MIDVALE, Utah, February 5, 2021 (Newswire.com) - AARP Utah commends both chambers of the Utah State Legislature for unanimously passing legislation to remove the state tax on Social Security for low- and middle-income retirees (HB 86 - Social Security Tax Amendments in the House and SB 11 - Retirement Income Tax Amendments in the Senate). Fair taxation, including taxation of Social Security benefits, is an AARP priority and critical for Utahns to realize much-needed tax relief in retirement.
Utah has been one of only 13 states that taxes Social Security benefits. This bill removes the state tax for joint filers with incomes below $50,000 (or $30,000 for single filers) and the tax credit phases out by $1 for every $40 of income above those limits.
According to the Longevity Economy Report, a recent report prepared for AARP, the total economic contribution of Utah's 50 plus population accounted for 38% of Utah's GDP ($68 billion) despite only being 25% of Utah's population. This bill will help Utahns keep more to spend on goods and services throughout the state and continue to help the local economy grow.
"When workers are considering where to retire, it is worth considering the taxation of their Social Security benefits," said AARP Utah Advocacy Director Danny Harris. "Workers may consider why they should retire in St. George when a few miles away in Mesquite, NV, their benefits wouldn't be subject to state taxation. It's important to note that Nevada, Arizona, Idaho, Wyoming and California don't tax this income."
Retirees also have less ability to absorb changes in the cost of living, including increases in health care costs, utilities and groceries. Their income is typically fixed from year to year. They also have limited options for rejoining the workforce, and less time horizon for increased savings.
"Assuring that our members are financially secure and can age in their own homes are key components of AARP's advocacy agenda," said AARP Utah's State Director Alan Ormsby. "We strongly believe that all individuals have the right to be self-reliant and live with dignity in retirement. And over the last few weeks, AARP Utah has urged our state-wide members to write to their legislators about this important issue. I am pleased to see that the Legislature has listened to these constituents."
In a recent AARP Utah survey, state-wide members indicated that their top three legislative issues are ensuring the COVID vaccine is accessible, removing the state tax on Social Security, and lowering the cost of prescription drugs.
AARP is the nation's largest nonprofit, nonpartisan organization dedicated to empowering people 50 and older to choose how they live as they age. With a nationwide presence and nearly 38 million members, AARP strengthens communities and advocates for what matters most to families: health security, financial stability and personal fulfillment. AARP also produces the nation's largest circulation publications: AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org or follow @AARP and @AARPadvocates on social media.
Source: AARP Utah