Facing budget pressures from the coronavirus pandemic, Minnesota Senate Republicans are holding off on plans to push for a full repeal of state taxes on Social Security income.
The proposal was initially a top priority for the GOP this legislative session. But Senate Majority Leader Paul Gazelka, R-East Gull Lake, said on Thursday that new issues and financial constraints prompted by the coronavirus crisis will take precedence in an upcoming tax bill.
“Social Security income is not going to be in there anymore even though I think that’s important,” he said. “Right now it’s focused on emergency help because of COVID-19.”
Minnesota is one of only 13 states that now tax at least some Social Security benefits paid to seniors. Proponents of fully exempting the income say the change will make the state more affordable for older residents. Critics argue it will mainly help the wealthy and put pressure on the state budget.
The Social Security proposal was part of a broader plan for spending a projected $1.3 billion surplus released by Senate Republicans in late February. That surplus has dissipated amid the current crisis, with some top officials warning the state may face a deficit.
Even without the Social Security changes, a tax bill remains a priority, Gazelka said. He expects that on Thursday the Senate will take up legislation that includes delaying some tax deadlines and other aid for businesses.