The Social Security Fairness Act of 2025 eliminated the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO), restoring full benefits to 3.2 million public-sector retirees, and retroactively applied to January 2024, resulting in one-time retroactive payments.
Many beneficiaries received significant lump sums and higher monthly payments, but some experts warn these payments may trigger unexpected income taxes, prompting concerns about additional tax burdens for recipients with pensions and Social Security.
To address this, Rep. Lance Gooden, R-Texas, introduced the bipartisan No Tax on Restored Benefits Act, aiming to amend the tax code to exclude retroactive Social Security payments tied specifically to the repeal of WEP and GPO.
“For hundreds of thousands of Americans, the bipartisan Social Security Fairness Act was truly transformative, ensuring they received the benefits they deserved,” said Rep. Chellie Pingree, D-Maine.
4 steps to know who can receive Social Security survivor benefits
“But it was never intended to saddle widows, low-income seniors, and dedicated public servants with an unexpected tax bill.”
How much of a recipient’s Social Security is taxed depends on combined income, which includes tax-exempt interest plus half of Social Security benefits, with up to 85% taxable depending on total income relative to the base thresholds for filing status.
The base thresholds are $25,000 for single, head of household, or qualifying surviving spouse; $32,000 for married filing jointly; and $0 for married filing separately while living with a spouse, and spouses must include their income for joint returns.
The SSA provides a tool to calculate the taxable portion of benefits, which can be found on their official website.
Eligibility and what happens next?
The repeal restores full Tier I benefits retroactively after December 2023, and ongoing payments reflect the full amount. Typically affected individuals include teachers, police officers, local government employees, and some federal workers hired before December 31, 1983.
Military pensions, VA benefits, and certain foreign government payments covered by totalization agreements are unaffected. No action is required unless a beneficiary has changed addresses or banking information, which can be reported to the RRB at (877) 772-5772.
Most retroactive payments and new applications are nearly processed, with only four complex cases needing further review, often involving survivor beneficiaries or unusual situations requiring special handling to ensure accurate benefits restoration.
Once processed, beneficiaries may receive a one-time retroactive lump sum plus adjusted monthly payments, and the SSA often sends explanation letters detailing how payments were calculated and what changes recipients should expect under the Social Security Fairness Act.