In 2024, you may have received Social Security benefits that had been reduced as a result of the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO). For many Americans, these provisions had a significant financial impact on their retirement income.
The Social Security Fairness Act offers relief for millions of Americans by eliminating the reduction in benefits that they previously were subject to.
If you were a firefighter, police officer, teacher, or some other kind of public service provider, the Social Security Fairness Act might impact you. Here’s what you need to know about the Social Security Fairness Act update and how it could impact your 2025 Social Security benefits.
Table of Contents
What is the Social Security Fairness Act?Who is impacted by the Social Security Fairness Act?When will benefit increases start?How much will benefits increase?What do you need to do now that the Social Security Fairness Act passed?How Does the Social Security Fairness Act Impact My Taxes?How will the monthly increased Social Security payment impact my taxes?Related scams to be aware of:What is the Social Security Fairness Act?
Former President Biden signed the Social Security Fairness Act into law on January 5, 2025, ushering in a new era of equity within the Social Security system—a game-changer for over 2.5 million Americans who had spent their lives in service, and have dedicated their lives to our communities, including:
- Firefighters
- Police officers
- Teachers
The signing of this new law eliminates the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
These provisions didn’t allow for employees with public pensions to collect their full benefits under the federal retirement program and reduced Social Security benefits for those workers’ surviving spouses and family members—affecting a sizable number of government workers and their families.
Now, these retirees will receive increased monthly payments under the Social Security Fairness Act, as well as a lump sum payment retroactive to January 1, 2024, providing a much-needed financial boost to retired workers’ households.
The Social Security Fairness Act ensures that those public workers who have contributed to both their pension funds and Social Security receive the benefits they deserve.
Under the newly signed legislation, affected Social Security recipients may see an average monthly increase of $360, but the amount depends on the type of Social Security benefit they received and the amount of their pension.
The passage of the Social Security Fairness Act is undoubtedly a step toward economic security for these retirees after the decades-long battle began in 2003 with the first hearings by the Senate.
However, it also presents new challenges, particularly concerning the financial strain on Social Security trust funds and the implementation of these changes.
The Social Security Administration (SSA) is presently navigating the changes to Social Security under the Social Security Fairness Act and has advised beneficiaries to update their personal information through their “my Social Security account” and notes there is no need to call or visit the SSA offices directly.
Who is impacted by the Social Security Fairness Act?
The signing of the Social Security Fairness Act eliminated the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These programs prevented public servants from collecting their full benefits if they also contributed to a public pension.
According to the Social Security Administration (SSA), the Social Security Fairness Act will impact the Social Security benefits of more than 3.2 million Americans. Some of the people who will be impacted by the Social Security Fairness Act include:
- Teachers, firefighters, and police officers in numerous states
- Federal employees who are covered by the Civil Service Retirement System
- Individuals whose work was covered by a foreign Social Security system
If you’re a teacher, firefighter, or police officer, you might be wondering if this new law affects you. According to the SSA, just because you’re a public servant doesn’t mean the Social Security Fairness Act update will impact you personally.
You might have seen articles talking about teachers, firefighters, and police officers being eligible for increased benefits under this new act, but it only applies to public servants who were previously impacted by the WEP or GPO.
The removal of the WEP and GPO only affects about 28% of state and local public employees. The remaining 72% work in Social Security-covered employment, which means they pay Social Security taxes and receive full benefits.
Only people who receive a pension for work that’s not covered by Social Security and also worked in the private sector will potentially see their benefits increase.
When will benefit increases start?
While the Social Security Fairness Act has already been passed, it hasn’t been implemented yet.
Originally, it was announced that people may start seeing the increase in monthly payments by December 2025, however updated payments may be received as soon as April 2025. .
Check back with the TurboTax blog for the most up-to-date information.
Will it be applied retroactively?
WEP and GPO will only apply as far back as December 2023, which means that any benefits payable for January 2024 and earlier won’t be affected by those provisions. So, what does that mean for people who received reduced benefits in 2024?
Beneficiaries who were impacted by a reduction in benefits in 2024 will receive a lump-sum adjustment payment. Each beneficiary will receive a one-time payment to pay back the reduction in the benefits they received in 2024.
At the moment, you don’t have to take any action to make sure you receive your lump-sum payment. When the Social Security Fairness Act is implemented, affected beneficiaries should receive their money.
How much will benefits increase?
Planning ahead is a key aspect of retirement, so you’re probably wondering how much you can expect your benefits to increase under the Social Security Fairness Act. The Social Security Fairness Act is expected to result in an average $360 monthly increase in benefits by December 2025.
It’s important to note that everyone will see their benefits increase to varying degrees. Some people may receive less than the projected $360 monthly average, while others may receive $1,000 or even more in additional benefits each month.
The amount you receive will depend on the type of Social Security benefits you received and the amount of your pension. Unfortunately, we can’t provide an exact estimate for your benefits increase until the act is implemented.
What do you need to do now that the Social Security Fairness Act passed?
As you wait for the implementation of the Social Security Fairness Act, you might be wondering if you need to take action to ensure you receive your benefits.
Beneficiaries who are entitled to benefits that were eliminated or reduced by GPO or WEP don’t need to complete any applications, but you should log in to the SSA website with your account to verify your information.
In particular, it’s important to make sure your mailing address and direct deposit information are accurate. If your information is outdated, the SSA may not be able to adjust your benefits as quickly.
If you’re eligible to apply for the benefits of your spouse, you should apply online as soon as possible. Your application date may have an effect on when you start receiving your benefits, and filing right away could help you maximize your benefits.
The survivor benefit application isn’t available online. If you need to apply for the benefits of a surviving spouse, you should call 1-800-772-1213 between the hours of 8 am and 7 pm Monday through Friday.
If you’re not sure whether you’ve applied for your spouse or surviving spouse’s benefits, you might need to fill out an application. Again, it’s best to submit this application as soon as possible to maximize your benefits.
How Does the Social Security Fairness Act Impact My Taxes?
You might be wondering, “How does the Social Security Fairness Act impact my taxes?”,or “How does the retroactive lump sum payment impact my taxes?” and “How will the monthly increased Social Security payment impact my taxes?”
TurboTax has you covered and is here to break down what it means to you.
How does the retroactive lump sum payment impact my taxes?
The taxable part of a lump-sum payment of benefits received in the current year (reported to you on Form SSA-1099, Social Security Benefit Statement) needs to be included in your current year’s income, even though the benefit is for a retroactive payment for the previous year.
- You can use your current year’s income to figure the taxable part of the total benefits received in the current year; or
- You may make an election to figure the taxable part of a lump-sum payment made for an earlier year using your earlier year income for that payment amount.
Choosing the year you had a lower income might give you the best option so your Social Security would be taxed at a lower rate. Receiving the lump sum payment may cause more of your Social Security and income to be taxed since you’re required to pay taxes on up to 85% of your Social Security income when your combined income is over a certain threshold.
How will the monthly increased Social Security payment impact my taxes?
An increase in your monthly payment may make more of your Social Security taxable depending on your pension payments and other income streams because Social Security is taxed at your tax rate and determined by the total of your combined income.
Combined income is your Adjusted Gross Income plus nontaxable interest plus half of Social Security benefits.
If you’re filing single, and your combined income is between $25,000 up to $34,000, you may have to pay income tax on up to 50% of your benefits. If it’s more than $34,000, up to 85% of your benefits may be taxable.
If you’re filing jointly, and you and your spouse have a combined income between $32,000 up to $44,000, you may have to pay income tax on up to 50% of your benefits. If your combined income is more than $44,000, up to 85% of your benefits may be taxable.
Don’t worry about knowing updates and tax laws related to Social Security. TurboTax is here for you, providing done-for-you tax filing experiences whether you want to do your taxes yourself or have one of our TurboTax Live Full Service tax experts do them for you.
Related scams to be aware of:
With the passing of the Social Security Fairness Act and millions of beneficiaries eagerly awaiting increased benefits, a number of Social Security scams have cropped up. We’ll outline some of the common scams you should know about and offer tips to prevent scams below.
If you receive a call from someone claiming to be with the SSA asking for personal information, don’t share your information. If you didn’t call the SSA at the official phone number to speak to someone, they generally won’t call you out of the blue.
You may also receive a call or letter in the mail asking you to pay a sum of money to start receiving your increased benefits. The SSA has stated it “… will never ask or require a person to pay either for assistance or to have their benefits started, increased, or paid retroactively.”
Another common scam involves the caller threatening to suspend your benefits. The SSA won’t call you to threaten the suspension of your benefits, and they certainly won’t ask you to make a payment to prevent your benefits from being suspended.
If somebody calls you claiming to be from the SSA, you can report a Social Security scam by calling the Social Security Administration’s Office of the Inspector General (OIG) fraud number at 1-800-269-0271.
For now, the best thing you can do is sit tight and wait for an update on your Social Security benefits. If you’re already entitled to benefits and you’ve verified your information online, there’s nothing else you need to do at the moment.
Check back with the TurboTax blog for more information.