New Tax Break Gives Seniors Up to $6,000. Here’s a suitable one.

Older adults who are struggling financially may be happy to know that the 2025 income tax refunds offer a way to get an additional tax refund for those 65 and older.

You’ll need to qualify — and be sure to file a new Schedule 1-A to claim the special tax deduction.

A new, temporary “super bonus” will allow most taxpayers age 65 and older to deduct up to $6,000 in income from their tax returns. However, there are many rules and restrictions, so not everyone in that group will qualify.

However, if you qualify, you could see a bigger tax refund – or a bigger saving on your tax bill.

At a marginal tax rate of 12%, for example, a $6,000 deduction for a single taxpayer age 65 or older would result in a tax savings of $720.

The new enhanced deduction for seniors applies whether you itemize deductions, such as mortgage interest, or claim the standard deduction on your 2025 income tax returns.

It is also an additional break on top of the existing standard surcharges for taxpayers aged 65 and over who do not file items. For tax year 2025, the additional standard deduction for older adults is $2,000 for single taxpayers and $1,600 per qualifying spouse for married couples filing jointly.

The senior tax break is brand new for 2025 returns

“There’s a lack of awareness that the deduction exists now,” said John Hishta, senior vice president of campaigns for AARP, which supports the enhanced deduction for seniors and has been working to get the word out about the new tax break.

Here are three things you need to know about the “enhanced senior withholding tax” on page 2 of Schedule 1-A:

What is the income limit for the new deduction for seniors?

Income limits apply: High-income seniors get little or no tax break because the deduction begins for those with an adjusted gross income of $75,000 for single filers and $150,000 for joint filers.

Phased deductions come out at a rate of 6% on each $1,000. It is fully liquidated at $175,000 for single filers or $250,000 for joint filers.

You account for adjusted gross income – calculated by adding back other income to your adjusted gross income. On Schedule 1-A, you add any income from Puerto Rico that you excluded from AGI, as well as US resident income from Form 2555 related to foreign real estate and foreign earnings, and income related to the tax break from Form 4563 to exclude income from bona fide residents of American Samoa.

The White House Council of Economic Advisers estimates that those who qualify for the enhanced deduction for seniors could get an average of $670 more in after-tax income, thanks to the new tax break. The deduction is estimated to benefit 33.9 million seniors, including seniors who do not claim Social Security benefits.

The size of the deduction will depend on your income.

Can you qualify if you are 62 or 63?

Age matters: If you’re 62 or 63 now, for example, forget about the enhanced deduction for your 2025 return. This tax break only applies to those aged 65 and over. For 2025 returns, the senior deduction applies to those born before Jan. 2, 1961.

Eligible married couples age 65 and older can claim up to $12,000 in additional deductions.

The enhanced tax deduction is only available for four years — 2025, 2026, 2027 and 2028. Someone who turns 65 in 2029, for example, won’t get that deduction in future years unless the tax rules change again.

Which line do you use to claim the enhanced seniors deduction?

Need a new form: Tax expert Tom O’Saben warned that the new enhanced deduction for seniors could be a frequently missed deduction, especially for seniors who file simple returns and historically have not needed additional schedules.

Many seniors, he warned, will think the new deduction is an automatic increase, similar to the long-standing standard deduction for taxpayers 65 and older. However, we are talking about a new development here, which requires more papers. You must also file a Schedule 1-A to claim the enhanced senior citizen deduction.

The advanced deduction for seniors is on page 2 of Schedule 1-A. See lines 31 to 37 of Schedule 1-A.

Bonus tip: Married couples can’t file separately and claim the new deduction for seniors, which many say will provide relief from growing financial worries.

Contact financial columnist Susan Tompor: [email protected]. Follow him on X @tompor.

This article appeared in the Detroit Free Press: New tax break gives seniors up to $6,000 back. Here’s the one you’re eligible for.

Reporting by Susan Tompor, Detroit Free Press / Detroit Free Press

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