Bill > HR2266

This bill, known as the RETIREES FIRST Act, proposes to modify how Social Security benefits are taxed by increasing the threshold amounts for including these benefits in a taxpayer's income. Specifically, the bill raises the base amount for determining taxable Social Security benefits to $34,000 for individual filers and $68,000 for joint returns, with a special provision that sets the base amount to zero for married individuals who file separately and live with their spouse. The bill also introduces an inflation adjustment mechanism that will automatically increase these threshold amounts annually starting in 2026 based on the cost-of-living adjustment. When calculating taxable Social Security benefits, 85% of the benefits will be included in gross income, with the exact amount determined by a formula that considers the taxpayer's base amount. To ensure that the Social Security Trust Funds are not financially harmed by these changes, the bill includes provisions to appropriate funds from the Treasury to offset any reduction in transfers. Additionally, the bill includes a mechanism to reallocate non-security discretionary appropriations to support this retiree tax relief, with rescissions from regular appropriation acts starting in fiscal year 2027, and requires the Office of Management and Budget to report annually on these rescissions. The changes would take effect for taxable years beginning after December 31, 2025.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/2266/all-info