Bill Seeks to End Federal Social Security Taxes, Boost Retiree Benefits by 2026

A newly proposed federal bill titled the "You Earn It, You Keep It Act," introduced by Sen. Ruben Gallego and Rep. Josh Riley, aims to permanently eliminate federal income taxes on Social Security benefits starting in 2026. This legislation seeks to allow retirees, especially middle- and lower-income individuals who rely heavily on Social Security, to keep more of their benefits by removing the tax burden on these payments. To offset the revenue loss from this tax relief, the bill proposes raising the Social Security payroll tax wage cap from $176,100 to $250,000, thereby increasing contributions from high earners and extending the program's solvency to around 2058. The bill differs from previous temporary tax relief measures, such as President Trump's Big Beautiful Bill, which provided limited and temporary deductions for seniors but did not eliminate taxes on Social Security benefits entirely. By ensuring that Social Security benefits are no longer counted as taxable income for federal purposes, the legislation aims to provide meaningful tax relief while strengthening the program's financial future. This proposal has garnered support from lawmakers and advocacy groups amid growing concerns about Social Security's sustainability and the financial well-being of retirees.