O'Neill proposes bill to exempt senior benefits

O'Neill proposes bill to exempt senior benefits

STATE HOUSE - State Sen. Edward J. O'Neill, an independent from District 17 representing Lincoln, North Providence and North Smithfield, has filed a bill that would exempt Social Security benefits from the state income tax.

The proposal, he says, would provide a much-needed break for Rhode Island's elderly population, which already struggles under the burden of a slow economic recovery. Currently, 28 other states and Washington, D.C., exempt Social Security income - including monthly retirement, survivor or disability benefits - in whole or in part from state taxation.

"Older people don't just relocate to Florida for the sunshine," O'Neill said. "We are losing population each year to tax-friendly states. While we are doing everything we can to cultivate a better business environment and market our most precious assets to the world, we also need to ensure the protection of those who have lived their lives here and wish to retire comfortably in a place they've come to call 'home.' Exempting Social Security in this case would provide a small token of appreciation for our older Rhode Islanders, who still spend money and help fuel the economy in different ways. We want them to know without a doubt that we value them."

According to the U.S. Census Bureau's Population Estimates Program, 15.1 percent of Rhode Island's population is age 65 and older. Since Rhode Island income tax is based on the federal adjusted gross income from federal returns, Social Security benefits are allowed to be taxed through the state based on several different factors, including age, type of benefits, marital status and other variables. State Rep. Patricia L. Morgan has filed the House companion bill.