Armstrong files bill to exempt Social Security from income tax

SANTA FE — A Valencia County state representative is co-sponsoring legislation to repeal the tax the state puts on Social Security income.

Rep. Gail Armstrong (R-Magdalena) and Rep. Cathrynn Brown (R-Carlsbad) filed House Bill 48, which would exempt Social Security income from income tax.

The proposed legislation was sent to the House Labor, Veterans’ and Military Affairs Committee on Wednesday, Jan. 19, the second day of this year’s 30-day session.

According to Brown and Armstrong, the state’s taxation of Social Security income is a known disincentive for people to retire in New Mexico. Currently, Social Security benefits subject to federal taxation are also subject to New Mexico income tax.

New Mexico is one of only 12 states that taxes social security benefits. Nebraska recently joined the ranks of states removing the tax.

H.B. 48 states, “an individual may claim an exemption in an amount equal to the amount included in adjusted gross income pursuant to Section 86 of the Internal Revenue Code, as that section may be amended or renumbered, of income includable except for this exemption in net income.”

In a recent press release about the bill, Armstrong and Brown said they are “guardedly optimistic” the bill will get approval from the legislature and the governor this session.

“We have had some bipartisan support for the repeal in years past,” said Armstrong, “but not nearly enough. Democratic legislators, by and large, were dead set on keeping the tax in place.”

Brown said it sometimes takes years of hard work to achieve passage of legislation.

“Representative Armstrong and I have been working tirelessly for six years to repeal this tax. It’s unfair that our senior citizens are subjected to two points of taxation — at the front end, when they make contributions into the Social Security system, and then later, when they draw their benefits,” Brown said. “What’s different this year is that the governor has come on board.”

In her State of the State Address on Jan. 18, Gov. Michelle Lujan Grisham endorsed the idea of repealing the tax, according to the press release.

“We are delighted to have her support, and perhaps her endorsement will translate into the votes needed to finally provide tax relief for seniors,” Brown said.

Representatives Randall T. Pettigrew (R-Lovington), Candie G. Sweester (D-Deming) and Rebecca Dow (R-Truth or Consequences) are also co-sponsors of H.B. 48.

Sen. Michael Padilla (D-Bernalillo) has introduced Senate Bill 108, which would also exempt Social Security benefits from state personal income tax.

“New Mexico is one of only a few states that taxes Social Security,” said Gov. Michelle Lujan Grisham in a press release about Padilla’s bill. “Ending this tax lifts one more burden from the shoulders of New Mexico seniors living on fixed incomes.”

“We have never had a better opportunity to eliminate income taxes on social security than we do right now,” said Padilla in the same release. “Record revenues make it possible to help hundreds of thousands of retired New Mexicans enjoy greater financial peace of mind.”

Padilla’s bill is scheduled to be heard by the Senate Tax, Business and Transportation Committee on Thursday, Feb. 3.