Winners and Losers of Trump’s Economic Overhaul, Seniors Gain Relief, SNAP Faces Cuts, Students See Shifts

In the aftermath of the passage of President Donald Trump’s wide-ranging economic bill, dubbed his “big, beautiful bill,” many Americans are sorting through the massive legislation to determine what it means for their everyday lives. Among the most notable changes are updates affecting Social Security recipients, reductions in nutrition assistance, and greater flexibility for 529 college savings plans. While the law spans nearly 900 pages, some of the clearest impacts are already being felt by retirees, low-income families, and grandparents helping save for a child’s education.

A New Tax Deduction for Some Social Security Recipients

One of the most closely watched elements of the new legislation concerns Social Security benefits. Despite early rumors and emails suggesting that all taxes on benefits had been abolished, the truth is more nuanced. The law does not completely remove taxation on benefits but introduces a new tax deduction for seniors aged 65 and above.

This deduction is designed to ease the financial burden for retirees with moderate incomes. Seniors who qualify could see their taxable income reduced, allowing more money to stay in their pockets.

Key Eligibility Rules for the Deduction

The law sets out several criteria for eligibility:

• Age requirement: Must be 65 or older by the end of the tax year.
• Income threshold: Up to \$75,000 for individuals and \$150,000 for joint filers to receive the full deduction.
• Phase-out range: Partial deductions available up to \$175,000 (single) or \$250,000 (joint).
• Deduction amount: \$6,000 for individuals, \$12,000 for couples over 65.
• Other conditions: A valid Social Security number is required.
• Exclusion: Those between 62 and 64, even if they receive benefits, are not eligible.
• Expiration: The deduction is temporary and will expire after the 2028 tax year.

According to estimates from the White House Council of Economic Advisers, about 88% of seniors receiving Social Security will either pay no taxes or benefit from these deductions. However, many of these beneficiaries already owed no taxes due to low income.

Who Benefits the Most?

The greatest gains are expected for retirees in the \$80,000 to \$130,000 income range. A study by the Urban-Brookings Tax Policy Center indicates that this group could enjoy an average annual tax cut of \$1,100.

For these seniors, the deduction represents meaningful relief, particularly as inflation and rising healthcare costs continue to stretch household budgets.

SNAP Benefits Face Funding Cuts and Tighter Requirements

While retirees see some relief, millions of low-income Americans relying on SNAP (Supplemental Nutrition Assistance Program) may face serious challenges.

The new bill reduces federal support for SNAP and shifts more costs onto states. Beginning in October 2027, states will be responsible for covering at least 5% of SNAP benefit costs and additional administrative expenses.

For states already under fiscal strain, this is expected to translate into reduced benefit levels and stricter eligibility standards.

New Work Requirements for SNAP Recipients

The bill also introduces tougher work requirements:

• The age limit for mandatory work has been raised from 55 to 64.
• Individuals up to 64 must work at least 20 hours per week to continue receiving benefits beyond three months in a three-year period.
• Although exemptions exist, advocacy groups warn they are narrowly defined and may be difficult to qualify for.

These changes could significantly impact older Americans. Data from the National Council on Aging shows that 4.8 million adults over age 59 currently depend on SNAP for food support. For many of them, the new rules may pose nearly impossible hurdles.

529 College Savings Plans Get Expanded Use

Not all changes in the bill are restrictive. For families saving for education, the legislation expands the flexibility of 529 college savings plans.

Traditionally limited to post-secondary education, 529 plans can now be used for a broader range of educational expenses. This expansion allows funds to cover:

• K–12 tutoring programs
• Credentialing and certification programs
• Certain educational classes previously excluded from coverage

This change is particularly beneficial for grandparents who contribute to 529 plans for their grandchildren. The broader definition of qualified expenses ensures that savings can support a child’s education even before college, making these plans more versatile.

Broader Implications of the Bill

The economic bill paints a complex picture:

• Winners: Seniors with moderate incomes, families saving through 529 plans.
• Losers: Low-income households relying on nutrition assistance, older adults struggling to meet new work requirements.

While the Social Security tax deduction offers relief, the cuts to SNAP may widen food insecurity challenges in vulnerable communities. On the other hand, the 529 changes reflect a push toward more flexible education savings that can adapt to modern learning needs.

As the bill is rolled out in stages, its impact will become more visible across households in the U.S.—shaping not just income and food security but also how families prepare for the future of education.

FAQs

Q1. Does the new law eliminate taxes on Social Security benefits?
No. It does not eliminate taxes entirely but introduces a new deduction for seniors aged 65 and above, reducing taxable income for many retirees.

Q2. Who qualifies for the Social Security tax deduction?
Individuals 65 or older earning up to \$75,000 (single) or \$150,000 (joint) qualify for the full deduction. Partial deductions apply at higher income levels, with the program expiring after 2028.

Q3. How will the SNAP program change under the new bill?
Starting in October 2027, states must cover at least 5% of SNAP costs, and new work requirements extend up to age 64, requiring 20 hours of weekly work to maintain benefits.

Q4. What’s new with 529 college savings plans?
Funds from 529 plans can now be used for K–12 tutoring, credentialing, and certain educational classes, giving families more options to support children’s learning before college.

Q5. Who benefits the most from the new Social Security tax deduction?
Retirees with incomes between \$80,000 and \$130,000 are expected to see the biggest gains, with an average tax cut of around \$1,100 annually.