SENIOR ALERT: Bill Introduced to End State Taxation of Social Security
Senator Elaine Morgan introduces legislation to eliminate state tax on Social Security income
|Senator Elaine Morgan introduced legislation to completely eliminate the tax on Social Security income in Rhode Island. Bill S84 specifies for tax years beginning on or after January 1, 2024, an individual may subtract from federal adjusted gross income all Social Security income.
PROGRAMMING NOTE: Our Boomer-Zoomers from Charlestown discuss this issue with Sten on his In The Dugout podcast – click here.
More than 240,000 Rhode Island residents are age 60 or older — that’s 23% of the population. Social Security benefits are a substantial part of retirement income for many Rhode Islanders. Currently, Rhode Island is one of only twelve states that tax some or all of their residents’ Social Security benefits. Rhode Island also ranks among the least affordable states for retirement.
“Our seniors are living on fixed incomes that do not keep pace with the current rate of inflation,” stated Senator Morgan. “Eliminating state income tax on Social Security benefits will be akin to giving Rhode Island retirees a raise. We must make Rhode Island a better place for retirees and not taxing Social Security income is a large step in that direction. It will help stem the flow of retirees leaving Rhode Island and taking their spending power with them.”
Senator Morgan made the argument in support of the legislation at tonight’s Senate Committee on Finance where it was scheduled for consideration.
“Eliminating the tax on Social Security benefits at the state level for seniors who have worked for decades, paying taxes on their hard-earned income, and contributing to Social Security with post-tax dollars, would boost the retirement income for much of Rhode Island’s vulnerable elderly population,” reasoned Senator Morgan. “Social Security is part of the social safety net. It was never meant to fill state coffers, it was meant to carry people throughout their retirement years. It’s time to give our growing older population some tax relief by eliminating the income threshold, beginning with the 2024 tax year.”
The Senator further stated, “This legislation will help ensure that even more middle-class retirees and their families can keep more of their hard-earned benefits. In addition, exempting ALL social security income will serve as an incentive for some retirees to fill workplace openings during this time of labor shortages and help rather than penalize those retirees who are looking to supplement their incomes during this period of high inflation. Older Rhode Islanders on fixed incomes clearly feel the effects of inflation more than the rest of us. Social Security tax relief is one way the state can help retirees stretch their hard-earned dollars.”