New Senior Deduction: Added Relief for Taxpayers Age 65 and Older
November 10, 2025 Author: Compass Pointe CPAs
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several new tax provisions — including a significant benefit for older taxpayers. Beginning with the 2025 tax year, individuals age 65 and older can claim an additional $6,000 deduction from taxable income. Married couples filing jointly, where both spouses are 65 or older, can claim $12,000.
This new deduction is available whether you claim the standard or itemized deduction and stacks on top of existing age-based add-ons (currently $2,000 for single filers and $1,600 per spouse for married filers). The provision is currently set to remain in effect through 2028, unless extended by Congress.
Eligibility and Income Limits
To qualify, you must:
- Have a valid Social Security number
- Be 65 or older by the end of the tax year
- File as single, head of household (HOH), or married filing jointly (not available for married filing separately)
Phaseout thresholds:
- Full deduction for single / HOH filers with Modified Adjusted Gross Income (MAGI) up to $75,000
- Full deduction for joint filers with MAGI up to $150,000
- Deduction phases out by 6% of income above these limits
- Fully phased out at $175,000 MAGI (single) and $250,000 MAGI (joint)
Key Points to Know
- Seniors whose taxable income is already below the standard deduction may not see a direct change in tax liability.
- The deduction does not directly affect the taxation of Social Security benefits, though it may help reduce overall taxable income.
Final Thoughts
This new senior deduction offers a welcome tax break for retirees and older taxpayers. While it may not affect everyone equally, those with moderate incomes stand to benefit most. If you or your spouse will be 65 or older in 2025, talk with your tax advisor about how this new deduction could reduce your taxable income in the coming years.
