Weekly Column: Tax Relief For Idaho Seniors

Seniors enrich our communities—they support families, share wisdom and experience, contribute to our ever-changing economy with people working longer and in varied jobs, and much more. But many of Idaho’s seniors are on fixed incomes or working long after they thought they would have retired, which is why Republicans took action to make life more affordable for them through new tax relief in the Working Families Tax Cuts.

The Working Families Tax Cuts created a new deduction of up to $6,000 for millions of low- and middle-income seniors, including many of the 18 percent of Idahoans aged 65 and older. Beginning this year, those individuals are eligible to claim this new deduction in addition to the standard deduction, which was also increased, and the existing $2,000 deduction for seniors ($3,200 for married couples).

The maximum annual deduction is $6,000 per qualified individual, or $12,000 for a married couple if both spouses are at least 65. The deduction begins phasing out for taxpayers with modified adjusted gross incomes over $75,000 ($150,000 for joint filers). The deduction is available for taxpayers regardless of whether they itemize or claim the standard deduction. That means more money in seniors’ pockets to cover basic necessities like food and health care costs. It will also give our nation’s seniors more financial security, which they need and deserve in their retirement years.

The following are two examples to illustrate how the new deduction works for eligible taxpayers:

• Alice, age 70 and unmarried, had a modified adjusted gross income of $50,000 in 2025. Alice will be eligible for the full amount of the $6,000 new senior deduction for tax year 2025.

• Tom, age 68, and Pam, age 67, a married couple who file jointly, had a modified adjusted gross income of $100,000 in 2025. They will be eligible for the full amount of the $12,000 new senior deduction for tax year 2025.

At a recent U.S. Senate Finance Committee hearing I chaired, Internal Revenue Service Chief Executive Officer Frank Bisignano reported that thanks to the Working Families Tax Cuts, “we are seeing historically high refunds and adoption of the President’s key tax initiatives at levels that surpassed our expectations,” with seniors receiving the largest dollar benefit this filing season. In fact, more than 34 million seniors are benefiting, with an average deduction of over $7,500.

According to AARP, the new deduction could boost refunds for millions of older taxpayers by an average of about $670, with some people seeing far more. Nancy LeaMond, AARP’s chief advocacy and engagement officer, said, “Sometimes in the world we live in, $600 doesn't sound like a lot, but we can tell you, based on conversations with our members, that it is a very, very significant help to them."

The Council of Economic Advisors estimates about 88 percent of seniors receiving Social Security benefits will pay no federal income tax on their benefits due to the Working Families Tax Cuts. That helps a fixed income to stretch much further, allowing Idahoans to retire after a lifetime of hard work or to invest in their children and grandchildren after meeting their own expenses. The Association of Mature American Citizens summed it up best: “By increasing deductions, simplifying the process, and ensuring older Americans keep more of what they’ve earned, this law represents a rare and welcome victory for retirees and working seniors alike.”

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