Seniors May Soon Qualify for a Bigger Income Tax Deduction

A bill moving through Congress would give taxpayers aged 65 and older a bigger standard deduction on their federal return.

This so-called “senior bonus,” a provision of the One Big Beautiful Bill Act passed by the House in late May, aims to ease financial pressures on retirees, especially those with moderate incomes.

What the proposed tax break offers

The proposal would increase the standard deduction by $4,000 per senior. This bonus amount would be available starting with the 2025 tax year (the one for which returns are due by April 2026) and remain in effect through the 2028 tax year.

This change would directly benefit many retirees, since most already take the standard deduction — a fixed dollar amount that reduces taxable income — rather than itemizing their deductions.

The proposal also calls for a similar tax break for seniors who itemize, though, so they too stand to benefit.

Eligibility requirements

To qualify for the full value of the proposed enhanced deduction, you’d need to meet the following criteria:

• Be 65 or older
• Include your Social Security number on your tax return
• Have an adjusted gross income not exceeding $75,000 for single filers or $150,000 for married couples filing jointly

The proposal includes a phaseout provision for seniors with incomes that exceed these thresholds. That means they would not qualify for the full value of the enhanced deduction or would be ineligible for it entirely.

How it works with existing deductions

This new tax break would increase the enhanced deduction that is already available to seniors.

For the 2025 tax year, the standard deduction is $15,000 for single filers under age 65 and $30,000 for married couples who file a joint tax return and are both under 65.

Under current tax law, those aged 65 or older receive an additional standard deduction for 2025 — $2,000 per single person or $1,600 per married person.

The proposed change would increase those amounts by $4,000 per senior.

Potential impact for retirees

Let’s take for example two married seniors who file jointly, earn less than $150,000 and are in the 22% tax bracket.

Under current law, their standard deduction for 2025 is $33,200 ($30,000 + $1,600 + $1,600).

Under the proposed law, it would increase to $41,200 ($30,000 + $5,600 + $5,600).

That $8,000 boost to the couple’s standard deduction would lower their taxable income by $8,000, which could in turn lower their tax bill by $1,760 (22% of $8,000).

The One Big Beautiful Bill Act is expected to undergo revisions before it can become law, however. So, the final version may be significantly different from the version the House passed in May. That could include changes to proposed increased deduction for seniors.