ALBANY — Middle-income New Yorkers aged 65 and older are likely to see a tax break next year from the sprawling federal tax and spending legislation, but tax analysts say Social Security income won’t be tax free, contrary to Trump campaign promises.

The bill, signed into law by President Donald Trump on July 4, includes a $6,000 tax deduction for seniors starting in the 2025 tax year and expiring by 2029. The deduction phases out for higher income levels, so single filers earning $175,000 or more and married filers earning $250,000 or more will not benefit.

"The people who benefit the most from this are people in the middle," said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, a nonpartisan think tank based in Washington, D.C. Those earning between $80,000 and $130,000 will see the largest tax cut, roughly $1,110 on average, according to the Tax Policy Center.

In New York state, 3.7 million residents, or about one in five, receive social security benefits, according to AARP.

There has been confusion, however, over what the legislation, known as the "One Big Beautiful Bill Act" will do for seniors.

Trump promised to eliminate the tax on Social Security benefits in his 2024 campaign, but tax analysts say that’s not what this bill does. Instead, it reduces income taxes for seniors on all incomes including Social Security, according to tax analysts.

"There’s some miscommunication," said Joseph Perry, a national tax leader in the Melville office of CBIZ, a national adviser of tax, accounting, advisory, benefits, insurance, and technology services.

The bill will mean fewer seniors have to pay taxes, particularly when coupled with an increase in the standard deduction of $750 for single filers and $1,500 for married couples, Perry told Newsday.

At the same time, tax and policy analysts warn that the senior deduction, along with other provisions in the bill that reduced tax revenue, will accelerate the insolvency of Social Security, potentially requiring reduced benefits for everyone in the future.

And senior advocacy groups say other provisions in the omnibus spending bill including changes and cuts to Medicaid and the Supplemental Nutrition Assistance Program, or SNAP, could offset the benefit of the deduction.

"Overall it’s a lousy bill. If you throw in a $6,000 sweetener, that doesn’t get rid of the pain that’s caused to seniors," said Barry A. Kaufmann, president of the New York State Alliance for Retired Americans, a senior advocacy group with 670,000 members representing retirees across the state. Kauffmann also noted that the deduction ends in 2028, adding, "This is not a forever thing. It’s very limited in scope."

Technically, because Congress passed the budget in what's known as a "reconciliation," to expedite the bill’s passage, it cannot make changes to the Social Security Program.

The budget legislation instead created the $6,000 senior deduction, which for married couples would mean up to $12,000 in deductions if both individuals are aged 65 or older.

The deduction is in addition to an extra deduction seniors already have, which for the 2025 tax year is $2,000 for single filers and $1,600 per qualifying individual for married couples or $3,200 total if both qualify.

The standard deduction was increased to $15,750 for single filers in 2025 and by $1,500 to $31,500 for married couples filing jointly. 

So, a senior married couple filing jointly, taking advantage of the standard deduction and both senior deductions, wouldn't owe taxes on their first $46,700 of income. 

A July 3 release from the Social Security Administration created some confusion, saying the legislation "eliminates federal income taxes on Social Security benefits for most beneficiaries," and additionally provides the advanced deduction. It was later updated to say the measure eliminates federal income taxes on Social Security by providing the enhanced deduction.

The administration did not return a request for comment about the changes.

Low-income taxpayers — single filers earning less than $25,000 and married filers earning less than $32,000 — already are exempt from paying taxes on social security benefits.

About 40% of people who get Social Security have to pay income taxes on their benefits, with high earners paying more, according to the Social Security Administration.

The Social Security Administration estimates that nearly 90% of beneficiaries will no longer pay federal income taxes on their benefits as a result of the additional deduction.

But with low-income taxpayers already not paying and the income threshold on the deduction, the Tax Policy Center estimates that less than half of older adults would benefit, with most seeing their income taxes on social security benefits reduced, not eliminated.

If retirees are collecting a pension or still working, a portion of their social security would be taxable, Perry said. An average Long Islander is probably going to be exempt or very little of their Social Security is going to be taxed, he said.

Overall the credit "really helps those people who really need the money," he said, adding "President Donald Trump can say he kept his promise for most people."

With more seniors paying less income taxes on their benefits it means less revenue going toward Social Security’s two trust funds, policy experts and tax analysts said. Taxes on benefits make up a very small portion of the program’s total revenue, but the trust funds already are projected to run short if Congress doesn’t act, according to AARP. 

Changes made in the Big, Beautiful Bill including an extension of 2017 tax cuts and the $6,000 senior deduction would reduce taxation of Social Security benefits by about $30 billion annually, and accelerate the funds insolvency to 2032, according to an analysis from the nonpartisan nonprofit Committee for a Responsible Federal Budget. If this occurs, beneficiaries could see benefits cut by 24%, according to the group.

"It will make people earning Social Security worse off," Gleckman said, "even if they get a break from this."