Lots of Support in Place for Senior Citizen tax Relief in Minnesota

Published On: 5th November 2014

From the internet

There has been a lot of support in place for senior citizen tax relief, as Social Security is a policy that many Minnesotans rely on, yet Minnesota is one of only six states that taxes Social Security income at the federal level. In other words, that money does find its way into the state’s general fund, which is now currently experiencing a surplus.

One candidate for a spot in the Minnesota House is supporting tax relief for senior citizens by encouraging Minnesota to join the other 44 states that have stopped their Social Security tax.

In a study that was conducted by the Minnesota Women’s Consortium, a senior who rents their home and is in good health requires just over $19,000 per year for housing, transportation, health care, food, and their various expenses. Poor health, common expenses, and a mortgage can add thousands of more dollars to that figure. Eventually, a senior may have a need for home-based care and that can double their expenses. However, the average Social Security benefit is just over $13,000 for Minnesota seniors and that means many of them are struggling to make ends meet each month.

Social Security has announced a 1.7 percent increase in benefits for 2015. However, this translates into more taxes taken from a senior’s social security. Just like wages, the more money that is made, the more the money is taxed.

This 1.7 percent increase is a cost of living adjustment and will affect the benefits of over 58 million individuals starting in January 2015.

The increased payments will total more than $8 million. SSI beneficiaries will also receive an increase, which will begin on December 31. The Social Security Act allows for this annual increase in order to compensate for the rise in the cost of living.

There are other changes that take effect as well in January based on the increase in average wages. Based on that increase, the taxable maximum of Social Security earnings will increase to $118,500. That is up from $117,000. This affects the 168 million workers who will be paying into Social Security in 2015. Because of the increase in the taxable maximum, around 10 million of them will pay higher taxes.

There has been no chatter as to whether or not Minnesota has any plans in the near future to eliminate its Social Security tax or bring it below the federal level of taxation.