Honestly, the most frustrating thing about retirement planning is the "double dip." You pay into the system for 40 years, and then, when you finally get your check, the IRS shows up at your door asking for a cut. It feels wrong. It's why everyone keeps asking the same big question: when will social security stop being taxed?
If you’re looking for a simple date—like "January 1st, 2027"—I have to be the bearer of some mixed news. As of right now, in early 2026, there is no expiration date on the books for federal Social Security taxes. But things are shifting. Laws are being introduced that could actually kill this tax for good, and a few states just pulled the plug on their own versions of it.
The 2026 Reality Check
Basically, the federal government still uses the same math they’ve used since 1984. Back then, only about 10% of retirees paid taxes on their benefits. Today? It’s more like 56% because those income thresholds never moved for inflation.
You’re probably paying if your "combined income" (your AGI + nontaxable interest + half your Social Security) is over $25,000 as a single person or $32,000 for a couple.
Those numbers are tiny. In 2026, $32,000 doesn't get you very far. It’s kinda wild that the government hasn't adjusted these "provisional income" limits in over four decades.
The "You Earned It, You Keep It" Act: A Real Shot?
There is some actual movement in DC. Representative Angie Craig and Senator Ruben Gallego have been pushing a bill called the You Earned It, You Keep It Act.
This isn't just a "tweak" to the numbers. It’s a full-on repeal. If this thing passes, federal taxes on Social Security would end entirely. The most recent version of the bill aims for a 2026 start date, which would mean the first "tax-free" year would be the returns you file in early 2027.
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How would they pay for it? They’d basically tax the "ultra-wealthy" more by raising the Social Security wage cap. Right now, in 2026, you only pay Social Security tax on the first $184,500 you earn. The bill wants to slap that tax on everyone earning over $250,000.
It’s a "tax the rich to give retirees a break" strategy. Whether it can actually get through a divided Congress is the million-dollar question. Honestly, it's a long shot, but it has more momentum now than we've seen in years.
States are moving faster than the Fed
While the federal government drags its feet, the states are actually doing something.
West Virginia is the big winner this year. They finally finished their multi-year phase-out. Starting in 2026, Social Security benefits are fully exempt from state income tax in West Virginia.
If you're living in one of these nine states, you're still getting hit at the state level, though most have their own weird exemptions:
- Colorado (actually pretty generous for 65+)
- Connecticut
- Minnesota
- Montana
- New Mexico
- Rhode Island
- Utah
- Vermont
- Virginia (well, technically Virginia doesn't tax it, but they have some specific filing rules)
Actually, 41 states now don't tax your benefits at all. If you live in Florida, Texas, or Tennessee, you’re already in the "no tax" zone.
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The "One Big Beautiful Bill" Act and the $6,000 Deduction
You might have heard about a "Senior Deduction" floating around. This came out of the 2025 tax legislation. It doesn't technically stop Social Security from being taxed, but it helps.
For the 2025 through 2028 tax years, there's a temporary deduction of up to $6,000 for people aged 65 and older ($12,000 for couples).
It’s a "below-the-line" deduction. This is a bit nerdy, but it's important: because it's taken after your Adjusted Gross Income (AGI) is calculated, it doesn't actually change the "combined income" formula that determines if your Social Security is taxable. It just lowers your overall tax bill at the very end.
Better than nothing? Sure. But it's not the same as the tax going away.
Why it probably won't stop soon
The big elephant in the room is the Social Security Trust Fund.
The money you pay in Social Security taxes doesn't just go into a black hole; it goes right back into the trust funds (OASI and DI). If the government stopped taxing benefits tomorrow, the Social Security program would run out of money even faster than currently projected.
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We're looking at a potential "cliff" in the early 2030s where benefits might have to be cut if nothing changes. Taking away the tax revenue makes that cliff much steeper.
That’s why most experts think when will social security stop being taxed might be "never" for the federal government—unless they find a massive new way to fund the program.
What you can actually do right now
Since you can't wait for Congress to get its act together, you've gotta be a bit strategic.
- Watch your Roth conversions. If you move too much money from a traditional IRA to a Roth, your AGI spikes. That spike can suddenly make 85% of your Social Security taxable. It's the "tax torpedo" and it's nasty.
- Move? Maybe. If you’re in a state like Minnesota or Vermont and the tax bill is killing you, moving across a state line could save you thousands.
- Required Minimum Distributions (RMDs). Once you hit RMD age, that forced income can push you over the Social Security tax thresholds. Look into Qualified Charitable Distributions (QCDs) to send that money to a non-profit instead of your bank account; it keeps it off your tax return entirely.
The "You Earned It, You Keep It" Act is the only thing on the horizon that would truly end the tax. Keep an eye on its progress through the House Ways and Means Committee this year.
Next Steps for You
- Calculate your "combined income" (AGI + nontaxable interest + 50% of your benefits) to see how close you are to the $25k/$32k thresholds.
- Check if your state is one of the nine that still taxes benefits and look for "age-based" exemptions that might have started in 2026.
- If you're over 65, make sure you or your tax pro applies the new $6,000 Senior Deduction on your next return.