Community, Diversity, Sustainability and other Overused Words

Social Security Benefits Should Not be Taxed, Says Senior Rights Group Association of Mature American Citizens

The 1983 and 1993 amendments to the Social Security Act were expected to affect less than 10% of the senior population, but now snare half of all senior taxpayers.

"We're not giving up on our efforts to eliminate the unfair income tax on Social Security benefits. The Senior Citizens Tax Elimination Act is being reintroduced and the Association of Mature American Citizens [AMAC] will be doing what it takes to encourage lawmakers to support the measure," says Bob Carlstrom, president of AMAC Action, the association's senior advocacy affiliate.

The original Social Security and tier 1 railroad retirement benefits were specifically exempted from income taxes when they were created in the mid 1930s. "After all, workers pay for them with taxes that are taken out of their paychecks to begin with. To tax retired seniors a second time is plain and simple a money grab."

Carlstrom notes that AMAC's founder, the late Dan Weber, was especially keen on seeing this particular piece of legislation become the law. As he put it, "Every year, millions of seniors become eligible for either Social Security or tier I railroad retirement benefits. After working for decades, being involuntarily taxed on their hard-earned income to fund these federal programs, some seniors are forced to pay income tax on the benefits they withdraw from the Social Security System. Taxing the very benefits created from taxed earnings is completely nonsensical and diminishes the retirement benefits seniors have been promised. Seniors deserve to reap the full benefits of their career-long contributions to Social Security and the Railroad Retirement Plan."

It's important to note that if your benefits are your only source of income, they likely will not be subject to income taxes. But, if you are working at a full time or part time job, if you have self-employment income, if you are receiving distributions from an IRA or 401k plan, or if you are collecting dividends from investments, you are required to file a tax return. And, Carlstrom explains, it's not just income from those sources that are taxed; a hefty portion of your retirement benefits get taxed as well.

To be more specific, he says, the tax is levied on a combination of your outside income and half of your retirement benefits.

AMAC Foundation Executive Director Gerald Hafer notes in this regard, "The 1983 and 1993 amendments to the Social Security Act were expected to affect less than 10% of the senior population, but now snare half of all senior taxpayers. It's only going to increase without inflation adjustments. Moreover, beneficiaries are being taxed at significant levels which they can ill afford because the thresholds (base amounts) for taxing benefits have not been changed in decades. Not indexing or adjusting the threshold ignores the constant dollar cumulative rate of inflation increase on what the threshold should now be -- almost a 160% increase. The result-up to 85% of one's Social Security benefits being taxed based on decades old thresholds--is financially painful to many seniors surviving on limited incomes.

"The point is, not many individuals and married couples are able to survive on Social Security and Railroad Retirement benefits alone in this day and age; most of them need to supplement their benefit income in order to get by. And they need to keep their Social Security and railroad benefits intact."


The 2.3 million member Association of Mature American Citizens [AMAC] is a vibrant, vital senior advocacy organization that takes its marching orders from its members. AMAC Action is a non-profit, non-partisan organization representing the membership in our nation's capital and in local Congressional Districts throughout the country.


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