ST. GEORGE — A bill making its way through the Utah Legislature will give retirees earning up to $50,000 a year a tax break on Social Security.
Social Security Tax Amendments, designated as HB 86 in the 2021 Legislature, would raise the state tax credit for retired Utah couples from $32,000 to $50,000. The bill has already passed the Utah House and is moving to the Senate.
“It’s a big step forward,” bill sponsor Rep. Walt Brooks, R-St. George, told St. George News on Wednesday. “We’re one of 13 states that still charges taxes on Social Security. Technically, Social Security is something you’ve already paid over your lifetime.”
Some retirees living on Social Security may be bringing additional money from a pension or investments as a part of their retirement income yet still make under $50,000, Brooks said. While HB 86 would remove the tax on Social Security for the retirees, taxes in general will still apply to new income from other sources.
“It’s not removing all Social Security taxes, but its a big step forward,” Brooks said, adding his ultimate goal is to see Utah do away with the Social Security tax entirely.
The bill passed unanimously in both the House Revenue and Taxation Committee on Jan. 28 and the full Utah House on Feb 4. It has yet to be heard in a Senate committee.
Danny Harris, of AARP-Utah, voiced support for the bill during the House committee meeting, as did the Utah Taxpayers Association.
“This tax relief couldn’t come at a better time,” Harris said.
Matthew Weinstein, representing Voices for Utah Children, said the group supports the idea of HB 86. However, as presently written, he claimed the bill only benefits a small number of retirees who received earnings that place them on a higher side of the middle class rather than the lower end.
As to why a group focused on Utah’s children would speak on a bill focused on retirees, Weinstein said children deserve grandparents who aren’t struggling to get by.
The overall goal of ending Utah’s tax on Social Security has been a work in progress for many years, Brooks said. He has been working on it since he took office in late 2016. Before that, former Rep. John Westwood, R-Cedar City, had pushed for similar Social Security tax legislation.
“It’s really quite amazing that we’re able to get it though this year,” Brooks said, adding that he was confident HB 86 will ultimately pass the Legislature. “It’s been a long time coming.”
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