By GREG and KATHIE LENNES
Sorry – we disagree with former Senator Fred Harris on Social Security double taxation (link).
We are not rich at all and live on a very limited income with medical bills galore. Yet we are unnecessarily taxed hundreds of dollars more by the state. We set our own taxes.
We say get rid of this silly tax.
We have a limited income and we are not rich. We have been furious at the double taxation of our social security benefits for years. This grave betrayal of New Mexicans happened in 1990 when the New Mexico State Legislature passed and then-Governor Garrey Carruthers signed into law an odious law that essentially imposed double taxation on all New Mexico residents age 65 or older who receive Social Security.
This tax is a form of double taxation, since New Mexicans pay income tax on money deducted from their paychecks for Social Security, and then they are taxed again on the benefits they receive. .
Social Security is arguably one of the most important federal social programs in this state. More than 225,000 residents receive a social security check each month. Yet in 1990, the New Mexico state legislature and governor imposed double taxation on retirees to fund state coffers. Many live in nursing homes.
Only 11 states allow this hideous double taxation of Social Security.
New Mexico has the worst tax costing average Social Security recipients hundreds of dollars a year. The State Legislature and Governor Michelle Lujan Grisham must work together during this legislative session to REPEAL this grossly unfair tax NOW. It is the least our leaders can do for our seniors who are bearing the full brunt of the COVID-19 pandemic and its economic devastation.
OK – Here we go over the tax calculation that most state legislators don’t understand. The IRS taxes about 50% of our Social Security benefits. This 50% is added to the total adjusted gross income (6b) on the federal income form. There is a separate federal worksheet to determine the actual amount.
This adjusted gross income is listed on the New Mexico tax form and is taxed. There is no adjustment for SS income – none. This includes line 15! For us, with limited income and many medical bills, we lose hundreds of dollars every year due to unfair DOUBLE TAXATION.
New Mexico Voices for Children didn’t know and said, “If there isn’t an additional exemption at the state level, then we need to change our fact sheet!” I’ll find out, so thanks for the info!