Nebraska lawmakers have given first-round approval to speeding up implementation of a new tax exemption for Social Security income, letting recipients claim a full tax break a few years sooner.
Floor debate began Monday afternoon and concluded with a 42-0 vote Tuesday morning advancing it to second-round consideration.
The state tax on Social Security applies to individuals with adjusted gross income of about $44,000 or married couples filing jointly making $59,000.
A bill passed last year exempts 5% of Social Security for those filers this year, ramping it up to 50% by 2025. This bill ups that to 100% in 2025.
The faster implementation was proposed after the state collected far more tax revenue than expected, leaving Nebraska with a general fund surplus of $412 million.
Some lawmakers question whether it’s prudent to rely on recent state tax revenues, which they argue were bolstered by federal pandemic stimulus payments into the economy.