On the first day of the 2022 legislative session, Senate Tax Committee Chairwoman Carla Nelson (R-Rochester) introduced a bill to fully and immediately repeal the state’s outdated tax on Social Security income, allowing Minnesota’s retirees to deduct all Social Security income on their state income taxes beginning next year.

“We are one of the last states to still tax Social Security income,” Sen. Nelson said. “It is just so shortsighted – taxing Social Security benefits has severe long-term consequences because it drives people out of Minnesota – along with their economic activity, their contributions to our community, and their volunteerism. There is a good reason why most states don’t have this tax on the books anymore. It’s long past time for Minnesota to do the same.”

By taxing Social Security income, the state is taxing benefits that retirees already paid for during a lifetime of hard work. Eliminating this tax will deter the flight of retired Minnesotans to warmer climates and friendlier states who do not tax Social Security benefits. This is one of the most popular and frequent requests made by Sen. Nelson’s constituents at town halls, via social media, and through emails and phone calls. 

Facts about Social Security income taxes:

• Minnesota is one of only 12 states that still tax social security benefits.
• Kiplinger Magazine ranks Minnesota as “not tax-friendly” for retirees.
• Social Security is double taxed – once when it’s taken out of your paycheck, and then again when you receive your benefit later in life.
• 352,000 Minnesota seniors would benefit from the repeal of the Social Security income tax.