Minnesota’s Social Security Tax Elimination Appears Unlikely This Session

(KNSI) — A complete elimination of Minnesota’s Social Security tax appears dead on arrival.

There have been growing calls from groups like A-A-R-P and both parties’ legislators to eliminate taxes on Social Security income. Top Democrats such as Governor Tim Walz and House Speaker Melisa Hortman are against it, saying it allows the wealthiest Minnesotans to avoid the tax.

AARP Minnesota’s Cathy McLeeer says the state has a projected $18 billion surplus, and the state should help retirees who are feeling the squeeze, “And with so many more middle-income Americans struggling to afford their health care and other basic needs, that promise of Social Security is just critically important.”

Bob Allender is a retiree who identifies as middle class and still has to cover major expenses like a mortgage and health insurance, “And it’s hard when you’re getting hit like that from a tax perspective – when you have no income coming in, other than your retirement savings and Social Security.” He says eliminating the tax would give him and others in his situation some breathing room.

Representative Matt Norris is among the Democrats who support fully eliminating the tax. He says he’s hearing from many Minnesotans nearing retirement age worried about under-the-radar expenses for this age group, such as student loan debt, “Either because they’ve cosigned or they’ve taken on debt when they went back to school, maybe mid-career.”

When Governor Walz rolled out his One Minnesota budget earlier this year, the AARP commended him for including measures to support older adults and their family caregivers, but McLeer said, “As only one of 12 states that tax these benefits, we are disappointed that the governor did not fully exempt social security taxes.”

Right now, about 50% of recipients are exempt from taxes, and previous bills from the House and the Senate would raise that to about 75% but not eliminate it altogether. AARP says taxing benefits undermines the purpose of Social Security, which was designed to lift seniors out of poverty – not to fund state government.

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MNC Reporter Mike Moen contributed to this story.

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