An Act Exempting Pension Income From The Personal Income Tax.
Impact
If enacted, HB 05413 would significantly alter state implications for pension taxation, potentially alleviating financial pressures on retirees. This exemption could lead to increased disposable income for the elderly, enhancing their quality of life and enabling them to contribute more to local economies. The financial relief provided could also reduce the burden on state programs aimed at assisting low-income seniors, as more individuals may be able to sustain themselves without necessitating additional assistance.
Summary
House Bill 05413 aims to provide tax relief by exempting pension income from personal income tax for retirees. Specifically, the bill targets individuals over the age of sixty-five, allowing them to keep more of their pension benefits by reducing their taxable income. This measure is intended to support the financial situation of the elderly population, particularly those receiving limited income from pensions and social security benefits. The thresholds set in the bill allow single filers earning up to fifty thousand dollars and joint filers earning up to one hundred thousand dollars to benefit from this exemption.
Contention
While the bill seems to garner support due to its beneficial stance for retirees, there may be contention around its fiscal impact on state revenues. Critics may argue that the reduction in taxable income from pension benefits could lead to shortfalls in state funding, affecting essential services and programs. Proponents, on the other hand, might emphasize the social responsibility of providing support to the elderly and the overall benefits associated with reducing poverty rates among retirees, urging for prioritization of senior welfare over potential revenue losses.