The so-called “One Big Beautiful Act” does not make any change to the way Social Security benefits are taxed. Depending on the extent of your other income, up to 85% of your gross Social Security benefits (before any Medicare deduction) continue to be taxed as ordinary income on the Form 1040 (or 1040-SR).
What the legislation does is create a deduction of $6,000 for every taxpayer age 65 or older at year-end for 2025 to 2028. The deduction is per taxpayer, so if both spouses on a joint return are 65 or older they can deduct $12,000. This deduction is available whether or not you are collecting Social Security.
The amount of the deduction is reduced by 6% of the amount your Modified Adjusted Gross Income (MAGI) exceeds $75,000, or $150,000 if you are married and filing a joint return with your spouse. For this deduction MAGI is your Adjusted Gross Income plus any exclusion for foreign income or income from Puerto Rico, Guam, American Samoa, and the Northern Mariana Islands.
You can claim the deduction for overtime pay whether or not you itemize your deductions on Schedule A. The deduction is in addition to the extra Standard Deduction amount for senior taxpayers who do not itemize. For married individuals the deduction is only available if you file a joint return. This new deduction is not available on “Married Filing Separately” returns.
So, there is a tax on your Social Security benefits, calculated in the same manner as it has been in the past.
FYI, I oppose the current method of calculating taxable Social Security benefits. Social Security should be taxed in the same way as any other contributory pension.
TTFN
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