Nebraska lawmakers are debating a measure that would speed up the implimentation of a new tax exemption for Social Security income, letting recipients claim a full tax break a few years sooner.
The measure would phase out Nebraska’s tax on Social Security income by 2025. Lawmakers approved the exemption last year but adopted a slower phase-in that would eliminate the tax by 2030. The faster implementation was proposed after the state collected far more tax revenue than expected, leaving Nebraska with a general fund surplus of $412 million.
Some lawmakers question whether it’s prudent to rely on recent state tax revenues, which they argue were bolstered by federal pandemic stimulus payments into the economy.