He pledged to eliminate taxes on tips, overtime, and Social Security, and make car loan interest tax deductible. After he returned to the White House, Trump continued to say that there will be "no tax on Social Security benefits for seniors."

In the One Big Beautiful Bill Act (OBBBA) that President Trump signed into law on July 4, for tax years 2025 through 2028, qualified tips up to $25,000 are tax deductible, overtime pay (the "half" portion of "time-and-a-half" compensation) up to $12,500 ($25,000 for joint filers) is tax deductible, and interest on car loans up to $10,000 is tax deductible. However, these new tax deductions phase out for taxpayers with higher incomes.

Missing in the OBBBA is the elimination of taxes on Social Security.

Under current tax law, up to 50 percent of Social Security benefits are taxed on income between $25,000 and $34,000 ($32,000 and $44,000 for married filing jointly), and up to 85 percent of Social Security benefits are taxed if one's income is over $34,000 ($44,000 for married filing jointly). For purposes of Social Security taxation, income is defined as adjusted gross income plus nontaxable interest plus half of Social Security benefits. Congress has never indexed for inflation the threshold at which benefits are subject to taxation.

The taxes on Social Security are all still in place. Yet, the Trump administration is claiming that the OBBBA "delivers on President Trump's promise of No Tax on Social Security."

So, how can the Trump administration make that claim? What really happened to no tax on Social Security benefits?

The OBBBA institutes, for tax years 2025 through 2028, "a new bonus deduction of $6,000 for seniors age 65 and older ($12,000 for married seniors)." This deduction "is on top of the standard deduction and the current-law additional deduction for seniors." The standard deduction for tax year 2025 is $15,000 ($30,000 for married filing jointly) and the senior deduction is $2,000 ($3,200 for married filing jointly). The new senior bonus deduction phases out at a 6 percent rate for taxpayers with modified adjusted gross income over $75,000 ($150,000 for married filing jointly).

According to the Trump administration,

The new $6,000 senior deduction is estimated to benefit 33.9 million seniors, including seniors not claiming Social Security. The deduction yields an average increase in after-tax income of $670 per senior who benefits from it.

51.4 million seniors — 88% of all seniors receiving Social Security income — will pay no tax on their Social Security.

This amounts to the largest tax break in American history for our nation's seniors.