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New Mexico took another step toward becoming the next state to remove personal taxes on most Social benefits after lawmakers last week moved a bill on the proposal to the final committee.
The bill, called SB108, was one of several introduced during the current session seeking to exempt social security benefits from personal income tax, Las Cruces Sun-News reported. SB108 has bipartisan support as well as backing from Governor Michelle Lujan Grisham. From Friday, February 11, the bill was reviewed by the state Senate Tax, Business and Transportation Committee.
“It is high time we removed the tax on social security,” State Senator Michael Padilla, SB 108’s Democratic co-sponsor, told Las Cruces Sun-News. “We are one of only 12 remaining states still taxing social security. This is an issue that has faced many families in New Mexico retiring.”
If the bill becomes law, the tax exemption for social security income will take effect in the current tax year. However, it would not be available to everyone. The bill limits the exemption to $ 75,000 for married couples applying separately, $ 150,000 for married couples applying jointly, and $ 100,000 for individuals, meaning New Mexico will still tax social benefits for some residents.
According to Kiplinger, the other states besides New Mexico that tax social security services are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, Rhode Island, Utah, Vermont and West Virginia.
As GOBankingRates previously reported, personal income taxes in New Mexico currently apply to social security benefits on all but lower-income residents. Individuals earning up to $ 25,000 a year and community taxpayers earning up to $ 32,000 receive full exemption. State legislators have introduced competing bills to remove or scale down the tax.
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