A lawmaker from northeast Nebraska believes the state is losing some of its senior citizens to other states, because Nebraska has a state income tax on retirement income. Senator Robert Giese has proposed a bill to exempt retirement and social security benefits from state income tax. Giese says Nebraska is in the overwhelming minority of states when it comes to tax treatment of retirement benefits.
“We are one of just five states which taxes social security benefits to the same extent as the federal government and one of just four states that does not offer some type of tax credit or exemption for pension income.”
Giese says each of the surrounding states has no state income tax or offers exemptions or credits on retirement income. His bill would gradually phase-in an income tax exemption on retirement income.