Posted on 12/27/2025 2:48:29 AM PST by Libloather
WASHINGTON — Just eight states are on track to allow their residents to cash in fully on popular tax cuts from President Trump’s marquee legislation in 2026, experts told The Post, with several blue states unwilling to give workers an additional break.
The One Big Beautiful Bill Act exempted federal taxes on tipped wages and overtime pay, but hard-working residents will still have to pay state taxes on that income — unless local elected leaders step up.
Democratic strongholds like New York, Illinois and California have so far declined to extend state-level tax breaks, Reuters first reported, citing billions of dollars in potential budget shortfalls.
Other blue and red states alike have yet to signal whether they will take up legislation in the new year to conform to the federal tax code by changing the definition of what qualifies as taxable income. States like New Jersey are open to some of the provisions like not taxing tipped workers.
Treasury Secretary Scott Bessent earlier this month accused several blue states — including Illinois and New York — of playing Ebenezer Scrooge this holiday season by “deliberately blocking” the popular One Big Beautiful Bill Act provisions, which will begin taking effect on Jan. 1.
Those included “No Tax on Tips for dedicated service industry staff, No Tax on Overtime for linemen and factory workers, and a new tax deduction for seniors who depend on Social Security,” among others, Bessent charged.
(Excerpt) Read more at nypost.com ...
Iowa has already ended state income tax on Social Security and retirement benefits. However, I am certain in neighboring Minnesota seniors will continue to have the retirement benefits taxed to support the fraud and corruption and support Somali terrorism.
Not accurate. Pertaining to federal tax on SS income, if you don't make enough to pay federal taxes then nothing changes. If you make enough to owe federal taxes (SS income and other retirement income) then it applies IF you are middle income, NOT high income.
"The new deduction will reduce taxable income by up to $6,000 for eligible taxpayers. The provision applies to people who are at least 65 at the end of 2025. Individual filers with a modified adjusted gross income (MAGI) up to $75,000 or married couples filing jointly with a combined MAGI of up to $150,000 can claim the full $6,000. Individuals with incomes of up to $175,000 for single filers or $250,000 for married couples can claim a reduced deduction."
What effects every SS recipient is the COLA raise of 2.8% and the standard monthly premium for Medicare Part B, which covers doctor visits and other outpatient care, will climb in January from $185 to $202.90, a 9.7 percent increase.
Don’t get me wrong. I’m happy anyone is getting a benefit. I’m just angry they are IMPLYING that everyone on SS will get a benefit from this because it’s just not true.
Any cut in state taxes in a Democrat controlled state would be taking money right out of the Democrat politician’s pockets. They will never allow it!
I wholeheartedly agree with you.
BamaBelle wrote: “Doesn’t change the fact that they are being misleading when they imply ALL SS folks will benefit from the tax cut on SS. Many of us in all states make too little to be taxed, so no benefit. The SS tax relief only benefits the higher incomes.”
AI says:
AI Overview
Alabama does not tax Social Security benefits. This makes Alabama a tax-friendly state for retirees, as Social Security income is fully exempt from state income tax, regardless of your income level.
Alabama is one of 42 states that do not tax Social Security income. While your benefits may still be subject to federal income tax depending on your total income, the state provides a full exemption for this type of retirement income.
yeah I’m one who makes too little. But Trump said we might get 2000 dollars!...........i pray
Just as I said...
I just started collecting SS 3 mnths ago, not sure what Trump did but I hear SS income might be exempt from taxes now??
Only certain ones get a $6000 dollar tax credit. There is a post upthread that explains it.
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