SALT LAKE CITY (AP) — Utah legislative leaders have announced a nearly $100 million package of tax relief bills involving families with children, veterans and older residents receiving Social Security.
“Today we want to try to put money … back into the hands of Utahns that need it the most,” Republican Utah Senate President Stuart Adams said during a news conference on Monday. “We know these groups are vital to our community, and we are dedicated to assist them.”
One of the three bills, sponsored by Republican state Sen. Lincoln Fillmore, would allocate about $55 million toward restoring residents’ income tax dependent exemption that was lost in federal tax cuts in 2017 under the Trump administration and caused a tax increase on many families. It could reduce taxes for about 390,000 taxpayers by an average of $140 a year, according to the bill.
Another bill, sponsored by Republican state Rep. Walt Brooks, would use about $18.3 million to eliminate income tax on some Social Security income. Utah is one of a handful of states that taxes Social Security income.
The final part of the tax relief plan would aid retired military residents. The bill sponsored by Republican state Sen. Wayne Harper would use $44 million for residents on retired military pay and a tax credit for Social Security recipients. The bill would reduce the tax burden for more than 18,000 people by an average of $1,315 a year.
However, retirees on Social Security could only claim one of the two tax credits under consideration.
Mario Reeve, who retired from the Utah Air National Guard after 29 years of service, said the cuts will help residents like himself.
“Until this year, Utah was one of only a few states to fully tax military retirement income,” Reeve said, applauding lawmakers “for recognizing the service of so many who have served and now call Utah home.”
Some have questioned why there are not further tax cuts since new revenue estimates show that lawmakers have an additional $1.5 billion to spend this year because the economy is improving faster than predications despite the pandemic.
Most of that money is one-time cash, which won’t be available for next year’s budget. State lawmakers also warn there is not enough money to fund all requests, which have totaled about $2 billion for one-time projects and $400 million for ongoing proposals.