Guest column from the AARP Montana Executive Council
Did you know that Montana is one of only twelve states that still taxes Social Security income?
Social Security provides a foundation of income security for over 172,000 Montana retirees. Yet, Montana continues to burden our middle-class retirees with taxation of their hard-earned Social Security benefits. If an individual Montana senior makes between $25,000 and $34,000 in Social Security income, half of that income may be taxable under Montana law. If a senior makes over $34,000, 85% of that Social Security income may be taxable.
With inflation at a 40-year high and prescription drug prices increasing at an unprecedented rate with no end in sight, older Montanans who live on fixed incomes are feeling the financial pinch like never before.
Retired Montanans pay their fair share of taxes, including property taxes and taxes on other forms of retirement income like pensions and 401ks. They have long contributed to making Montana’s economy strong and continue to do so.
For every $1 of Social Security benefits received in Montana, it generates $1.83 of economic output. Spending related to Social Security by beneficiaries, businesses, and workers on goods and services generates $4.5 billion in economic output for Montana.
Within the last two years, Nebraska, North Dakota, Utah, and New Mexico have either eliminated or reduced the amount of Social Security benefits that can be taxed. It’s time for Montana to step up as well by eliminating or reducing the taxation of these hard-earned benefits.
As work begins to ramp up to the 2023 legislative session, AARP encourages Montana lawmakers to thoughtfully develop reform proposals that best help Montana’s middle-income retirees keep more of their hard-earned Social Security income while ensuring that our state has the revenue needed to preserve essential services for older Montanans and their families.
Social Security tax relief is a matter of fairness for middle-income retirees, and it is an investment in the financial security of Montanans for years to come. We believe that Montana’s elected officials should not delay any longer. It’s time to help our seniors and their families by eliminating or reducing the Social Security state income tax.
Submitted by The AARP Montana Executive Council
Alex Ward, AARP Montana State President – Billings
Sandy Bailey – Pony
Marilyn Hamer – Black Eagle
Bea Ann Melichar - Billings
Rich Nason – Helena
Loraine Wodnik – Helena
This story is provided by AARP Montana. Visit the AARP Montana page for more news, events, and programs affecting retirement, health care, and more.
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