SOCIAL SECURITY TAX CHANGES FOR ONE STATE
Kansas has joined several other states in no longer taxing Social Security benefits for seniors.
Governor Laura Kelly on Friday signed the new tax rules into effect, three days after state lawmakers approved the Social Security update.
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"We are pleased that legislative leadership and Gov. Kelly worked together to develop and pass a tax plan that prioritizes the elimination of the Social Security income tax," AARP Kansas State Director Glenda DuBoise said in a statement. "Our members played a vital role in this process. Their advocacy, leading up to the special legislative session, helped carry the bill over the finish line."
The end to Social Security state taxes was one part of a larger tax relief bill that Kelly approved.
"I appreciate the Legislature's quick work today to pass this tax relief package," Kelly previously said in a statement. "Although this package is not perfect and emphasizes income tax reductions instead of property tax relief, it does provide significant relief while preserving our ability to continue fully funding our public schools, roads and bridges, and State Water Plan."
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Previously this year, West Virginia also made the move to eliminate state taxes on Social Security income.
There are now only nine states that tax Social Security, but the federal government can levy taxes on the benefits regardless of the state in which you reside.
The states that still tax the benefits are Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia (until it ends the tax in 2026).
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"For the vast majority of those collecting Social Security, their income has gone down substantially due to retirement and/or a reduction of hours towards the end of one's working lifespan, so the likelihood of them getting taxed is lessened," Alex Beene, financial literacy instructor at the University of Tennessee at Martin, told Newsweek. "Still, with rising prices, every dollar counts, and additional taxes need to be considered in your plans."
Missouri and Nebraska are also ending their taxes on the monthly income for seniors and Americans with disabilities this year after passing legislation in 2023.
For residents in some states, taxes on Social Security have been gone for several years based on income requirements. Still, in West Virginia, those with an adjusted gross income above $50,000 previously still saw taxes come out of their monthly benefits.
"For far too long, West Virginia has been an outlier in its tax treatment of Social Security income," AARP West Virginia State Director Gaylene Miller said in a statement after the new law took effect. "Thousands of older West Virginians engaged with lawmakers through our grassroots advocacy efforts, and it made all the difference in achieving meaningful tax relief for West Virginia retirees."
Kansas had a similar rule to the past West Virginia guideline, which saw beneficiaries with an adjusted gross income of $75,000 or more get taxed.
Federally, there's no way to avoid the Social Security income tax, as the government stipulates single filers with a combined income of more than $25,000 must pay taxes. Couples with a combined income of $32,000 are required to as well.
Beene said not taxing Social Security benefits may become more significant in the years ahead as more Americans reach retirement and need to max out their savings to afford basic expenses.
"Inflation has obviously played an extensive role in making the cost of retirement more difficult, there's also the reality that most seniors don't have enough saved in other retirement accounts like 401Ks and IRAs to cover their monthly expenses," Beene said.
"My expectation is if it gains popularity in Kansas, other states will start to feel pressure to follow suit."
2024-06-21T21:25:13Z dg43tfdfdgfd
