Additional Standard Tax Deduction for the Elderly: A Description and Assessment Page: 1 of 6
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Order Code RS20342
Updated May 7, 2008
~. CRS Report for Congress
Additional Standard Tax Deduction for the
Elderly: A Description and Assessment
Pamela J. Jackson
Specialist in Public Finance
Government and Finance Division
Information Research Specialist
Knowledge Services Group
An additional personal exemption for elderly taxpayers was enacted by the
Revenue Act of 1948 (P.L. 80-471). The rationale for the provision was to accord the
elderly tax relief because the elderly had small incomes and are unable to adjust their
incomes in response to increases in the cost of living since they no longer work.
Congress attempted to target the tax benefit to low- and moderate-income elderly
individuals by substituting an additional standard deduction for the personal exemption
amount in the Tax Reform Act of 1986 (P.L. 99-514).
The additional standard deduction for both the elderly and the blind is projected to
cost $9 billion in lost tax revenue over the next five years and fails to meet the economic
tests of horizontal and vertical equity among taxpayers. The provision could be
corrected with alternative policies. If Congress wanted the provision more focused to
benefit lower-income elderly, then it could be converted to a tax credit with a phaseout
This report will be updated as warranted by future developments.
Brief Summary of Current Law
Tax laws provide certain allowances for the elderly. Among the most important is
the availability of an additional standard deduction amount allowed for those age 65 years
or older. Other special tax allowances are included in other provisions of the law,' such
'For more information on the provisions available to aged taxpayers, see the U.S. Department
of Treasury, Internal Revenue Service's annual publication entitled OlderAmericans' Tax Guide
Congressional Research Servife e The Library of Congress
Prepared for Members and Committees of Congress
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Additional Standard Tax Deduction for the Elderly: A Description and Assessment, report, May 7, 2008; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc808107/m1/1/: accessed December 15, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.