4 Million Retirees in Texas Qualify For The ‘Senior Deduction’ Under Big, Beautiful Bill

Sherri Johnson
Aug 20
2 min read

By The Realtor.com Team

Texas retirees are set to benefit from a major federal tax change aimed at easing financial pressure on older Americans.

Under the One Big Beautiful Bill, a senior-focused deduction will eliminate federal taxes on Social Security income for most recipients.

In Texas, a whopping 4 million retirees are expected to qualify—and yet that still does not account for everyone over the age of 65 in the state.

Tax Relief on Social Security Becomes the Norm

The law, signed into effect by the Trump administration, introduces a new deduction specifically for seniors: $6,000 for individuals and $12,000 for married couples. When combined with the standard and existing senior deductions, the total can reach $23,750 for individuals and $46,700 for couples over 65.

That change is expected to eliminate federal tax liability on Social Security for 88% of recipients—up from just 64% under prior law.

It represents a massive 24-point jump that will help an additional 14.2 million seniors nationwide keep more of their retirement income.

Texas' Aging Population Will See Major Gains

According to the U.S. Census Bureau’s 2023 American Community Survey, Texas has a senior population of 4.2 million residents aged 65 or older, comprising 13.7% of the state’s total population.

Of those, an estimated 4 million are expected to benefit from the Social Security exemption outlined in the bill, according to the White House. In addition to the deduction, working Texas households are projected to see real wage increases of $3,900 to $6,900, with take-home pay expected to rise by up to $10,700 under the new tax code.

Not All Seniors Will Feel the Full Effect

The senior tax deduction offers the most relief to retirees who still pay income taxes. For these middle-income households, the extra deduction may be enough to zero out their taxable income—significantly lowering or eliminating their tax bill.

However, retirees with very low incomes—particularly those relying solely on Social Security—likely won’t see a change. These seniors already pay little to no income tax and therefore won’t benefit from a deduction that only reduces taxable income.

The deduction also phases out at $75,000 for individuals and $150,000 for couples, disappearing entirely above $175,000 and $250,000. Wealthier retirees will be excluded.

Importantly, the provision is only authorized through 2028. Without action from Congress, it will expire after that year.

Financial Breathing Room for Homeowners

Texas homeowners over 65 are no strangers to rising property taxes and insurance premiums, particularly in fast-growing metros like Austin, Dallas, and Houston. For some, the new deduction could make the difference between staying in their homes or being forced to downsize.

When combined with a quadrupled SALT deduction cap, some retirees may see thousands of dollars in extra tax savings—particularly in high-assessment counties or for those who itemize.

And with a projected COLA adjustment in 2026, Texas seniors may benefit from both rising Social Security checks and fewer taxes taken out—offering welcome relief in a time of rising costs.