The One Big Beautiful Bill Act
OBBBA has passed. What’s in it?
It’s difficult to find non-partisan interpretations of what’s in this bill. It’s difficult to see the misinformation that has been floating around that Medicare and Social Security are ending. Medicare and Social Security are NOT ending. However, Medicaid WILL have stricter requirements.
This is a summary of various articles that touch on issues that affect senior citizens. Some of you are working while others are retired, some own businesses, some are high net worth while others are on Medicaid, some have started collecting Social Security, and others are waiting to start collecting.
For those still working
Medicare Part A
Prior to this Bill, if someone was participating in a Health Savings Account and continued to contribute to it past Age 65, they would get a penalty. Now they will be able to continue to contribute to their HAS without penalty. See https://www.kiplinger.com/retirement/medicare/changes-to-medicare-in-the-one-big-beautiful-bill-act.
No tax on overtime or tips
The deduction for tips is limited to $25,000 per year, while the deduction for overtime is limited to $12,500 per year ($25,000 if a joint return is filed). Additionally, both deductions are phased out for workers with modified adjusted gross income more than $150,000 ($300,000 for a joint return.) See https://www.theemployerreport.com/2025/07/senate-passes-no-tax-on-tips-and-overtime-provisions/
For Business Owners
The Section 199A deduction for small businesses is expanded; and incentives are reinstated, such as 100% immediate expensing for machinery, equipment and R&D expenses and allowing full expensing for new factories (to encourage domestic manufacturing).
Social Security
According to the 7/3/25 Press release by Social Security: The bill ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits, providing meaningful and immediate relief to seniors who have spent a lifetime contributing to our nation's economy. See https://www.ssa.gov/news/press/releases/2025/?utm_content=pressrelease&utm_medium=email&utm_source=govdelivery#2025-07-03
However, you are still going to see taxes come out of your Social Security check unless of course you request that they no longer take taxes out. According to AARP, the targeted tax relief for older adults will come in the form of a $6,000 “bonus” deduction that could offset federal taxes on Social Security benefits for some.
The full deduction is available to taxpayers age 65 and older with a modified gross adjusted income (MAGI) of up to $75,000 for an individual filer and $150,000 for a couple filing jointly. (Each spouse can take the deduction, for a total of $12,000, if both are 65-plus.)
The deduction is reduced for higher earners, up to $175,000 for a single filer and $250,000 for a couple. Above those thresholds, you don’t qualify.
You can claim this new deduction even if you otherwise itemize deductions on your tax return. If you don’t, you can add it to the existing standard deduction, which is already higher for taxpayers 65 and older. But you’ll be able to do so only for the next four years — the bonus deduction is set to expire in 2029. See
https://www.aarp.org/government-elections/budget-bill-older-americans.html
Medicaid
This bill eliminates benefits for an estimated 1.4 million undocumented immigrants. See https://www.whitehouse.gov/articles/2025/06/50-wins-in-the-one-big-beautiful-bill/
To be eligible for Medicaid, there will be new “community engagement requirements” of at least 80 hours per month of work, education or service for able-bodied adults without dependents. One source says the new requirements would begin on Dec. 31, 2026. Another source says the new requirement would not kick in until Jan. 1, 2029. People would also have to verify their eligibility for the program twice a year, rather than just once.
The resulting cut in Federal funding over 10 years is estimated to total $700 billion. See
https://www.pbs.org/newshour/politics/house-republicans-narrowly-passed-trumps-big-beautiful-bill-heres-what-in-it and https://apnews.com/article/big-beautiful-bill-trump-tax-cuts-medicaid-00ce1ff8a7b7fea7a894d38398748c6b
Supplemental Nutrition Assistance Program (SNAP) (Food Stamps)
Starting in fiscal 2028, States would shoulder 5% of benefit costs, and 75% of the administrative costs. Currently, states pay none of the benefit and half of the administration costs.
This bill expands the work requirements to receive food aid. Under current law, able-bodied adults without dependents must fulfill work requirements until they are 54, and that would change to age 64. (Also, some parents are currently exempt from work requirements until their children are 18; that would change so only those caring for a dependent child under the age of 7 are exempt.)
The resulting cut in Federal funding over 10 years is estimated to total $267 billion. See https://apnews.com/article/big-beautiful-bill-trump-tax-cuts-medicaid-00ce1ff8a7b7fea7a894d38398748c6b
Other Tax provisions
The Tax Cuts and Jobs Act that was passed in 2017 was scheduled to sunset at the end of 2025. This has been permanently extended and maintains the current top income tax rate of 37%.
See https://taxfoundation.org/research/all/federal/big-beautiful-bill-house-gop-tax-plan/
Increase in the Standard deduction threshold. In addition to the $6,000 increase for seniors, there’s a $1000 increase for individuals and $2000 increase for married filing jointly.
Auto loans for U.S. made vehicles allows for a tax deduction of up to $10,000 in interest, this expires in 2029.
The State and Local Tax (Salt) Deduction was raised from $10,000 to $40,000; and an increased estate tax exemption from $13.99 million to $15 million for individuals and from $27.98 to $30 million for those married filing jointly.
Depending on your financial situation, everyone will interpret the changes that are coming differently. Stay healthy, stay strong, and stay informed from reliable sources on the subjects that matter the most to you. And remember that you don’t have to do this alone, reach out to trusted partners and experts in your areas of concern.
The links to the sources for this article will be live on the blog page at www.hiattagency.com
This summary is provided for general informational purposes only and is not all-inclusive of the nearly 1,000 page bill. Please talk with your Accountant and Financial Advisor for more details. The information was obtained from sources considered reliable but not guaranteed to be accurate.
Mary Hiatt is a Retirement & Insurance Advisor and President of Mary the Medicare Lady (A
non-government entity.) She is Certified in Long Term Care Programs, Policies, & Partnerships and Annuities. She offers Educational Workshops on Medicare, Long Term Care and more at no charge. She offers eligible spend-down plans and works with reputable estate planning Attorneys to help her clients get Medicaid. Not connected with or endorsed by the U.S. government or the federal Medicare program. Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. See www.hiattagency.com or contact licensed independent agent mary [at] hiattagency [dot] com or call or text 402 672 9449 for more information.