New Yorkers’ Social Security Checks Will Shrink This Month

August will be rough for some Social Security beneficiaries in New York State. Before we get to the bad news, there is some good news. With the passage of the One Big Beautiful Bill Act, many social security recipients won't have to pay federal income taxes on their benefits. The tax relief will take effect in 2026 for approximately 88 percent of recipients. The tax relief applies to New Yorkers who are aged 65 or older and have an income of up to $75,000 for an individual or $150,000 for married couples. They will be able to take a $6,000 tax deduction. It will end after 2028. Social Security Commissioner Frank Bisignano said,

"This is a historic step forward for America's seniors. For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans. By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump's promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they've earned."

Now on to the bad news....

KEEP READING: Major Change To Social Security Payments In New York Changes Again

Social Security Payments Will Be Slashed Starting This Month

Starting this month, some New Yorkers are going to see a lot less money in their Social Security checks. During President Biden's term, in March of 2024, he directed the Social Security Administration to stop collecting 100 percent of a person's benefits to repay an overpayment they may have received. Instead, the Biden administration settled on taking 10 percent to go towards repayment. That all changed with the current administration.

Trump instructed the SSA to resume seizing 50 percent of a person's benefits in order to recoup any overpayment. Per The Motley Fool, the first notices were sent out on April 25. New Yorkers who received these notices were given 90 days to appeal, but the grace period has ended. That means that any New York beneficiaries will begin to see their benefits seized to repay the overpayment they received.

KEEP READING: Automatic Checks Coming To New Yorkers This October

Contrary to common talking points, the majority of overpayments are not due to fraud. Social Security overpayments can be due to changes in income, marital status, or disability status. Most of the time, these changes were not reported in time to update records. Clawbacks, which is what the repayment of overpayments is called, will start showing up this month, if they haven't already. The 90-day window to appeal ended on July 24.

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