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Bill would eliminate federal taxes on Social Security benefits: ‘You Earned It, You Keep It’

AL.com 9/2/2022 Leada Gore, al.com

A Minnesota Democrat is pushing Congress to eliminate federal taxes on Social Security.

U.S. Rep. Angie Craig, D-Minnesota, recently introduced the “You Earned It, You Keep It Act” to repeal federal taxes on Social Security benefits for retirees across the country.

“Social Security is a promise we have made to the American people – if you work hard and play by the rules, the dignity of a secure retirement will be within your reach,” Craig said. “But taxing the very benefits American workers have earned after decades on the job diminishes our promise and threatens to undermine the financial security of retirees already struggling with rising prices.

“Eliminating this tax will help Social Security benefits go further and ensure that American retirees have all the resources they need after a lifetime of hard work.”

READ MORE: Will Social Security recipients get an extra $200 a month next year?

The cut would be paid for by raising the payroll tax cap to $250,000 or more a year. Currently, wages over $147,000 are exempt from Social Security payroll tax. The bill has been introduced in Congress but hasn’t gained any traction – yet – and would face strong opposition from House Republicans.

READ MORE: Social Security increase 2023: How much will my check be?

Social Security recipients who earn more than $25,000 for an individual or $32,000 for a married couple filing jointly are taxed on up to 85% of their benefits. Below those thresholds, your benefits are not taxed.

According to AARP, about 56 percent of Social Security recipients owe income taxes on their benefits.

READ MORE: Social Security benefits in 2023: Will increase apply to disability benefits? How much is COLA?

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