AARP rushes to aid retirees facing tax shake-up

Millions of retirees are filing their 2025 tax returns this month with a federal tax code that looks different from anything they have seen in years. The One Big Beautiful Bill Act, signed into law on July 4, 2025, created a temporary senior deduction that could reduce your taxable income by thousands of dollars.

Claiming the deduction requires you to understand eligibility rules, income thresholds, and phase-out limits that did not exist last year. For older adults on fixed incomes who already find tax season stressful, those details can feel overwhelming and difficult to parse on your own.

That is where AARP Foundation Tax-Aide, the IRS Volunteer Income Tax Assistance program, and Tax Counseling for the Elderly come in. These free services are available through April 15 and are designed to help you file accurately without spending a dime on professional preparation.

New $6,000 senior deduction changes filing for retirees in 2026

The biggest tax development for older Americans this filing season is a brand-new deduction worth up to $6,000 per eligible individual. Married couples filing jointly can claim up to $12,000 if both spouses are 65 or older, according to the IRS. This deduction stacks on top of both the standard deduction and the existing additional senior deduction under prior law.

“Tax-Aide ensures people receive the refunds they deserve, without the cost or stress of paid tax preparation, and with no hidden fees. For millions of older adults, especially those on fixed incomes, a refund can be the difference between getting by and falling behind on essentials like food, utilities, and medicine.”— Mioshi Moses, Vice President of Volunteer Programs at the AARP Foundation.

To qualify for the full deduction, you must have been at least 65 by December 31, 2025, and your modified adjusted gross income must be $75,000 or less individually. Joint filers need a combined modified adjusted gross income of $150,000 or less to receive the full benefit from the provision.

The deduction phases out above those thresholds and disappears entirely at $175,000 for individuals and $250,000 for married couples. One critical detail that separates this break from many others is that you can claim it whether you take the standard deduction or itemize your returns.

Who benefits most, and who gets left behind by the senior deduction

Not every retiree will see the same savings from this new tax provision, and some will not benefit at all from the change.

“What is the one group of people who are going to be benefiting most from tax changes in the past year? It’s almost certainly going to be seniors and retirees,” Alex Durante, senior economist at the Tax Foundation, told CNBC.

Middle-income seniors are projected to receive an average annual tax cut of roughly $220, while upper-middle-income seniors could see about $300 in annual savings, according to the Peter G. Peterson Foundation. The White House Council of Economic Advisers estimates an average $670 increase in after-tax income per eligible senior filer.

The lowest-income retirees are unlikely to see any savings because their taxable income already falls below the standard deduction threshold. The highest earners above the phase-out limits will receive little to no benefit either, making this primarily a middle-income tax provision for older Americans.

Middle income retirees gain the most from the senior tax deduction, while lower and higher earners see little to no benefit

MoMo Productions/Gettyimages

AARP Foundation Tax-Aide offers free preparation at more than 3,600 locations

AARP Foundation Tax-Aide is the largest free, volunteer-based tax assistance and preparation program in the United States, serving communities nationwide. The program has helped more than 82 million taxpayers since its founding in 1968, and it operates in direct partnership with the IRS. 

Tax-Aide is open to everyone who needs assistance, with a primary focus on adults aged 50 and older with low- to moderate-income. Last filing season, more than 28,300 Tax-Aide volunteers helped over 1.7 million taxpayers secure more than $1.3 billion in total refunds and credits.

Older adults with low income saved $578 million through the program, according to the AARP Foundation. You do not need an AARP membership to use Tax-Aide, and there are no hidden fees or charges of any kind attached to the service. 

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For millions of older adults on fixed incomes, a refund can be the difference between covering essentials and falling behind on bills. Moses emphasized that the program’s volunteers are IRS-certified every year to stay current with all changes to the federal tax code.

Tax-Aide offers multiple service options, including in-person preparation, drop-off service, virtual visits, and a facilitated self-assistance option for those who prefer guidance.

You can find your nearest Tax-Aide location through the AARP Tax-Aide site locator or by calling 1-888-227-7669, and appointments at many locations are filling up quickly this filing season.

IRS programs VITA and TCE provide additional free filing options for seniors

Beyond Tax-Aide, the IRS runs two additional free filing programs that serve older adults across the country in thousands of community locations.

The Volunteer Income Tax Assistance program provides free tax help to people who earn $69,000 or less, individuals with disabilities, and taxpayers with limited English proficiency, according to the IRS.

The Tax Counseling for the Elderly program provides free assistance specifically for individuals aged 60 and older, with expertise in pension-related issues. Most TCE sites are operated through AARP Foundation’s Tax-Aide program, and you can find a VITA or TCE site using the IRS VITA Locator Tool or by calling 800-906-9887.

Planning moves that could help you maximize the senior deduction through 2028

The $6,000 senior deduction is temporary and currently scheduled to remain in effect only through the 2028 tax year, creating a short window for planning. “This three-year window is an incredible, valuable opportunity,” said Miklos Ringbauer, a certified public accountant and founder of MiklosCPA Inc., according to CNBC.

If you are 65 or older and still working, contributing to a 401(k) retirement plan is one effective way to reduce your taxable income below the phase-out thresholds. In 2026, workers aged 50 and older can contribute up to $32,500 to a 401(k) plan, and those aged 60 to 63 can set aside up to $35,750.

Retirees whose modified adjusted gross income hovers near the $75,000 or $150,000 thresholds should watch for income sources that could push them over the limit. Required minimum distributions from traditional IRAs, Roth conversions, and capital gains from investment sales all count toward your modified adjusted gross income calculation.

Charitable giving and mass withdrawals offer additional strategies 

Qualified charitable distributions from an IRA, available to taxpayers aged 70½ and older, allow you to donate up to $111,000 directly from your retirement account. Those distributions do not count as taxable income, which can help keep your modified adjusted gross income within the deduction’s eligibility range for tax purposes.

Some financial planners suggest that retirees with flexibility could consider accelerating withdrawals from traditional retirement accounts while the temporary deduction is active. That approach could help reduce future required minimum distributions and potentially lower your overall tax burden in later years when the deduction expires after 2028.

What documents should you gather before visiting a free tax preparation site?

Whether you visit an AARP Tax-Aide location, a VITA site, or a TCE office, arriving prepared helps volunteers file your return efficiently and accurately. The IRS provides a complete checklist of what to bring, and AARP has a separate detailed guide on its Tax-Aide website.

Essential documents to bring to your appointmentA valid government-issued photo ID for yourself and your spouse, if filing jointly this yearSocial Security cards or Individual Taxpayer Identification Number letters for everyone listed on the tax returnAll income documents, including W-2s, 1099 forms for interest, dividends, Social Security benefits, and retirement distributionsA copy of last year’s federal and state tax returns to help volunteers verify your information and carry forward relevant dataBank account and routing numbers, if you want your refund deposited directly, which is the fastest method for receiving your moneyDocumentation for deductions, including property tax statements, medical expenses, and charitable donation receipts from the past year

Free tax preparation programs handle most standard returns, but they generally cannot prepare filings that involve small businesses with employees, rental income, or the alternative minimum tax.

For the majority of retirees whose income comes from Social Security, pensions, and retirement account distributions, these free programs will handle your return completely.

Related: AARP sounds alarm on Social Security, Medicare

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