SSA misleads on US tax break

In a celebratory email sent to Americans across the country, the Social Security Administration (SSA) praised the Trump administration's sprawling budget and tax bill and said it eliminated federal income taxes on most retirees’ benefits.

- TARA SIEGEL BERNARD

But that’s not exactly what it does.

Many retirees quickly took notice, with several writing to The New York Times to question some of the agency’s statements, while pointing out what felt to them like unusually partisan language.

The agency's embrace of the legislation, which was signed into law by President Donald Trump on Friday, was also at odds with the effect it is expected to have on the programme's financial health. The law is projected to further weaken Social Security's revenues at a time it is already facing a financing shortfall.

Eliminating taxes on Social Security, along with taxes on tips and overtime, was one of Trump's often-repeated campaign promises.

The email, which went out July 3, said the new law “includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries,” and “additionally, it provides an enhanced deduction for taxpayers aged 65 and older.”

But the enhanced deduction will help reduce households’ tax bills on their overall income, including Social Security income. “The SSA statement implies there is a direct tax cut on Social Security benefits,” said Howard Gleckman, a senior fellow at the Tax Policy Center, a nonpartisan think tank, “which there is not.”