No Tax on Social Security Act of 2021
Bill: H.R.4453 | Sponsor: Rep. Gosar, Paul A. (R-AZ)
Policy area: Taxation

Summary:
No Tax on Social Security Act of 2021
This bill excludes from gross income, for income tax purposes, social security benefits (i.e., title II retirement benefits and railroad retirement benefits).

To amend the Internal Revenue Code of 1986 to exclude social security 
          benefits from gross income, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Tax on Social Security Act of 
2021''.

SEC. 2. EXCLUSION OF SOCIAL SECURITY BENEFITS FROM GROSS INCOME.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139H the following new section:

``SEC. 139I. SOCIAL SECURITY AND TIER 1 RAILROAD RETIREMENT BENEFITS.

    ``(a) Exclusion.--Gross income shall not include social security 
benefits received by a taxpayer.
    ``(b) Social Security Benefit Defined.--
            ``(1) In general.--The term `social security benefit' means 
        any amount received by the taxpayer by reason of entitlement 
        to--
                    ``(A) a monthly benefit under title II of the 
                Social Security Act, or
                    ``(B) a tier 1 railroad retirement benefit.
            ``(2) Workmen's compensation benefits substituted for 
        social security benefits.--For purposes of this section, if, by 
        reason of section 224 of the Social Security Act (or by reason 
        of section 3(a)(1) of the Railroad Retirement Act of 1974), any 
        social security benefit is reduced by reason of the receipt of 
        a benefit under a workmen's compensation act, the term `social 
        security benefit' includes that portion of such benefit 
        received under the workmen's compensation act which equals such 
        reduction.
            ``(3) Tier 1 railroad benefit.--For purposes of paragraph 
        (1), the term `tier 1 railroad retirement benefit' means--
                    ``(A) the amount of the annuity under the Railroad 
                Retirement Act of 1974 equal to the amount of the 
                benefit to which the taxpayer would have been entitled 
                under the Social Security Act if all of the service 
                after December 31, 1936, of the employee (on whose 
                employment record the annuity is being paid) had been 
                included in the term `employment' as defined in the 
                Social Security Act, and
                    ``(B) a monthly annuity amount under section 
                3(f)(3) of the Railroad Retirement Act of 1974.''.
    (b) Social Security Trust Funds Held Harmless.--There are hereby 
appropriated (out of any money in the Treasury not otherwise 
appropriated) for each fiscal year to the Federal Old-Age and Survivors 
Insurance Trust Fund and the Federal Disability Insurance Trust Fund 
established under section 201 of the Social Security Act (42 U.S.C. 
401) and the Social Security Equivalent Benefit Account established 
under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 
231n-1(a)) an amount equal to the reduction in the transfers to such 
fund for such fiscal year by reason of this section. Amounts 
appropriated by the preceding sentence shall be transferred from the 
general fund at such times and in such manner as to replicate to the 
extent possible the transfers which would have occurred to such Trust 
Fund had such amendments not been enacted.
    (c) Repeal of Inclusion of Social Security and Tier 1 Railroad 
Retirement Benefits.--Section 86 of such Code is repealed.
    (d) References to Section 86.--Any reference in any provision of 
law which refers to an amount not includible in gross income by reason 
of section 86 shall be treated as reference to an amount not includible 
in gross income by reason of this section.
    (e) Conforming Amendments.--
            (1) The table of sections for part II of subchapter B of 
        chapter 1 is amended by striking the item relating to section 
        86.
            (2) The table of sections for part III of subchapter B of 
        chapter 1 is amended by inserting after the item relating to 
        section 139H the following new item:

``Sec. 139I. Social security and tier 1 railroad retirement 
                            benefits.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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