Older adults who face a financial crunch may be happy to know that 2025 federal income tax returns offer a way to get more tax refund cash for those 65 and older.
You’ll need to qualify — and make sure to file a new Schedule 1-A to claim a special tax deduction.
The new, temporary “senior bonus” will enable many taxpayers 65 years old and older to deduct up to $6,000 in income from their federal returns. Plenty of rules and restrictions apply, though, so not everyone in that age group will qualify.
If you qualify, though, you could see a fatter tax refund — or substantial savings on your tax bill.
At a 12% marginal tax rate, for example, the $6,000 deduction for a single taxpayer who is 65 or older would result in $720 in tax savings.
The new enhanced deduction for seniors applies whether you itemize deductions, such as mortgage interest, or claim the standard deduction on 2025 federal income tax returns.
It also is an extra break on top of the existing extra standard deduction for taxpayers 65 and older who do not itemize. For the 2025 tax year, the extra standard deduction for older adults is $2,000 for single taxpayers and $1,600 per qualifying spouse for married couples filing jointly.
The tax break for seniors is brand new on 2025 returns
“There’s a lack of knowledge that the deduction exists now,” said John Hishta, senior vice president for campaigns for AARP, which supported the new enhanced senior deduction and has been working to get the word out about the new tax break.
Here are three things you need to know about the new “enhanced deduction for seniors” on page 2 of Schedule 1-A:
What is the income limit for the new senior deduction?
Income limits apply: Higher income seniors receive a smaller tax break or no tax break because the deduction starts phasing out for those with a modified adjusted gross income of $75,000 for singles and $150,000 for joint filers.
The deduction phases out at a 6% rate for every $1,000. It is fully phased out at $175,000 for single filers or $250,000 for joint filers.
You’re dealing with your modified adjusted gross income — which is calculated by adding back some income to your adjusted gross income. On Schedule 1-A, you’re adding back any income from Puerto Rico that you excluded from AGI, as well as some income for U.S. citizens from Form 2555 that relates to foreign housing and foreign earned income, and income related to a tax break from Form 4563 for the exclusion of income from bona fide residents of American Samoa.
The White House Council of Economic Advisers estimated that those who qualify for the enhanced senior deduction could gain on average $670 in after-tax income, thanks to the new tax break. The deduction is estimated to give a boost to 33.9 million seniors, including older adults who are not claiming Social Security benefits.
The size of the deduction will depend on your income.
Can you qualify if you’re age 62 or 63?
Age matters: If you’re 62 or 63 now, for example, forget about the enhanced senior deduction for your 2025 return. This tax break only applies for those 65 and older. On 2025 returns, the deduction for seniors applies for those who were born before Jan. 2, 1961.
Eligible married couples who are both 65 and older can claim up to $12,000 for an additional deduction.
The enhanced senior deduction is only available for four years — 2025, 2026, 2027 and 2028. Someone who turns 65 in 2029, for example, isn’t going to get that deduction in future years unless the tax rules change again.
What line do you use to claim the enhanced senior deduction?
You need a new form: Tax professional Tom O’Saben warned the new enhanced deduction for seniors could turn into a commonly missed deduction, especially for seniors who file simple returns and historically did not need additional schedules.
Many seniors, he warned, will assume the new deduction is an automatic increase, similar to the long-standing additional standard deduction for taxpayers who are 65 and older. Yet, we’re talking about a new boost here, which requires extra paperwork. And you must file Schedule 1-A to claim the enhanced senior deduction.
The enhanced senior deduction is on page 2 of Schedule 1-A. See lines 31 through 37 on Schedule 1-A.
Bonus tip: Married couples cannot file separately and claim the new deduction for older adults, which many say will offer relief from growing financial anxiety.
Contact personal finance columnist Susan Tompor: [email protected]. Follow her on X @tompor.
This article originally appeared on Detroit Free Press: A new tax break gives seniors up to $6,000 back. Here’s who qualifies.
Reporting by Susan Tompor, Detroit Free Press / Detroit Free Press
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