Tax exemption proposed for social security benefits

People receiving social security benefits could see a new tax exemption under a bill discussed in a Revenue Committee hearing Feb. 8.

Under LB976, introduced by Omaha Sen. Jeremy Nordquist, social security benefits would not be figured into a person’s federal adjusted gross income for tax purposes. Nordquist said the tax exemption would benefit seniors in every community.

“We need to continue to work across the board to relieve taxes for Nebraskans,” Nordquist said. “This would benefit all seniors who have worked hard their entire lives and paid into the system.”

James Cavanaugh of the National Organization of Social Security Claimants’ Representatives testified in support of the bill, saying most seniors depend on their social security benefits.

“Most people spend all of their benefits each month,” Cavanaugh said. “This is a real hardship on people with limited resources.”

Jane Kleeb, Bold Nebraska founder, said as the baby boomer generation reaches retirement age, it is especially important that they stay in the state.

“The senior citizens are really the backbone of our communities,” Kleeb said. “We want to make sure we keep them in Nebraska.”

David Drozd, a research coordinator at the University of Nebraska at Omaha’s Center for Public Affairs Research, testified in a neutral capacity. He said the data shows more people of retirement age are leaving the state due to high taxes.

“People are voting with their feet and moving out of the state,” Drozd said. “Lower population totals mean less political power.”

No one testified in opposition to the bill and the committee took no immediate action.