Social Security will send your income statement soon. What it means for taxes
Social Security beneficiaries may get good or bad news when they receive Form 1099, which shows the amount of benefits earned in 2025 and their tax liabilities when they file taxes in 2026.
Two laws passed in 2025, the Big Beautiful Bill and the Social Security Fairness Act, affect the amount retirees will owe the Internal Revenue Service. Many will owe nothing, or even get a refund, thanks to the tax deductions included in the bill.
But other retirees will face a higher tax burden because their Social Security benefits increased and some received lump-sum payments that are taxable.
How the One Big Beautiful Bill changes your taxes
Form 1099 and its equivalent for retired non-U.S. citizens, Form 1042-S, will be available on the Social Security Administration website starting Dec. 25. The agency will mail them from Dec. 26 through the end of January.
You can download these forms from your personal Social Security account, MySocialSecurity, www.ssa.gov/myaccount/.
The One Big Beautiful Bill, passed in July, includes a tax deduction of $6,000 or a bonus for people over 65, which applies to taxpayers with an adjusted gross income of $75,000 or less in retirement. For couples, the full deduction applies to those with incomes of $150,000 or less.
The deduction phases out for incomes above those thresholds and is eliminated entirely for individuals with incomes of $175,000 and married couples with incomes of $250,000.
This bonus is in addition to another deduction available for those over 65: $2,000 for single filers and $3,200 for married filers.
Both deductions can be used whether the taxpayer itemizes or takes the standard deduction, which in 2025 is $15,750 for single filers and $31,500 for married couples filing jointly.
If all these deductions are used, a taxpayer over 65 will not owe federal income tax on their first $23,750 of income. The same applies to married seniors up to $46,700 of income.
Some retirees in this situation would not owe any federal tax. Others may even receive larger refunds. Because the new law took effect mid-2025, they may have overpaid taxes that the IRS will refund when they file.
Social Security Fairness Act may raise taxable income
The Social Security Fairness Act, signed by President Joe Biden on Jan. 5 2025, eliminated the reduction of Social Security benefits for 2.8 million retirees who were public-sector employees with a state or federal pension and who also worked in Social Security–covered jobs.
Now many of them — teachers, police officers, firefighters — and their survivors are receiving higher monthly payments, which in turn will increase the amount subject to tax.
Because the law is retroactive to early 2024, it may result in beneficiaries receiving a substantial lump-sum payment, which will also affect their tax return.
This story was originally published December 18, 2025 at 5:00 AM.
