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Legislature Votes To Gradually Abolish Social Security Tax

May 21, 2021

Nebraskans receiving Social Security income will pay less in taxes on that income each year until it’s fully exempt in 2030, under a bill that won final approval from lawmakers. Lawmakers passed the gradual tax phase-out on a 41-0 vote. It now heads to Gov. Pete Ricketts, who’s expected to sign it. The bill by Sen. Brett Lindstrom, of Omaha, would reduce the taxes paid on Social Security income by 5% this year, 20% next year and 30% in 2023. The exemption would continue to grow until it hits 100% in 2030. Supporters say the bill would help ease the tax burden on seniors and make Nebraska attractive compared to neighboring states that don’t tax Social Security, including Iowa.