Expiring Tax Deductions May Increase Social Security Tax Liabilities
Social Security recipients face higher federal tax liabilities starting in 2028 as a cost-of-living adjustment coincides with the expiration of a senior tax deduction.
Social Security recipients may see an increase in federal tax liabilities beginning in 2028. This shift results from a projected 3.6% cost-of-living adjustment (COLA) for 2027, which increases monthly benefits but also raises the provisional income used to determine taxability.
The Social Security Administration is implementing the COLA, which could push more retirees over the static tax thresholds of $25,000 for single filers and $32,000 for married couples. These thresholds have not been adjusted for inflation since they were established by the United States Congress.
While many seniors currently mitigate these taxes using a $6,000 deduction provided by the One Big Beautiful Bill Act, that specific deduction is scheduled to expire in 2028. The simultaneous effect of higher benefit payments and the loss of the senior deduction is expected to result in more retirees owing taxes on their Social Security checks.
