Congress moves to eliminate federal tax on Social Security benefits
H.R. 904 — No Tax on Social Security · Filed by Jefferson Van Drew (R-NJ) · 2 cosponsors · Introduced Jan 31, 2025 · Referred to committee
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What it does
This bill repeals the federal income tax on Social Security benefits, effective immediately upon enactment. To offset the lost tax revenue that would normally flow into Social Security trust funds, the bill appropriates general Treasury funds to replace those lost transfers dollar-for-dollar, keeping the trust funds whole.
Why we flagged it
The bill's sole operative mechanism is the repeal of federal income taxation on Social Security benefits, coupled with a direct appropriation to offset the revenue loss. It is a straightforward tax cut for a specific population (Social Security recipients) funded by general Treasury revenue.
What the text implies
- The bill does not reduce Social Security benefits themselves, but it does reduce federal revenue available for other programs unless Congress raises taxes or cuts spending elsewhere.
- The appropriation language ('out of any money in the Treasury not otherwise appropriated') creates a permanent, open-ended fiscal obligation that grows with the Social Security population and benefit levels.
The full analysis lists 3 implications of this text.
Who stands to gain
Social Security beneficiaries (retirees, disabled workers, survivors)