You Earned It, You Keep It Act

S. 2716, the You Earned It, You Keep It Act, would repeal the current federal income tax on Social Security benefits. Currently, beneficiaries with combined income above certain thresholds must include a portion of their Social Security benefits in their taxable income. If enacted, this bill would eliminate that tax requirement for all Social Security recipients.

To offset the lost federal revenue, the bill would raise the Social Security payroll tax cap. Currently, workers pay Social Security payroll taxes only on income up to approximately $168,600 annually. The bill would extend this tax requirement to earnings above $250,000, meaning higher-earning workers would continue paying into the Social Security system on income above that threshold. The changes would take effect starting in 2026.

The bill is currently in the Senate Finance Committee. Supporters argue it would provide tax relief to millions of retirees while extending Social Security's solvency. The bill has not yet been voted on by the full Senate.