A bill that could make Nebraska a more tax-friendly state for retirees is a major topic at the Statehouse today. The Revenue Committee hears testimony on Legislative Bill 738, a proposal to adjust the income levels for taxing Social Security benefits to keep pace with inflation.
Senator Brett Lindstrom of Omaha sponsored the bill, and says it would prevent now-exempt moderate- and middle-income Nebraskans from being bumped into a higher tax bracket and being taxed on their Social Security benefits. “Milk 50 years ago was a lot cheaper than it is today; and most people spend 25 to 30 years in retirement. And if you’re on a fixed income, you’re relying heavily on that Social Security. So what we’re trying to do is just make sure we’re keeping up with inflation and protecting folks against losing their purchasing power. “
Since 2015 in Nebraska, individual taxpayers with annual incomes of up to 43-thousand dollars, and 59-thousand for people filing jointly, are exempt from state taxes on their Social Security benefits.
Its estimated that for nearly half of Nebraskas 330-thousand Social Security beneficiaries, that monthly check is 50 percent or more of their income.
Lindstrom points out that every extra dollar older Nebraskans can keep in their pockets helps pay for basics like food, medicine and housing. And with so much uncertainty in the economy, he adds, the state needs to stay competitive.
“People want to live in the state, you know their families live here and they’ve lived here their whole lives. But we don’t make it easy, especially with interest rates and people on a fixed income where, if they do move to another state, they might be able to get a couple extra thousand dollars in their pocket every year.”
Colorado, Kansas and Missouri are among Nebraska’s neighbors and the dozen other states that tax some portion of Social Security benefits.
