Social Security Tax Repeal Bill: Millions of Americans receive Social Security benefits, but some beneficiaries still owe federal income tax on part of those benefits. A proposed bill in Congress would eliminate that federal tax entirely. The You Earned It, You Keep It Act, introduced as H.R. 2909 in the House and S. 2716 in the Senate, would repeal the federal income-tax treatment of Social Security benefits. However, the proposal has not become law, and Social Security benefits remain taxable under current federal rules.
As of September 2026, both versions remain in committee and have not received a committee vote or floor vote. The Senate bill was introduced by Sen. Ruben Gallego of Arizona, while Rep. Angie Craig of Minnesota introduced the House version.
Social Security Tax Repeal Bill at a Glance
| Key Detail | Current Information |
|---|---|
| Bill name | You Earned It, You Keep It Act |
| House bill | H.R. 2909 |
| Senate bill | S. 2716 |
| House sponsor | Rep. Angie Craig (D-MN) |
| Senate sponsor | Sen. Ruben Gallego (D-AZ) |
| House introduction | April 14, 2025 |
| Senate introduction | September 4, 2025 |
| House status | Referred to Ways and Means and Energy and Commerce |
| Senate status | Referred to Senate Finance Committee |
| Current law | Social Security benefits can still be federally taxable |
| Would the bill eliminate the tax? | Yes, if enacted |
| Is the bill law? | No |
The official government record shows no committee or floor vote for either bill.
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What Would the You Earned It, You Keep It Act Do?
The proposal would make two major changes.
1. It would eliminate federal income tax on Social Security benefits
Under current law, Social Security benefits can be included in taxable income when a beneficiary’s combined income exceeds certain thresholds. The IRS generally calculates this using adjusted gross income, tax-exempt interest and one-half of Social Security benefits.
For 2025 tax returns, the basic thresholds are:
- $25,000 for single filers and certain other individual filers
- $32,000 for married couples filing jointly
- Up to 50% of benefits can become taxable above the first threshold range.
- Up to 85% of benefits can be taxable at higher income levels.
These thresholds have not been indexed for inflation.
The proposed legislation would remove Social Security benefits from the federal income-tax calculation rather than simply raising those thresholds.
2. It would change Social Security payroll taxes for higher earners
The proposal would change how Social Security payroll taxes apply to earnings above the annual taxable maximum. For 2026, the Social Security taxable maximum is $184,500. Employees and employers each pay a 6.2% Social Security tax, while self-employed workers generally pay 12.4%. Under the proposed legislation, Social Security payroll-tax rules would be modified for earnings above $250,000. The bill also contains provisions affecting how those earnings are reflected in future benefit calculations.
This is important because the proposal is not simply a tax cut with no financing mechanism. Its sponsors argue that additional Social Security payroll-tax revenue from higher earners would help replace revenue lost by eliminating the federal tax on benefits.
Social Security Taxes Have Not Been Eliminated
One of the most important points for retirees is that nothing has changed under current federal law simply because these bills have been introduced. If you receive Social Security and have other income, you may still owe federal income tax on part of your benefits. The Social Security Administration confirms that up to 85% of benefits may be subject to federal income tax depending on income and filing status. Therefore, retirees should not assume that their Social Security checks are currently tax-free.
What About the New $6,000 Senior Deduction?
A separate tax change is already in effect. The One Big Beautiful Bill created an additional deduction of up to $6,000 per eligible taxpayer age 65 or older for tax years 2025 through 2028. A married couple in which both spouses qualify may receive up to $12,000 in additional deductions.
The deduction begins phasing out when modified adjusted gross income exceeds:
- $75,000 for individual filers
- $150,000 for married couples filing jointly
The deduction is available to eligible taxpayers who itemize as well as those who claim the standard deduction. This deduction can reduce a senior’s overall federal income-tax bill, but it does not repeal the Social Security benefit-tax rules. That distinction is important. The $6,000 deduction and the proposed You Earned It, You Keep It Act are two different policies.
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What Is the Current Social Security Tax Rule?
Under current law, Social Security benefits are not automatically taxable for everyone. For example, the IRS says that for 2025, a single taxpayer generally begins entering the Social Security tax calculation when combined income exceeds $25,000. For married couples filing jointly, the corresponding base amount is $32,000. At higher income levels, as much as 85% of Social Security benefits can be included in taxable income.
The thresholds are:
| Filing status | Base threshold | Higher threshold |
|---|---|---|
| Single | $25,000 | $34,000 |
| Married filing jointly | $32,000 | $44,000 |
These figures are current-law Social Security tax thresholds, not the income limits for the new $6,000 senior deduction.
Why Does the Proposal Matter for Social Security’s Finances?
Social Security’s finances are already under significant pressure. The 2026 Social Security Trustees Report projects that the combined Old-Age and Survivors Insurance and Disability Insurance trust funds will be depleted in 2034 under the Trustees’ intermediate assumptions. At that point, continuing program income would be enough to pay approximately 83% of scheduled benefits if Congress takes no action before then.
The OASI trust fund alone is projected to become depleted in the fourth quarter of 2032, with approximately 78% of scheduled OASI benefits payable at that point. That makes the financing provisions of any proposal to eliminate Social Security benefit taxation especially important.
Would the Bill Improve Social Security’s Solvency?
The bill’s sponsors argue that extending Social Security payroll taxes to higher earnings would offset the revenue lost by eliminating federal income taxes on benefits. Sen. Gallego’s office has said the proposal would allow Social Security to continue paying full scheduled benefits through 2058, compared with the current 2034 projection.
However, that is a projection associated with the proposed legislation—not a change to the official current-law forecast. The 2026 Trustees Report still projects combined trust-fund depletion in 2034 under current law. In other words, the 2058 figure should not be presented as the current Social Security solvency date. It represents the sponsors’ estimate of what could happen if the proposal became law as designed.
Where Does the Bill Stand in Congress?
The House version, H.R. 2909, was introduced on April 14, 2025. It was referred to the House Committee on Ways and Means and, in addition, the Energy and Commerce Committee. The official U.S. Government Publishing Office record lists no subsequent House action.
The Senate version, S. 2716, was introduced by Sen. Ruben Gallego on September 4, 2025. It was read twice and referred to the Senate Finance Committee. Sen. Gallego’s current legislative record continues to list that referral as the latest action. As of September 2026, neither bill has become law. There is also no current federal rule that makes Social Security benefits automatically tax-free because of these proposals.
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What Should Social Security Recipients Do Now?
For now, retirees should plan their federal taxes under current law, not under the proposed legislation. If you receive Social Security and also have income from pensions, retirement accounts, wages, investments or other sources, that income can affect whether your benefits are taxable. Eligible taxpayers age 65 and older should also determine whether they qualify for the new senior deduction for 2025–2028.
If you are making estimated tax payments or requesting federal tax withholding from Social Security, do not change your strategy solely because H.R. 2909 or S. 2716 has been introduced. Any repeal would require Congress to pass legislation and the president to sign it into law.
What Happens If the Bill Passes?
If a version of the You Earned It, You Keep It Act eventually becomes law, the federal income-tax treatment of Social Security benefits would change substantially. Beneficiaries would no longer include Social Security benefits in federal gross income under the proposed repeal. At the same time, higher-earning workers could face additional Social Security payroll-tax obligations under the bill’s proposed changes.
The exact effect on an individual taxpayer would depend on the final legislation enacted by Congress. A bill can be amended during the legislative process, so the introduced version should not be treated as a final tax rule.
Main Points of Social Security Tax Repeal Bill Law 2026
The proposed You Earned It, You Keep It Act would eliminate federal income taxes on Social Security benefits, but it is not law in 2026. The House version, H.R. 2909, and Senate version, S. 2716, remain in committee. Current federal rules still allow up to 85% of Social Security benefits to be included in taxable income for beneficiaries whose income exceeds the applicable thresholds.
Meanwhile, eligible Americans age 65 and older may already qualify for the separate $6,000 enhanced senior deduction, available for tax years 2025 through 2028. The most important takeaway for retirees is simple: there is no federal Social Security tax repeal yet. Plan using the rules currently in effect unless and until Congress passes a new law.
FAQ’s about Social Security tax repeal bill law 2026
Is the Social Security tax repeal bill law in 2026?
No. The You Earned It, You Keep It Act remains proposed legislation. H.R. 2909 and S. 2716 have been referred to congressional committees but have not become law.
Will Social Security benefits be tax-free in 2026?
No. Current federal law still allows part of Social Security benefits to be taxable depending on a taxpayer’s income and filing status. Up to 85% of benefits can be included in taxable income.
What is the $6,000 senior deduction?
Eligible taxpayers age 65 and older can claim an additional deduction of up to $6,000 for tax years 2025 through 2028. Married couples in which both spouses qualify may claim up to $12,000. The deduction phases out above specified income levels.
What income makes Social Security taxable?
Under current rules, the base combined-income thresholds are $25,000 for many individual filers and $32,000 for married couples filing jointly. Higher income can result in up to 85% of benefits being included in taxable income.
When could Social Security taxes actually be eliminated?
There is currently no scheduled date for elimination. Congress would need to pass legislation and the president would need to sign it before the proposed repeal could take effect.
Is Social Security running out of money?
The 2026 Trustees Report projects that the combined Social Security trust funds would be depleted in 2034 under current law. At that point, projected continuing income would cover about 83% of scheduled benefits.
Should retirees stop paying taxes on Social Security because of the proposed bill?
No. Until legislation is enacted, taxpayers should continue following the current IRS rules for Social Security benefits and federal income taxes.
