A new $6,000 tax deduction for Americans 65 and older could boost refunds for millions of older taxpayers, putting an average of about $670 more in their pockets this year, according to advocacy group AARP.

"The benefits could be vast," said Bill Sweeney, AARP's senior vice president of government affairs, in a conference call Thursday. "The bonus deduction will run through 2028 — that is four years of immediate relief at a time when older Americans are facing really high costs."

The $670 figure is based on a 2025 analysis by the White House Council of Economic Advisers, which assessed the impact of the new deduction included in Republican lawmakers' tax and spending law, known as the "big, beautiful bill" act. 

The tax break comes as seniors tell AARP they are struggling to keep pace with the rising cost of medicine, food and other basic expenses, said Nancy LeaMond, the group's chief advocacy and engagement officer.

"In focus groups last fall, we heard about people still working long after they thought they'd be retired," she said. "Sometimes in the world we live in, $600 doesn't sound like a lot, but we can tell you, based on conversations with our members, that it is a very, very significant help to them."

AARP officials expressed concern that some older Americans may miss out on the new senior deduction because they are unaware of the tax break, which takes effect for the 2025 tax season. The IRS will start accepting tax filings on Jan. 26.

Who qualifies for the $6,000 senior deduction?

People who turned 65 by Dec. 31, 2025, are eligible for the new deduction, according to the IRS. The deduction provides $6,000 for each qualifying individual, or $12,000 for married couples who both qualify.

The tax break is subject to income limits. Single filers 65 and older qualify for the full $6,000 deduction if their modified adjusted gross income was below $75,000 last year, while married couples must earn less than $175,000 to receive the full $12,000.

The deduction is reduced by six cents for every $1 above those thresholds, and is fully phased out for single filers earning more than $175,000 and married couples earning more than $250,000.

Individuals also need a work-authorized Social Security number to qualify for the senior deduction, H&R Block notes.

Can you claim the tax break if you take the standard deduction?

Yes, the deduction is available to people who itemize, as well as for those who take the standard deduction, which stands at $15,750 for single filers and $31,500 for married couples filing jointly, according to H&R Block.

The new tax break comes on top of an existing $2,000 deduction for seniors. Combined with the standard deduction, that means single filers 65 and older can deduct a total of $23,750, while married couples can deduct up to $46,700, H&R Block said.

Does this mean my Social Security income won't be taxed?

No, because this is a deduction that beneficiaries can use to lower their taxable income. But it doesn't specifically apply to Social Security benefits, which remain subject to federal income taxes. 

However, the deduction will benefit seniors by lowering their taxable income, shielding more of it from federal income taxes and providing more money in their pockets, Sweeney of the AARP said.

H&R Block notes that Americans who aren't yet receiving Social Security can still claim the $6,000 deduction.