Alaska’s seniors could soon benefit from sweeping federal tax relief thanks to the One Big, Beautiful Bill, according to the White House.

Passed under the Trump administration, the legislation introduces a senior deduction that removes most Social Security income from federal taxation.

For around 100,000 retirees in Alaska, this change could deliver real tax benefits in a state where remote living and high utility costs strain fixed incomes. Even a little money back could be the difference between seniors staying in their homes or being forced to move.

A national tax shift for retirees collecting Social Security

According to the White House, the so named “big beautiful bill” passed increases the share of Social Security recipients who owe no federal tax from 64% to 88%—an expansion that adds 14.2 million retirees to the tax-exempt category nationwide.

This shift is made possible by a $6,000 senior-focused tax deduction for individuals and $12,000 for married couples, layered on top of the standard deduction. “This amounts to the largest tax break in history for America’s seniors,” the administration stated in its analysis of the law.

A closer look at Alaska’s senior population

According to 2023 Census data, about 103,000 Alaskans are aged 65 or older—accounting for roughly 14% of the state’s population and 0.17% of the nation’s senior demographic.

With 100,000 seniors expected to receive this deduction, almost all of the retirees in the state are expected to benefit from the law’s federal tax exemption on Social Security.

As for seniors still working in Alaska, they are projected to see real-wage increases between $4,100 and $7,400, and real take-home pay boosts ranging from $7,700 to $11,200. The legislation also provides for 700 new Opportunity Zone housing units, aiming to ease development pressure in rural areas, which are in abundance in the state.

Who benefits—and who misses out

So, why will some retirees receive the deduction and some won’t? The senior deduction phases out at $75,000 for individuals and $150,000 for married couples. It disappears entirely at $175,000 and $250,000. Additionally, because the deduction is not refundable, low-income seniors who already owe no federal income tax won’t receive any direct savings.

That leaves middle-income retirees as the primary beneficiaries. For this group, the senior deduction could help cover these growing expenses, especially as Alaskans face higher-than-average heating and housing costs in retirement.

What comes next?

The senior tax deduction is currently in effect through the 2028 tax year. Without renewal from Congress, the benefit will expire—potentially reinstating the federal tax burden on Social Security income for millions, including Alaska’s 103,000 retirees.

Until then, the combination of the senior tax deduction and expanded SALT cap provides new tax benefits that could ease financial pressure for many of the state’s older adults—particularly those aging in place in more isolated or high-cost areas.

This article was produced with editorial input from Dina Sartore-Bodo, Gabriella Iannetta, and Allaire Conte.