Americans Set to Receive Higher Payments through Social Security Changes

Social Security benefits will soon be tax-exempt in two more states in 2024. 

The legislation in Nebraska and Missouri are set to take effect on January 1, 2024, bringing the total number of states that don’t tax Social Security to 41.

The move signifies a win for the AARP, which has been actively campaigning for Social Security exemptions across the United States. 

Bill Sweeney, the AARP’s vice president of government affairs, expressed optimism about the progress made, stating, “Missouri and Nebraska are our latest wins, but there are still nine states left who tax Social Security. We’re going to keep fighting to ensure seniors can keep more of their hard-earned money. And make no mistake, Social Security is your money, which you earned.”

In Missouri, the new provision, outlined in Senate Bill 190, eliminates income limits used to calculate the tax on Social Security or public pension benefits. 

While Social Security will be entirely exempt, public pensions may still be subject to other taxes, as specified in the bill proposed by Missouri Senator Tony Luetkemeyer and Representative Ben Baker.

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Trailblazing Social Security Tax Exemptions

americans-set-receive-higher-payments-through-social-security-changes
Social Security benefits will soon be tax-exempt in two more states in 2024.

Senator Luetkemeyer emphasized the financial challenges faced by seniors, especially during times of rampant inflation. 

He stated, “This bill is a way to put more money back in the pockets of Missouri’s seniors—many of whom are on fixed incomes—to help them make ends meet.”

Previously, Missouri’s tax rate ranged from zero to 4.95 percent, with exemptions for single filers below $85,000 and joint filers below $100,000 in federally adjusted gross income.

Meanwhile, Nebraska’s unicameral legislature accelerated its efforts to make Social Security benefits tax-exempt. 

Legislative Bill 754, signed into law by Governor Jim Pillen in May, moved the effective date from 2025 to January 1, 2024. 

Before this change, Social Security in Nebraska was taxed at rates ranging from 2.46 percent to 6.64 percent, with exemptions for single filers up to $45,790 and joint filers up to $61,760 in federally adjusted gross income.

The AARP’s successful advocacy in Nebraska and Missouri sets the stage for continued efforts to secure tax exemptions for Social Security in the remaining nine states: Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. 

The organization remains committed to ensuring that seniors nationwide can retain more of their earned income in retirement.

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