Legislature Gives 42-0 First-Round Approval To 100% State Tax Exemption Of Social Security Income In 2025

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     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.

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