If you are 65 or older, the federal tax law enacted on July 4, 2025 (Public Law 119-21) gives you a new deduction worth up to $6,000 a year for tax years 2025 through 2028. Many retirees used it for the first time on their 2025 returns this spring. Because the deduction shrinks as income rises, the decisions you make in the last months of 2026, about IRA withdrawals, Roth conversions and charitable gifts, can affect how much of it you keep. Here is how it works.
Who qualifies
- Age. You must be 65 or older on or before the last day of the tax year. For 2026, that means turning 65 by December 31, 2026.
- Per person. The deduction is $6,000 for each eligible person, so a married couple who are both 65 or older can claim up to $12,000.
- Social Security number and filing status. Each person claiming it needs a valid Social Security number, and married couples must file a joint return.
- Itemizing is not required. You can claim the deduction whether you take the standard deduction or itemize. It is figured on Schedule 1-A of Form 1040.
It comes on top of the existing senior standard deduction
The new deduction does not replace the additional standard deduction that taxpayers 65 and older already receive. For 2026, that existing extra amount is $1,650 per qualifying person for married taxpayers, or $2,050 for a single filer or head of household, added to the regular 2026 standard deduction of $16,100 (single) or $32,200 (married filing jointly). The new $6,000 deduction is claimed in addition to all of this, and it is also available to people who itemize.
The income phase-out
The deduction is reduced by 6 percent of your modified adjusted gross income (MAGI) above $75,000, or $150,000 on a joint return. For most people, MAGI is simply the adjusted gross income shown on Form 1040.
- Single example: MAGI of $95,000 is $20,000 over the threshold. Six percent of $20,000 is $1,200, so the deduction is $6,000 − $1,200 = $4,800.
- Married example: A couple, both over 65, with MAGI of $170,000 is $20,000 over the joint threshold. Each spouse’s $6,000 is reduced by $1,200, leaving $4,800 each, or $9,600 in total.
- Where it disappears: The deduction is fully phased out at MAGI of $175,000 for a single filer and $250,000 for a joint return.
Planning ideas for the rest of 2026
Because every $1,000 of additional income in the phase-out range costs you $60 of deduction, it can pay to look at the timing of income before December 31.
- IRA withdrawals and Roth conversions. Taxable IRA distributions and Roth conversions increase your MAGI. If you are in or near the phase-out range, consider how a withdrawal or conversion this year compares with spreading it over several years. A conversion can still make sense; just count the lost deduction as part of its cost.
- Qualified charitable distributions (QCDs). If you are 70½ or older, you can give directly from your IRA to a qualifying charity. A QCD is excluded from income, so it does not raise your MAGI the way taking the money and then donating it would. For 2026, the annual QCD limit is $111,000 per person. QCDs can also count toward your required minimum distribution.
- Capital gains. Gains from selling investments raise MAGI too. If you plan to rebalance, think about which year the gains land in.
- Still working? Contributions to a traditional 401(k) or deductible IRA reduce MAGI. For 2026, workers 50 and older can contribute up to $32,500 to a 401(k) ($24,500 plus an $8,000 catch-up), or up to $35,750 if they are age 60 through 63, because of a higher $11,250 catch-up for that age group.
What about Social Security?
The new deduction does not change the rules that decide how much of your Social Security benefits are taxable. Those rules still depend on your income. What the deduction does is lower your taxable income, which can reduce the federal tax you owe on the benefits that are taxable. Keep in mind that the deduction is scheduled to expire after 2028.
California
California does not conform to the new federal senior deduction, according to the Franchise Tax Board’s summary of the federal law (last updated October 2026). California instead provides its own senior exemption credit for taxpayers 65 or older on the state return. Your California tax will not reflect the $6,000 federal deduction.
Sources
- IRS: Check your eligibility for the new enhanced deduction for seniors
- IRS Tax Tip 2026-14: Filing season updates and resources for seniors
- IRS: Schedule 1-A (Form 1040), Part V, Enhanced Deduction for Seniors
- IRS Revenue Procedure 2025-32 (2026 standard deduction and additional amounts)
- IRS Notice 2025-67 (2026 retirement plan, catch-up and QCD limits)
- Congress.gov: Text of H.R. 1 (Public Law 119-21), section 70103
- California Franchise Tax Board: Summary of Federal Income Tax Changes
A few minutes of planning before December 31 can help you keep more of this deduction. Don’t hesitate to contact the office or call us at (858) 549-1295 if you have questions.
This article provides general information as of October 2026 and is not tax advice for your specific situation. Tax rules change, and the right answer depends on your facts.