Utah Plans $200M in Tax Relief for 2025: Will Seniors Benefit Most?

Utah lawmakers are weighing a proposal to eliminate the state’s tax on Social Security income, a move that could provide significant relief for approximately 150,000 residents. While it’s uncertain if the 2025 Legislature will approve the measure, legislative leaders have set aside $231 million for tax reductions during the upcoming session, with a portion earmarked for addressing the potential cost of eliminating the tax on Social Security benefits.

Governor Spencer Cox has made ending the tax on Social Security a central priority in his $30.6 billion budget, calling it an “embarrassment” that Utah is one of only eight states still taxing these benefits. The cost to remove the tax is estimated at $143.8 million, which lawmakers are considering as part of a broader tax-cut strategy.

Support for the proposal has been strong, especially among Republicans. Senate Budget Chairman Jerry Stevenson expressed confidence that the proposal would pass, citing widespread backing from constituents and fellow legislators. However, the Republican supermajority has not yet made an official stance. Stevenson also indicated that while additional income tax cuts may be considered, lawmakers need to approach reductions carefully to avoid jeopardizing the state’s budget.

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Despite facing a budget shortfall, with a deficit of $2.3 million for fiscal year 2024 and a nearly $24.5 million shortfall in the general fund, the Legislature has reserved extra funds in the state’s “Rainy Day” fund to cover any unforeseen costs.

Governor Cox has emphasized that the proposal to eliminate the Social Security tax will have a more substantial impact on seniors than a modest reduction in the income tax rate. In contrast to a minor income tax cut, which would save taxpayers only a few dollars annually, the elimination of the Social Security tax could save seniors as much as $1,000 a year. Cox has argued that targeting this relief for seniors, especially those on fixed incomes, is the right choice for the state.

House Budget Chairman Val Peterson has noted that while the available funds for a tax cut this year are somewhat limited compared to last year, lawmakers are still working through the options. The $165 million in ongoing revenue could support a reduction in the tax rate, while the $66 million in one-time funds could be used for temporary tax breaks.

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As Utah faces these important fiscal decisions, the outcome of this tax debate will likely have significant implications for residents, particularly seniors, and for the state’s long-term financial health .

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Keelee McCain is a junior at Weber High School. This is her second year on staff, this year as Assistant to the Chief. She does have a life (probably) but she can't think of anything to write in here, so she's probably just going to ramble now. She has an orange cat who she likes better than any human. If you see her being quiet or not sitting on top of a desk, there is something very wrong. In her free time she enjoys harassing her favorite teachers and sleeping. Her life plans include making it through high school and leaving. Happy lifeing.

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