Social Security is arguably one of the most important social programs in our society, and millions rely on its benefits to pay the bills and cover food, living or health care expenses.
Despite its necessity, in 1990, the New Mexico Legislature made the grave mistake of passing legislation imposing the state’s income tax on Social Security benefits. For decades, Americans work diligently in order to provide for themselves and their loved ones, paying taxes and contributing to the Social Security trust fund so that when the time comes for them to retire, they have some financial stability. Due to this tax, that is often not the case in New Mexico.
In fact, New Mexico is one of only 13 states that taxes Social Security benefits for mature adults, costing the average recipient nearly $700 a year. Social Security is often the only form of income for many recipients, with the average benefit being about $13,900 a year. So, for approximately 65,000 New Mexico residents whose Social Security benefits are taxed by the state, the essential money they need for medicine, housing, food and caregiving is being taken away.
This is not only unacceptable, it’s unjustifiable. New Mexico currently ranks second-highest in the nation for the percentage of seniors living in poverty. Not only do these struggling mature adults depend on Social Security for income, but so do the nearly 200,000 caregivers in New Mexico who support loved ones.
As president and CEO of RetireSafe – a non-profit with a mission to educate and advocate on behalf of mature Americans – I am inclined to question the reasoning behind taxing the Social Security checks of retirees, the disabled and their dependents because it completely undermines a system designed to lift this population out of poverty. Since the implementation of this tax, New Mexico has experienced significant socio-economic issues that have rippled through the state’s population.
For example, according to the U.S. Census Bureau, in 2019, 12.2% of residents in New Mexico age 65 and older lived in households at or below 100 percent of the poverty threshold – nearly 3% higher than the national average.