Ackerman bill to give seniors a break on taxes heard in committee
STATE HOUSE – New legislation introduced by Deputy Majority Whip Mia A. Ackerman to help seniors struggling with rising costs by discontinuing the tax on Social Security benefits was heard in committee Thursday.
“With the price of everything going up, seniors need a break, so let’s give it to them by phasing out the tax on Social Security income like we did with the car tax,” said Representative Ackerman (D-Dist. 45, Cumberland, Lincoln). “One in four Rhode Islanders will be over 65 by 2030, so now is the time to improve their quality of life.”
More than three-quarters of Rhode Islanders are struggling with the cost of living, an issue that hits seniors who live on fixed incomes especially hard. In addition, high inflation over the past few years has forced seniors to pull more money from their retirement funds or take part-time jobs, raising their taxable income and causing them to pay more taxes on their Social Security benefits.
“Rhode Island’s income tax on Social Security benefits undermines the purpose of Social Security, which was designed to lift older adults out of poverty – not to fund state government,” said Catherine Taylor, AARP Rhode Island state director. “Rhode Island is one of only nine states that still taxes Social Security. AARP Rhode Island applauds Representative Ackerman’s bill to phase out this tax, to keep more hard-earned money in the pockets of older Rhode Islanders.”
The bill (2024-H 7588) would allow individuals to subtract a percentage of their Social Security income from their adjusted gross income, starting with 20% in 2025 and increasing to 80% after January 1, 2028. Representative Ackerman is introducing an amendment to the bill which will increase that percentage to 100%, completely eliminating the state income tax on Social Security benefits.
The bill was heard in the House Finance Committee Thursday, where it received supportive testimony from seniors in Rhode Island, who described how the tax on Social Security benefits makes it difficult to keep up with rising costs.
“It’s time for Rhode Island to stop being a national outlier,” said Representative Ackerman. “Our seniors worked hard for their Social Security benefits and should have full access to them in their retirement.”
