# You Earned It, You Keep It Act: What This Bill Actually Does

This bill makes three major changes to how Social Security and payroll taxes work, all aimed at letting people keep more of what they earn. The changes take effect starting in 2025 and affect both how much you pay into Social Security and how much you can receive in benefits.

**The biggest change: No more taxes on Social Security benefits.** Right now, if you receive Social Security and have other income, the government counts part of your benefits as taxable income—meaning you might owe federal income tax on money you already paid into the system. This bill eliminates that completely. If you're retired and collecting Social Security, you won't have to pay federal income tax on those benefits anymore, which puts more money directly in your pocket.

**The second major change: A $250,000 cap on payroll taxes.** Currently, there's no upper limit on how much of your income gets hit with Social Security payroll taxes (the 6.2% taken from your paycheck). This bill caps it at $250,000 per year. So if you earn $300,000, you'd only pay Social Security taxes on the first $250,000—the extra $50,000 wouldn't be taxed for Social Security. This primarily benefits higher earners. The bill also creates a special rule for people who work multiple jobs: if your combined earnings from all employers exceed $250,000, you get a tax credit to avoid paying more than you should.

**The third change: Higher earners get better Social Security benefits.** To keep Social Security solvent, the bill includes a provision that counts earnings above $250,000 toward your future Social Security benefit calculation at a lower rate (2% instead of the normal rate). This means high earners who pay less in taxes would still build up some additional benefits, though at a reduced level compared to lower-income workers.

**How it's funded:** The bill appropriates general tax revenue to make up for the money Social Security loses from these changes, so the trust funds don't go broke. However, this means the federal government would need to find that money elsewhere—either through other taxes, spending cuts, or increased borrowing.

You Earned It, You Keep It Act

Craig, Angie

You Earned It, You Keep It Act This bill excludes Social Security benefits from gross income for purposes of federal income taxes.