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This year’s tax season may be a little less stressful for some retirees, thanks to a new senior tax credit introduced in President Trump’s “Big and Beautiful Bill.” However, it is important to be clear about what this deduction is and what is not.
If you plan to take advantage of this deduction when filing your 2025 taxes, here are the four main things you need to understand.
Who will receive the new senior citizen tax credit?
You can only claim the new senior citizen tax credit if you are 65 or older at the end of 2025. You must also provide your Social Security number on your tax return and have a modified adjusted gross income (MAGI) of less than $75,000 for individuals and $150,000 for married couples.
Those with MAGI above these limits may be eligible for a reduced deduction or may not be able to claim this new deduction at all. However, they can still claim the senior citizen tax credit that was in place before the Big and Beautiful Bill was passed.
How much is the new senior citizen tax credit worth?
The new senior citizen deduction is worth up to $6,000 for individuals and $12,000 for couples. Married couples must file jointly to claim this deduction.
This is a tax credit, so it reduces your taxable income for the year. For example, a single adult with a taxable income of $60,000 before this deduction would have a taxable income of $54,000 after the deduction. This could result in larger tax refunds for some seniors.
New tax credits for seniors are temporary
The “big, beautiful bill” only created tax credits for tax years 2025 to 2028, and it’s unclear what happens after that. Future legislation could make it permanent, extend it temporarily, or allow it to expire.
This deduction is something to keep an eye on in the coming years. You may have to prepare for future tax increases if the new senior tax credit is repealed.
How to apply for the new elderly tax credit
Applying for the “Big and Beautiful Bill” senior citizen tax credit is similar to applying for any other tax credit. If you use tax preparation software, you will be asked questions to determine if you are eligible. Then it will be applied automatically.
If you are working with an accountant, they should be able to confirm whether you qualify by checking your age, income, and marital status. They may be able to give you some idea of how much this will save you on your 2025 taxes.
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