President Donald Trump’s “Big Beautiful Bill” is headed back to the House for reconciliation after passing the Senate with a tiebreaking vote from Vice President JD Vance.
The 1,116-page multitrillion-dollar bill contains some key changes for older Americans, including a senior bonus tax deduction that would offset taxes on Social Security. But the bill also contains cuts to several important social programs that could impact lower-income seniors.
The bill passed by the Senate on Tuesday now has to be approved again by the House before being signed into law by President Trump, who has set a deadline of July 4. Here’s a list of the bill’s potential benefits and pitfalls related to seniors.
Benefits to seniors
The Senate version of the bill would give seniors an additional deduction of up to $6,000 per eligible taxpayer, up from $4,000 in the House version. This amount is a temporary bonus deduction that would be in addition to other deductions they claim on federal taxes of Social Security.
Seniors are eligible if their modified adjusted gross income is up to $75,000 for singles or $150,000 for married couples filing jointly. For seniors making more than these amounts, the deduction would phase out at a 6% rate in the Senate bill and a 4% rate in the House bill.
In a letter to Senate leaders on Sunday, AARP executive vice president Nancy LeaMond wrote: “This increase delivers tax relief at a time when many older Americans are living on fixed incomes while facing rising costs.” AARP also noted that “the income thresholds for owing federal taxes on Social Security, spousal benefits, survivor benefits, disability insurance and retirement benefits have not changed in 40 years.”
The bill would also benefit caregivers of loved ones by expanding the employer tax credit for companies that offer paid family leave and medical leave. This would provide “important support to employers whose workers are juggling jobs and caregiving responsibilities,” LeaMond wrote.
Specific to housing, the Senate bill would increase investment in affordable housing through the Low-Income Housing Tax Credit, providing incentives for developing and rehabilitating housing for those on a fixed income. The expanded tax credit could spur building in rural areas and American Indian communities.
What seniors would lose
The complicated bill also includes cuts that would cost seniors — particularly in regard to rollbacks to Medicaid, which could lead to 11.8 million fewer Americans being enrolled in health insurance by 2034, according to estimates from the Congressional Budget Office (CBO).
Rural seniors are most at risk from the proposed cuts, since Medicaid covers more than 16 million people in rural communities. And Medicaid cuts could disproportionally affect the rural hospitals that many seniors rely on, according to the American Hospital Association.
The Senate bill’s Medicaid work requirements could also affect 9 million Americans ages 50 to 64, according to an analysis by the AARP Public Policy Institute (PPI) — not because they aren’t working, but because of the cost of compliance.
The bill also adds significantly to the national debt, with the Committee for a Responsible Federal Budget estimating it will add $3.9 trillion to the debt over a decade. That cost could drive up interest rates for consumers of all ages.
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