ST. PAUL – A bill Rep. Dale Lueck, R-Aitkin, authored to phase out Minnesota's practice of taxing Social Security benefits passed the House Wednesday as a provision in the House omnibus tax bill.
Estimates indicate Lueck's provision would provide tax relief in the range of $280 to $600 per person to more than 366,500 Minnesotans. Many of the citizens who stand to benefit live in District 10B, where Lueck said about 43 percent of the residents receive Social Security retirement benefits.
"For many of our retired, Social Security benefits are a major portion of what is essentially a fixed retirement income," Lueck said. "Minnesota currently is one of only six states to fully tax Social Security retirement benefits and it's time we join the vast majority of other states as to how we treat our elderly. Their budgets are often very tight. Not taxing their Social Security retirement benefits would be a huge help."
The phase-out Lueck proposes would take place over a five-year period. Other provisions in the House's omnibus tax bill include a new Minnesota personal or dependent tax exemption that could save a middle-class family of four more than $500 over the next two years. The House proposal also provides families with pre-kindergarteners to high school seniors with expanded education deductions, and allows families saving for higher education costs to deduct their contributions.
The tax package now goes to a joint House-Senate conference committee which will reconcile the differences between the respective bodies' omnibus tax bills in preparation for final passage.
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