Increase in threshold amounts for inclusion of Social Security benefits in income

(a) In general Subsection (a) of section 86 of the Internal Revenue Code of 1986 is amended to read as follows: (a) In general Gross income for the taxable year of any taxpayer described in subsection (b) (notwithstanding section 207 of the Social Security Act) includes Social Security benefits in an amount equal to the lesser of— (1) 85 percent of the Social Security benefits received during the taxable year, or (2) 85 percent of the excess described in subsection (b)(1).. (b) Base amount Subsection (c) of section 86 of such Code is amended to read as follows: (c) Base amount (1) In general For purposes of this section, the term base amount means— (A) except as otherwise provided in this subsection, $34,000, (B) $68,000 in the case of a joint return, and (C) zero in the case of a taxpayer who— (i) is married as of the close of the taxable year (within the meaning of section 7703) but does not file a joint return for such year, and (ii) does not live apart from his spouse at all times during the taxable year. (2) Inflation adjustment (A) In general In the case of any taxable year beginning after 2025, each of the dollar amounts in paragraph (1) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2024 for calendar year 2016 in subparagraph (A)(ii) thereof. (B) Rounding If any amount determined under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000.. (c) Social Security trust funds held harmless There are hereby appropriated (out of any money in the Treasury not otherwise appropriated) for each fiscal year to each fund under the Social Security Act or the Railroad Retirement Act of 1974 an amount equal to the reduction in the transfers to such fund for such fiscal year by reason of the amendments made by this section. (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.