“A bill to amend the Internal Revenue Code of 1986 to increase the threshold amounts for inclusion of Social Security benefits in income.”
No CRS summary available for this bill.
This section modifies the formula for including Social Security benefits in gross income to the lesser of 85% of benefits received or 85% of provisional income exceeding a base amount (i.e., modified adjusted gross income plus tax-exempt interest plus one-half of Social Security benefits), eliminating the current tiered structure under which up to 50% of benefits is included if provisional income exceeds $25,000 ($32,000 for joint returns) and up to 85% if it exceeds $34,000 ($44,000 for joint returns). It sets the base amount at $34,000 ($68,000 for joint returns; zero for married filing separately not living apart) and provides for annual inflation adjustments after 2025 based on the cost-of-living adjustment under IRC §1(f)(3) using calendar year 2024 as the base period (with rounding to the nearest $1,000). It also appropriates amounts to the Social Security and Railroad Retirement trust funds equal to any reduction in transfers attributable to these changes. The amendments apply to taxable years beginning after December 31, 2025.
This section requires, for FY2027 and each fiscal year thereafter, a pro rata rescission—effective the day after appropriations are made available through September 30 for the entire federal government—of non-security discretionary budget authority provided by regular appropriation acts (as defined in subsection (b), i.e., annual acts under 1 U.S.C. 105 or equivalents including continuing resolutions) in an amount equal to the total cost (as determined by the Treasury Secretary under subsection (d)) of reduced transfers to Social Security Act or Railroad Retirement Act funds due to amendments made by section 2(b). The rescission excludes discretionary appropriations in the security category (as defined in section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985). (Thus, it offsets the cost of retiree tax relief in section 2 by across-the-board cuts to non-security discretionary spending.) Additionally, the section directs the Office of Management and Budget to publish an annual report, beginning January 1, 2028, detailing rescissions for the prior fiscal year.