Committee says no to retirement income exemption bill

2013-03-20T04:08:00Z 2013-03-20T08:21:12Z Committee says no to retirement income exemption billBy JoAnne Young/Lincoln Journal Star Fremont Tribune
March 20, 2013 4:08 am  • 

The Nebraska Legislature's Revenue Committee on Tuesday said no to advancing a bill (LB75) that would have phased in income tax exemptions for those earning Social Security and military retirement benefits.

Sens. Beau McCoy, Jeremy Nordquist and Charlie Janssen had worked out an amendment to the bill that would have phased in the exemptions beginning in 2014. By 2018, the exempted amount would have been 100 percent.

The military retirement benefit would have been extended to people who were at least 48 years old. Excluded income could not exceed $48,000 annually in federal adjusted gross income for those married, filing jointly, if both were receiving military retirement benefits, and $24,000 annually for others.

For people receiving Social Security benefits, those married, filing jointly, could not make more than $60,000 in federal adjusted gross income, and others could not make more than $40,000.

"This will allow us in the short run, essentially the first part of this, to do something for these retirees ... it gives them something, and then gives us time to set policy going down the road if we're going to change it," McCoy said.

"Clearly, we're one of very, very, very few states that are not doing something for Social Security retirees and military retirees."

The committee accepted the amendment but then turned down the amended bill on a 3-5 vote.

Voting yes were McCoy, Janssen and Sen. Pete Pirsch. Voting no were Sens. Galen Hadley, Tom Hansen, Burke Harr, Paul Schumacher and Kate Sullivan.

Hadley said senators introduced multiple retirement bills this session. The topic is an integral part of the tax study proposed for the committee under a bill (LB613) being debated in the Legislature.

"The message to us is that a modern tax system somehow looks at retirement income differently than we have in the past," he said.

The committee doesn't want to pass something out now that might have to change after the study, he said.

"Once you give something to taxpayers, it's very difficult to get it back," he said.

Copyright 2016 Fremont Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.