Broadcast Retirement Network’s Jeffrey Snyder discusses how you can use the senior tax deduction in 2026 with The Motley Fool’s Dan Caplinger.
Jeffrey Snyder, Broadcast Retirement Network
Joining me now is Dan Caplinger. He is a contributor to The Motley Fool.
Dan, always great to see you. Thanks for joining us on the program this morning. You bet.
Thanks for having me. And I’m really pleased to talk to you about a lot of different issues. But today we’re going to be focusing on this senior tax credit or tax deduction.
Can you set it up for us? What is this senior deduction? What should I be looking for as…
I’m not yet a senior, but I will be. What should I be looking for if I qualify?
Dan Caplinger, The Motley Fool
You bet. So it is a deduction rather than a credit. It will reduce your taxable income.
It is not a dollar for dollar credit that you get against your tax. But it can produce some tax savings. It applies to most folks who are 65 years old or older.
It’s up to $6,000 per person with both members of a married couple potentially being able to take it. So joint filers may be able to take up to $12,000 deduction if both spouses are 65 or older.
Jeffrey Snyder, Broadcast Retirement Network
So you just have to qualify by age. There’s not a… Or is there a threshold for certain levels of income?
Like, you know, they’re talking about capping social security. There’s other means testing that may be done with other benefits. So can somebody who’s just walking on the street of Charlotte, for example, take advantage of this?
Dan Caplinger, The Motley Fool
So there are some restrictions. Number one is that you have to have a social security number. And number two is that there are indeed income thresholds that apply.
If you are a single filer and you have adjusted gross income of $75,000 or below, you’re entitled to the full deduction. If you’re a joint filer, you double that number, $150,000. If your income’s at that level or less, then you get the full deduction.
Above that, it starts to phase down so that you would get less than the full $6,000 deduction. It goes away at $175,000 for singles, at $250,000 for joint filers. At that point, zero deduction.
In between those numbers, you get a partial deduction for part of the $6,000.
Jeffrey Snyder, Broadcast Retirement Network
So this seems like a no-brainer to me. Do you think… I know the reason why you and I are talking is because your colleague at The Motley Fool wrote a great piece on this, and I’ll put that in the description, of course.
People can check it out. But do you think people, just generally Americans, are aware of this? And number two, why wouldn’t I do this if I was age 65 or older?
Dan Caplinger, The Motley Fool
There’s absolutely no reason not to do it. If you qualify for it, then you should definitely take advantage of it. It can lead to hundreds or even thousands of dollars of tax savings by using it.
I think where the confusion comes in was the origin of this tax break. So this came about because the Trump administration was looking for ways to eliminate the taxation of Social Security benefits. Right now, under current law, for certain taxpayers, a portion of Social Security benefits, up to 85% of your benefits, can be included in your taxable income.
Based on what other income sources that you have. And so this senior tax deduction was set up as a way to try to reduce that tax burden for Social Security recipients. But the confusion comes in that the overlap in the people who qualify for this versus the people who are potentially taxed on their Social Security income, it’s not a perfect overlap.
There are people who take Social Security who are not yet age 65. They don’t get to take this deduction, but they may still be taxed on their Social Security income. Conversely, there’s people who are 65 or older.
They’ve chosen not to take Social Security yet. They still get the benefit of this deduction, even though they’re not getting any Social Security benefits on which to be taxed. So the intent, I think, was the creation of the confusion because this was initially billed as being connected to the tax on Social Security benefits, but it doesn’t perfectly match up with the people who are affected by that tax.
And it can be a benefit to people who weren’t benefited by that tax.
Jeffrey Snyder, Broadcast Retirement Network
So it sounds almost like a Rube Goldberg. Remember the game Mousetrap? I don’t know if you’re old enough to remember Mousetrap.
Dan Caplinger, The Motley Fool
I do. Yeah.
Jeffrey Snyder, Broadcast Retirement Network
It’s a lot of machination. I think that’s oftentimes with some of these benefits, it oftentimes is so hard for people to figure out. So let’s talk about it’s 2026 now.
People just filed their taxes, or at least maybe they filed an extension for October. How do I implement this? So what’s the best way to go about getting this into 2026?
And you may have a preparer. You may go to an Intuit or an online filer. But what’s the best way to kind of get myself situated to know whether I’m eligible, but also to put it into place?
Dan Caplinger, The Motley Fool
Tax software should do this automatically for you. Just about every tax professional is aware that this is on the books. And if you qualify, they’re going to go ahead and claim it on your behalf.
As far as if you’re doing your own taxes, long form, there are spots on the tax form. It’s actually a reasonably obvious thing to take. It’s just nice to know that it is there and to fill in the number, the appropriate number in the appropriate spot.
Yeah, this has been on the radar for folks for a while. It applied on 2025 tax returns. It is a temporary tax break.
It applies for 2025, 2026, 2027, and 2028, scheduled to go away in 2029. But we’ll see what happens. A lot of the time, these deductions become popular.
When the expiration date rolls around in 2028, you’re probably going to get some wrangling from folks saying, hey, don’t you want to keep this going for a little while longer? That often turns out to be the case.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, that’s a big voting block, seniors, especially when it comes to social security. They have fixed incomes. Dan, if I could ask you, and this is more of an opinion question, so feel free to answer or not.
Obviously, we have an aging America. There are many people that will be age 65 or older. When I look at this benefit, this, to me, seems like we’re scratching the surface.
But when you think of caregiving, aging in place, people living to 90, 95 because of all the medical discoveries and medications that we now have, it seems like the Congress and the president, whoever that may be today and in the future, they’re going to really be focused on helping seniors. Is that what you kind of take away from all this? This is just a start?
Dan Caplinger, The Motley Fool
I think there’s a lot of room to help an aging population, especially a politically strong and savvy generation of aging folks, to help them with the burdens of aging. The question is how best to do that. And you point out an interesting point.
Caregiving is a tough job. And it’s often up to the kids and grandkids of these seniors to figure it out on their own because it’s hard to get coverage. A lot of plans don’t really offer coverage for the long-term care needs that folks need.
It’s hard to get private insurance that covers it adequately. And so there’s room, I think, in the tax code for giving these younger folks incentives to provide the care that loved ones, that family members need. I think that may be a focus, sort of indirectly helping those folks.
As far as direct tax benefits for seniors, the fact is that once you’re retired, a lot of people, their income goes way down. The value of tax deductions and tax credits, unless they’re structured very carefully, often the value of that is diminished. In many ways, I think that a lot of the things that we’re seeing with Social Security right now are based on the fact that we have a larger number of people receiving Social Security and a relatively smaller number of working-age folks supporting the financial system that pays those Social Security benefits.
And so targeting that younger population to get them working, get them motivated, get them the help that their parents and grandparents need, that might be the best solution to make sure that the system keeps working the way that it has for really close to a century now.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, really, really important. I think this is something that we’re going to continue to talk about. Dan, really appreciate you joining the program.
And look, we look forward to bringing you back maybe each and every month. There’s so much out there to talk about. The Motley Fool, your publication, does a tremendous amount of work in not only saving and retirement, but investing.
Dan, great to see you. Thanks for joining us. And we look forward to having you back again very soon.
