An excellent question, but the answer is more complex than it may seem on the surface. 

Income tax on Social Security benefits is a significant part of Social Security’s annual revenue (over $50 billion in 2023) and eliminating it would hasten depletion of the Social Security Trust Fund reserves. Depletion of the reserves (currently forecast for 2034) would mean a 21% cut in everyone’s Social Security benefit because, by law, SS can only pay out what it receives from payroll taxes, interest on investments, and income tax on benefits. So, to eliminate that tax income on SS benefits would require other measures to offset the loss of revenue; otherwise, the Trust Fund reserves will be depleted earlier than now predicted, and a cut in everyone’s monthly Social Security benefit will occur. 

Our AMAC Foundation take on this is that broader reform of the Social Security program is urgently needed to prevent a mandatory cut in everyone’s benefits if the Trust Funds are depleted in 2034.  And that means that eliminating income tax on benefits will likely be tied to broader Social Security program reform.  It is fairly well reported that the so-called “big, beautiful bill” currently making its way through Congress does not include eliminating income tax on SS benefits (but does include some tax relief – a $4,000 increase in the standard deduction for seniors, and no tax on tips and overtime pay).  We believe that the reason “eliminating income tax on SS benefits” was not included in the current bill is because Congress needs more time to develop a way to offset the loss of SS income tax revenue, and that is a much more complex problem to solve. Nevertheless, President Trump has an admirable record of fulfilling his campaign promises, so we expect that the issue is still very much active, Congress is just seeking a viable way to accomplish it.

Thus, we expect that eliminating income tax on Social Security benefits will eventually happen as part of a broader reform of the Social Security program, but we have no way of predicting when that might be. In any case, rest assured that the AMAC Foundation is very carefully monitoring developments in Washington, D.C. and we will quickly inform our membership of any progress on this important piece of Social Security’s future.  We are well aware of the financial benefits the measure will provide to our senior citizen community. And, for the record, the AMAC Foundation has, for many years, advocated for elimination of income tax on Social Security benefits and will continue to do so.