Senate Republicans Introduce “Retire in Minnesota Act”

Bill will phase out taxes on Social Security income, make Minnesota more welcoming for retirees

SRC_RIMA_logoIn an effort to help Minnesota seniors and retirees, Republican Senators today proposed the “Retire in Minnesota Act” (RIMA), which would eliminate the state income tax on Social Security income. Minnesota is one of only seven states that does not offer tax breaks on Social Security benefits when they are paid out to retirees. Senator Dave Senjem (Rochester), Senator Gary Dahms (Redwood Falls), Senator Carla Nelson (Rochester), Senator Mary Kiffmeyer (Big Lake) and Senator John Pederson (St. Cloud) announced the proposal at a press conference at the Capitol.
Will Phillips, State Director of the AARP in Minnesota, joined the Senators at the press conference to express AARP’s strong support for the “Retire in Minnesota Act.”
“It’s time for Minnesota to put out the welcome mat for retirees by lowering their taxes,” said Senator Senjem. “Our seniors have worked hard all their lives, already paid taxes on this income once and are such a valuable resource for Minnesota. Let’s make it easier for them to retire here.”
S.F. 123 will slowly phase out the Minnesota income tax on Social Security income by 10% per year for ten years until it is completely phased out.
“The state in which one lives should not reduce federal Social Security benefits through double taxation,” said Senator Nelson. “If we listened to our hearts, everyone would retire in Minnesota. But if we listen to our heads (and our accountants), almost every other state is a better state to maximize retirement income.”
Senator Dahms added, “Minnesota’s retirees are an asset to their communities. With increased taxes and utilities, it’s getting harder for them to stay in the same homes and communities where they grew up and raised their children. This bill will take some of that burden off their shoulders and help keep our seniors here in Minnesota.”
Facts about Social Security income in Minnesota:
  • 637,000 Minnesotans, including 70% of Minnesota seniors, will benefit from the “Retire in Minnesota Act,” saving over $600 per person every single year.
  • 70% of Minnesota seniors rely on additional sources of income to supplement their Social Security benefits, but they’re being punished with higher taxes for continuing to work or accept hard-earned pension payments.
  • Social Security is double taxed – once when it’s taken out of your paycheck, and then again when you receive it later in life.
  • Minnesota is one of only seven states that doesn’t give retirees a break on Social Security taxes. Thirty-eight states exempt Social Security from taxation altogether.
  • Minnesota ranked 4thon Kiplinger’s list of the “Least Tax-Friendly States for Retirees,” according to their September 2014 study.