AARP Nebraska today announced support for legislation that would exempt about 60,000 retirees from state taxes on Social Security benefits.
Under LB 17, single retirees with an annual income of $60,000 or less and couples with an annual income of $80,000 or less would pay no state tax on their Social Security benefits. The measure is sponsored by Sen. Jeremy Nordquist of Omaha and seven other senators.
Any tax relief that is provided this year should be crafted carefully and benefit those who are in greatest need, cautioned Mark Intermill, advocacy director for AARP Nebraska.
“We’re in a position where revenue has recovered from the recession that began in 2008. So there is an opportunity to provide some relief for people who pay taxes on their Social Security benefits,” Intermill told members of the Revenue Committee at today’s hearing. “However, LB 17 should be the starting point for discussing what else should be done. It’s the least we should do this year - a manageable proposal targeted to those who need relief the most.”
In 2012, Kiplinger Magazine rated Nebraska as the sixth worst state among 10 states that are “least friendly” to retirees. Nebraska likely landed on that list because it is one of only six states to tax Social Security benefits at the same rate as the federal government, and one of five states that fully tax pension income.
For a single Nebraska retiree with combined annual income of $25,000 or more, at least 50 percent of Social Security benefits are taxable under current law. Nationally, 36 states do not tax Social Security benefits at all.
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