Social Security Tax Law Changes 2025!

Guiding Sunlight Shinning Thru the Forest

1. The Social Security Fairness Act was signed into law on January 2025. This bill repeals the Windfall Elimination Provision & the Government Pension Offset restoring full pensions to public service retirees who have been subject to the Windfall Elimination Provision (WEP) & Government Pension Offset (GPO). Beneficiaries will see an average monthly increase in income of $360.

2. Social Security retirement benefits will increase by 2.5% in tax year 2025, so on average social security benefits will increase by about $50 per month for beneficiaries.

3. Social Security benefits for retirement can be applied for & received as early as age 62.

4. Full retirement age to receive Social Security benefits is 67. This will increase the beneficiary's monthly payment versus claiming benefits at age 62.

5. At & after age of 70, Social Security benefits will no longer increase, so don't delay filing after age 70.

6. Your total yearly earnings are used to calculate your Social Security credits. The amount needed for a credit in 2025 is $1,810. You can earn up to a maximum of 4 credits per year. The amount needed to earn 1 credit automatically increases each year when average wages increase.

   You must earn a certain number of credits to be eligible for Social Security benefits. The number of credits you need depends on your age when you apply and the type of benefit (retirement, disability, etc.) you are applying for. No one needs more than 40 credits for any Social Security benefit which is 10 years of work.

Sincerely,

Ashley Thomas, EA