Increasing 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) one-half 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 For purposes of this section, the term base amount means— (1) except as otherwise provided in this paragraph, $35,000, (2) $50,000 in the case of a joint return, and (3) zero in the case of a taxpayer who— (A) 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 (B) does not live apart from his spouse at all times during the taxable year.. (c) Transfers to trust funds (1) Hospital Insurance Trust Fund held harmless Of the total revenue from taxation of social security benefits, there are appropriated to the Federal Hospital Insurance Trust Fund such amounts as would be transferred to such fund under section 121(e) of the Social Security Amendments of 1983 (42 U.S.C. 401 note) and section 86 of such Code as such sections were in effect on the day before the date of the enactment of this Act, at such times and in such manner as would be provided therein. (2) Transfers to payor funds Of the balance of the total revenue from taxation of social security benefits remaining after appropriations under paragraph (1) have been made, there are appropriated to each payor fund amounts equivalent to the portion of such balance equal to a fraction— (A) the numerator of which is the amount equivalent to the net revenues received in the Treasury attributable to the application of sections 86 and 871(a)(3) of such Code to payments from such payor fund made in taxable years beginning after December 31, 2026, and before January 1, 2037; and (B) the denominator of which is the total revenue from taxation of social security benefits. (3) Transfers The amounts appropriated by paragraph (2) to any payor fund shall be transferred from time to time (but not less frequently than quarterly) from the general fund of the Treasury on the basis of estimates made by the Secretary of the Treasury of the amounts referred to in such paragraph. Any such quarterly payment shall be made on the first day of such quarter and shall take into account social security benefits estimated to be received during such quarter. Proper adjustments shall be made in the amounts subsequently transferred to the extent prior estimates were in excess of or less than the amounts required to be transferred. (4) Definitions For purposes of this subsection— (A) Total revenue from taxation of social security benefits The term total revenue from taxation of social security benefits means the amount equivalent to the net revenues received in the Treasury attributable to the application of sections 86 and 871(a)(3) of the Internal Revenue Code of 1986 to payments from any payor fund made in taxable years beginning after December 31, 2026, and before January 1, 2037. (B) Payor fund The term payor fund means any trust fund or account from which payments of social security benefits are made. (C) Social security benefits The term social security benefits has the meaning given such term by section 86(d)(1) of the Internal Revenue Code of 1986. (5) Conforming amendment Section 121(e) of the Social Security Amendments of 1983 (42 U.S.C. 401 note) is repealed. (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2026, and before January 1, 2037.