House Happenings: How to exempt social security from income tax

Weather seemed to be on everyone’s mind again this week in Jefferson City. By now, all members have experienced something to talk about how Mother Nature has picked on them – of course, worse than anyone else has experienced. But all of you remember the good ole days when we went through 40 days that the daily high never reached zero. We had a blizzard at least once a week and we had to walk three miles to school, uphill both ways, carry 12 pounds of books, eight pounds of lunch and thermos bottle, help the teacher start a fire, etc. Also, that was after helping the folks with two hours of chores. It’s a good thing we were really tough then!

Speaking of those of us old enough to have enjoyed those times, we should be interested in HB 444 et al. The intent of HB 444 is to exempt Social Security income from Missouri income tax liability. We have had extensive debate on the issue during the perfection process, which lasted over three days this week. There have been several amendments offered and discussed; so far only two of them have been accepted. One of those accepted by the body was my proposal to include a limited exemption for those who depend on earnings from other sources to supplement a very modest Social Security allowance. Many of you who are retirees (and/or approaching that status) have been self-employed and have not qualified for large Social Security deposits. Consequently, you do not qualify for large Social Security retirement income payments. Sometimes there is a significant "But." The "But" is that, during the years of operating the business, you have acquired "capital assets." Commonly, that is a farm or a Mom and Pop business in or near our small towns. If you sell that asset, pay all applicable taxes, and invest the proceeds in a mutual fund or interest bearing account, the resulting income is taxed again. My amendment would allow an annual exclusion of up to $6000 per taxpayer for that income to supplement what may be a fairly low Social Security payment for those individuals.

Some House members are strongly supportive of exempting Social Security for all. Others are in strong opposition in lieu of using the revenue (which might be lost due to the tax exclusion) for other needy programs. I’m most interested in what you folks think.

Capitol visitors from our area this week included members of the Missouri Nursing Association, workers with partial disabilities, Freedom of Road Riders (FORR), the Missouri Small Business Development Centers and Procurement Technical Assistance Centers, constituents who live in assisted living facilities, Missouri Corn Growers Association, opponents of the National Animal Identification System program and student officers from the Missouri Association for Career and Technical Education.

If we can assist you in any way, please feel free to contact Pam at the Jefferson City office. Our number there is 573-751-1649 and the email address is [email protected]. You can also contact me at the district office at 660-359-3988.