not tax Social Security benefits at all, regardless of your income level. Thirteen states tax Social Security under certain conditions — usually when your income exceeds a threshold, or when you have other retirement income, or both.
The No Tax on Social Security Act would only affect federal taxation. If you live in a state that taxes Social Security, that state tax would continue even if the federal bill passes. You would need to check your state's tax rules separately and file a state return if required.
If you are considering moving in retirement, state tax treatment of Social Security is one factor worth researching, along with property taxes, sales taxes, and the cost of living in different areas.
Frequently Asked Questions
Does the No Tax on Social Security Bill apply to me right now?
No. The bill has not passed into law, so current tax rules still apply. You must calculate whether your benefits are taxable based on your combined income and the thresholds in effect today. Only if and when Congress passes the bill and the president signs it would the rules change.
If I am already paying tax on my Social Security, will I get a refund if the bill passes?
That would depend on how Congress writes the law. Some bills include retroactive provisions that refund taxes already paid, while others apply only to future years. You cannot know until the bill is finalized and passed. Do not count on a refund when planning your finances.
Would this bill affect my Medicare premiums?
Probably not. Medicare uses your income to calculate whether you pay higher Part B and Part D premiums, and that calculation would likely continue even if Social Security were no longer taxed federally. The bill would need to specifically address Medicare to change that.
Can I reduce my taxable Social Security benefits right now?
You can lower your combined income by reducing other income sources — delaying withdrawals from retirement accounts, timing investment sales, or adjusting when you claim a pension. A tax professional can help you model different scenarios, but you cannot change how much Social Security itself is taxed under current law.
What states already do not tax Social Security?
Thirty-seven states have no tax on Social Security benefits. The other thirteen states tax it under various conditions. You can find your state's specific rules on your state tax authority's website or by contacting them directly, since the rules vary widely.