Senior Deduction 2026: $6,000, Phase-Out and Roth Conversions

What the statute says

Section 70103 of Public Law 119-21 is titled “Termination of deduction for personal exemptions other than temporary senior deduction.” It adds subparagraph (C) to section 151(d)(5) and applies to taxable years beginning after December 31, 2024. The pieces that matter for a retiree with rental, K-1 and IRA income:

Source: IRC section 151 (Cornell LII text, as amended through Pub. L. 119-21), Public Law 119-21 section 70103, IRS Schedule 1-A (Form 1040) 2025 and its instructions in the 2025 Form 1040 instructions, IRS newsroom page on the working Americans and seniors deductions. We read the 2025 Schedule 1-A: it was the version posted at the IRS forms address on October 20, 2026. The statute governs 2026.

The phase-out, dollar by dollar

The 2025 form makes the arithmetic explicit: line 33 is MAGI minus $75,000 ($150,000 joint), line 34 multiplies it by 6%, line 35 subtracts that from $6,000, and lines 36a and 36b each enter the line 35 amount if that spouse qualifies. So the reduction is applied to each person's $6,000, not once to the couple. The table applies it (our arithmetic).

Source: our arithmetic on IRC 151(d)(5)(C)(iii) and Schedule 1-A lines 31 to 37. For a joint return with one qualifier the single column applies, shifted to a $150,000 start.

Two consequences. First, the zero points are $175,000 for a single filer and $250,000 for any joint return, one qualifier or two. Some guides give $350,000 for two qualifying spouses; that figure would need the 6% to be applied once to the couple's combined $12,000, and the form does not do that (the form's lines 35 to 37 are our basis, and the instructions say the “$6,000 per person amount is reduced” if MAGI is over the threshold). Second, the slope is twice as steep for a couple who both qualify: 12 cents of deduction per dollar of MAGI, which is why their band is $100,000 wide but carries up to $12,000.

What the whole band is worth in tax (our arithmetic, 2026 brackets, standard deduction): a single filer whose MAGI rises from $75,000 to $175,000 loses $6,000 of deduction and pays $1,440 more than if the deduction were kept; a joint return with one qualifier going from $150,000 to $250,000 pays $1,415 more; a couple who both qualify pay $2,702 more.

What the band does to your marginal rate

For each extra dollar of MAGI in the band, taxable income rises by the dollar plus 6 cents per qualified person, because the deduction shrinks as well. The marginal rate on ordinary income is therefore the bracket rate times (1 + 0.06 x qualifiers). The 2026 brackets and standard deductions are from Rev. Proc. 2025-32: $16,100 single and $32,200 joint, plus $2,050 (unmarried) or $1,650 per spouse for age 65 or older.

Source: our arithmetic on Rev. Proc. 2025-32 section 3.01 (brackets), section 3.14 (standard deduction and the additional amount for the aged) and IRC 151(d)(5)(C)(iii). The MAGI ranges are approximate and assume the standard deduction and no other adjustments.

Long-term capital gains and qualified dividends sit on top of ordinary income. A gain does not itself become ordinary income, but it raises MAGI, shrinks the deduction and pushes ordinary taxable income up, which can use up the 0% capital-gain zone ($98,900 of taxable income joint, $49,450 single in 2026, Rev. Proc. 2025-32 section 3.03). The gain cases below show that cost in dollars.

Worked cases: a Roth conversion or a sale landing in the band

These cases use the 2026 brackets and standard deduction, no itemizing, no state tax, no net investment income tax and no other credits. “Base MAGI” is ordinary income before the event. “From the phase-out” is the extra tax compared with a case where the deduction stays at its starting level (our arithmetic). The full set of 34 cases is in the CSV.

A $50,000 Roth conversion, or any $50,000 of ordinary income such as ordinary K-1 income or an IRA withdrawal.

A $100,000 long-term gain on top of ordinary income, such as a rental sale after the depreciation recapture or a gain passed through on a K-1.

Source for both tables: our arithmetic on IRC 151(d)(5)(C), Rev. Proc. 2025-32 (brackets, standard deduction, capital-gain thresholds) and the capital-gain stacking order. Illustrations with round assumptions of ours, not predictions of anyone's tax bill.

Reading the tables. A single filer with $100,000 who converts $50,000 pays $12,153 of federal tax, 24.3% of the conversion, and $720 of that exists only because the deduction falls from $4,500 to $1,500. A couple who both qualify, starting at $160,000, pay $12,320 on the same $50,000 and $1,320 of it is the phase-out; their deduction goes from $10,800 to $4,800. The same couple with $130,000 who add a $100,000 gain pay $15,132, and $2,592 of that is the lost deduction, partly because the extra ordinary taxable income eats the 0% zone. A single filer starting at $180,000 or a joint filer at $250,000 is already past the zero point, so the phase-out costs nothing more (rows for those starting points are in the CSV).

What reaches MAGI for a rental, K-1 and IRA household

MAGI here starts from Form 1040 line 11b, adjusted gross income, so whatever lands in adjusted gross income counts: net rental income after the passive loss rules, ordinary income and gains passed through on a Schedule K-1, taxable IRA distributions and Roth conversions, interest, dividends and capital gains, and taxable Social Security benefits (our reading of the form). For how each item is calculated, see our guides to rental income tax, K-1 boxes for real estate funds, capital gains on real estate and the Roth conversion guide.

The mechanics that make this band awkward for a property owner:

• A sale is lumpy. A rental sold in one year adds the whole recognized gain to MAGI that year. If the base is under $75,000 or $150,000, the sale can erase most of the deduction in one step; once MAGI is past $175,000 or $250,000, there is nothing left to lose.
• A K-1 arrives late. Partnership and fund K-1s often arrive after the year ends, so the MAGI you plan around in October can change after the figures come in. See our guide on estimated payments for K-1, REIT and BDC income.
• Things that do not raise AGI do not count. A qualified charitable distribution made directly from an IRA is, on our reading, not included in income and so does not raise AGI; the rules are in our QCD guide.
• Tax-exempt interest is not in this MAGI. Unlike the IRMAA test, the senior deduction's MAGI adds back only section 911, 931 and 933 exclusions (IRC 151(d)(5)(C)(iii)(II)).

Social Security makes the band steeper

Benefits are taxable up to 85% once income passes the base amounts on the Form 1040 worksheet: $25,000 single or $32,000 joint, with the 50% tier running $9,000 or $12,000 above them. In the zone where the 85% inclusion is still building, a dollar of other income adds up to $1.85 to AGI, and every added dollar of AGI above $75,000 also reduces the senior deduction (our arithmetic).

Our case: a single 65-plus filer with $48,000 of Social Security and $42,000 of other income. Taxable benefits are $31,700, AGI is $73,700, the deduction is $6,000 and federal tax is $5,698. A $10,000 Roth conversion lifts taxable benefits to $40,200 and AGI to $92,200 (up $18,500), cuts the deduction to $4,968, and raises federal tax to $9,910: $4,212 extra, 42.1% of the conversion, of which $227 comes from the lost deduction. Most of the cost is the benefit inclusion; the phase-out is the part that is new in 2025. For a single filer with benefits under about $34,000 a year the two zones do not overlap, because the inclusion is complete before AGI reaches $75,000 (our arithmetic). Benefits are the thing to model first.

Medicare IRMAA is a different test

The two rules are easy to mix up. The senior deduction reads this year's MAGI and shrinks along a slope. IRMAA reads the MAGI from two years earlier and jumps at cliffs.

Source: IRC 151(d)(5)(C); SSA POMS HI 01101.010 and HI 01101.020 (December 2, 2025); Schedule 1-A (2025). The annual dollar cost of each tier is worked out on our IRMAA page.

So a conversion can pay twice with different timing. Our arithmetic for a couple who both qualify, with $190,000 of base MAGI: a $50,000 conversion takes MAGI to $240,000, the deduction falls from $7,200 to $1,200 and the federal tax on the conversion is $12,320, $1,320 of it from the phase-out. The same $240,000 would also be above the $218,000 joint IRMAA threshold in the 2026 table, and a 2026 return sets premiums for 2028, for which no table exists yet. The details of that side are on our IRMAA brackets page.

What a reader can do with this

• Find your MAGI line. Take Form 1040 line 11b, add any section 911, 931 or 933 exclusions (most readers have none), and compare it with $75,000 or $150,000. Under the start, a conversion or sale costs the ordinary rates only; between the start and $175,000 or $250,000 it costs the bracket rate times 1.06 or 1.12; above, the senior deduction is already gone.
• Check who counts. Each spouse needs to be 65 by the end of the year and to have a Social Security number; a joint return is required. A spouse who turns 65 in 2027 adds their own $6,000 from that year.
• Remember the end date. The deduction exists for tax years 2025 to 2028. Planning that leans on it for 2029 and later is planning on a law that has not been written (our reading of the “before January 1, 2029” clause).
• Count Social Security before anything else. The inclusion zone can make the cost of extra income several times larger than the senior phase-out alone.
• Ask the timing question for each event. A K-1 estimate, a closing date or the last day for a Roth conversion (December 31, 2026 for the 2026 tax year) all decide which year's MAGI the income lands in.
• Run the numbers with your actual return. The tables here are for a standard-deduction filer with round figures; itemizing, state tax, the net investment income tax and credits change them.

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read and saved on October 20, 2026: Internal Revenue Code section 151 (Cornell LII, as amended by Pub. L. 119-21); Public Law 119-21 (July 4, 2025), section 70103, in the Government Publishing Office text; IRS Schedule 1-A (Form 1040) 2025; Instructions for Form 1040 (2025), including the instructions for Schedule 1-A and the Social Security Benefits Worksheet; IRS newsroom “Working Families Tax Cuts: Tax deductions for working Americans and seniors” and “Check your eligibility for the new enhanced deduction for seniors” (February 27, 2026); Rev. Proc. 2025-32 (2026 inflation adjustments); SSA POMS HI 01101.010 and HI 01101.020 (December 2, 2025). All dollar tax cases are our arithmetic.